Economist Predicts Sustained Growth for At Least 18 MonthsPosted by Monte Davis on Friday, March 23rd, 2012 at 3:45pm.
At his annual economic forecast event held on Thursday February 23 at the Austin Convention Center, Angelos Angelou pointed to a number of really positive indicators for Austin in the coming months. In fact, he used the phrase "fantastic news," which is just exactly what real estate investors want to hear. For instance:● Job growth at the rate of 19,000 new positions this year and at least 20,000 in 2013. Why does that look so good? We only picked up 13,000 last year. In fact, we've gained back all the jobs that were lost during the recession and Angelou thinks the local unemployment rate, which is roughly 6 percent right now is headed below 5 percent. Granted, these are not likely to be high-paying jobs, but employment puts purchasing power in the local populace that bleeds through all levels of the economy.
And what's driving the local economy? Real estate. The occupancy rates are just fantastic:
● 88% for office space with as much as 350,000 sq ft of planned construction this year
● 94% for retail with 400,000 sq ft planned
The single-family housing market isn't normal yet, but Angelou does predict more housing starts through 2013. Last year there were only 6,100 homes built, which is thin compared to a normal 13,000 a year, but the trend is upward, which is what we want to see.
Now, the multi-family market? We're among the best in the nation, and that's just music to our investing ears.
Pretty much all of this positive news is linked to population growth. We're the 14th largest city in the country and continuing to grow, with 39,000 new residents last year and an expected 42,000 for 2012.
The F1 track may fuel some really interesting future development, with even the potential for a major auto manufacturer to move to Texas. Other sectors where Angelou predicts strong future growth include: entrepreneurship, creative media, clean energy, data centers, manufacturing, and health care.
Speaking directly to the civic and business leaders in his audience, Angelou did stress the need to get our transportation system on a faster track toward growth and development, and he touched on the need for projects that will bleed our growth out into the surrounding areas of Central Texas. Both points speak to the need to keep our city from getting choked with traffic, which would make it less attractive to new residents.
Overall, Angelou's discussion wasn't just positive, it was insightful. We don't just need growth, we need growth with vision and direction. You all know how excited I get about these future predictions, especially when they're this positive, and this one is no exception. The time couldn't be better to get into real estate investing locally because we're entering an extended period of growth and expansion for at least 18 months and likely more. Good stuff!
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