Real Estate Blog

Okay. Let's play show and tell. Have a look at this graph.

What are we seeing? Proof that housing, as an investment, is less volatile than the stock market and highly competitive in terms of performance. Yeah. It jumped out at me, too when I received it this week in an email newsletter.

Here's the scenario. You buy into the SP500 or the Dow Jones Industrial Average OR you pick up a median-priced piece of residential real estate in January 2002.

The SP500 index is 106.4 while housing is 110 and the DIJA is 115.4. Even though housing is currently down 25 percent, it hasn't taken as rough a ride in terms of peaks and valleys as either of the other indices.

And in comparison to the current 25.3 percent drop in housing? From January to September 2009, the DIJA dipped 35.2 percent. From December 2008 to September 2009) the DIJA declined a sickening 38.9 percent.

Now. And this is very important. There is no such thing as a national housing market. Not all housing markets in the U.S. perform at the same level. For instance, in Florida, Arizona, and Nevada, housing is down 50 percent.

We could play with these numbers endlessly -- and trust me, the experts are given to obsessive mathematical tinkering -- but one thing is very clear. As an investment, housing is more than holding its own.

As investors, we're always asking ourselves -- or we should be asking ourselves -- is this the game for me? Is this the table where I should play my cards? In Austin, my answer would be, "Yes, deal me in."

- June 2011 average rents peaked at $772 a month for a single bedroom and $1,043 for a two bedroom.

- In June 2011 rents were averaging $1.04 a square foot.

- From June 2010 to June 2011 the area gained 9,200 new jobs.

- Austin is the number one retirement destination for Baby Boomers nationally.

- Our cost of living is 15 percent under the national average.

- All forecasts suggest a building surge in late 2012 with resales of existing homes picking up over the next 10 months.

- We have tremendous new lease opportunities in and around the F1 track.

- The city is moving forward with targeted improvements in the hot and in demand downtown sector.

- Austin is particularly strong in wireless technologies, with 100 existing firms employing 4,000 people and expanding.

- We have one of the most vibrant live music scenes in the nation.

Seriously, I could sit here and list positives all day. People want to live in Austin. Rental properties in prime locations are in good demand. This is the place. This is the game. And statistically over the long haul you'll see less volatility in real estate with a roughly equal return to investing in the stock market -- where you'll lose money buying cases of Maalox to stand the unrelenting volatility.

Numbers in isolation always bug me, because they can be made to say almost anything, but numbers plugged into a big picture of what's going on in a market make a case. In this instance, it's for Austin being THE place to put your money in real estate.