Real Estate Blog

On Thursday, January 13, the Home Builders Association of Greater Austin and the Austin Board of REALTORS® held their Third Annual Housing Forecast. The event didn't forecast smooth sailing for the area's housing market, but it did support everything we've been reading and discussing in terms of a recovery.

This is the only comprehensive housing forecast for Austin and the surrounding region, so it bears looking at closely. Metrostudy, which is the country's leading provider for primary and secondary housing market information, is telling us to look for a new surge in home building starting in 2012.

Now, let's think about that as real estate investors for just a second. We're ten months away from the time period to which they're pointing. Builders are acquiring land, but they're not really building, and when they do, it takes about 24 months for a new development to really get rolling.

That means resales of existing homes are going to pick up in 10 months and it means the leasing market for residential properties is going to be very, very strong. People who have the purchasing power to buy, but who aren't finding what they want, have to have somewhere to live while they wait. If you have a nice residential property in a good area and have done a decent rehab before leasing, we could see a lot of translations to sales within the same time period.

A great deal of this depends on the other major bit of information to come out of the forecast. We know this, but it can never be said enough, technology is driving the Austin economy and more tech workers are moving into our city all the time. We're particularly strong in the wireless sector with about 100 existing firms employing 4,000 people.

All you have to do is scan the growing platform wars between the Apple iPhone (with the 5th generation device coming out this spring), Android based smartphones, Windows 7 devices, and BlackBerries to know that wireless traffic in this country -- really in the world -- is going nowhere but up. We're not talking phone calls here, but data intensive applications like gaming -- and Austin is a hub for game development across a number of mobile and online platforms.

Overall, I think the forecast was very good for us as investors. It tells us that in the next 10 months minimum -- and more likely the next 3 years maximum -- leased properties will continue to be in high demand and we see a very good chance of translating some of those lease contracts into sales if that's the investment goal for a given property.

Personally, I'd rather see a slow, steady recovery built on quantifiable factors like local job growth in an expanding industry than a rush to jump back in that could very well backfire. I like what I'm hearing. Austin and the surrounding region are definitely headed in the right direction and it's all good news for real estate investment.