Real Estate Blog

The climate at the fifth annual housing forecast event held by the Home Builders Association of Greater Austin and the Austin Board of Realtors was positive and forward-thinking. I liked what I heard on January 8, and I like what the numbers indicate for real estate investing in 2013. Here's what the experts have to say.

- Low interest rates are here to stay, likely through 2015. We may see a little bobble up or down, but there shouldn't be any major changes.

- Home prices are going up steadily, a fact which can in itself further fuel the recovery, because rising prices move some waffling buyers off the fence. Climbing prices motivate buyers by making them think, "I better move now, before I have to pay more."

Now, put these factors together and you have one of two possible scenarios.

- People who can qualify for financing will pay less in interest, and they may feel pressured to capitalize on that.

- The other group, however, is coming out of the recession with dinged credit and other financial issues. They may well be more receptive to high-quality, long-term lease arrangements.

That's where profitable rental property comes into play for investors. With more people either deferring a purchase while they recover financially, or while they save up to buy, leases are in high demand. Consequently rents are going up dramatically, which make single and multi-tenant investments look more attractive. There's been an 18% overall increase in local rent levels since the third quarter of 2009.

A second major pool of potential tenants comes from our ever-brightening job situation. The Austin economy added 35,000+ jobs in 2012, with predictions for an additional 30,000+ in 2013.

In addition, the University of Texas is poised to build a medical school in the vicinity of the existing tennis complex. If you have a rental property in central or east Austin, you'll have no problem keeping it filled.

There's less than two months worth of real estate inventory currently on the market, and rental vacancy is just 5%.

I've been talking for months now about the high favorability of finding affordable properties in prime locations. Increasingly, however, it's fair to say that Austin itself is the prime location. We are, without question, in a regional housing recovery that began sometime around mid-2011 and is continuing to gain steady traction.