Looking at a variety of statistics across a broad financial spectrum, Austin already reached a tipping point last year in residential real estate, according to Mark Sprague, Director of Business Development for Mission Mortgage. In a recent newsletter, Sprague provides an impressive list of statistics to support his premise.
Among the data that shows Austin residential real estate is already on the rebound:
• Consumer confidence is improving. In 2008-09, confidence index levels nationally and locally were around 50. Currently, Texas is at 89.7, the highest it has been in the last 12 months and up 38.2% from a year ago. The U.S. has increased just 6.9% in the same time frame.
• Consumer spending is up. In 2009 consumer spending dropped 4.5%, but in the last 6 months it has increased 7.5%.
• Unemployment is falling. The national unemployment rate hovers near 8.8% while Austin’s unemployment rate is much lower at 6.7%. Texas accounted for 48% of all jobs created last year nationally.
• Hiring is improving. Austin is ranked #2 for temporary hiring and more jobs have been created in the last 12 months than any other metropolitan city in the U.S., according to Forbes.
• Rental occupancy increases. Austin is currently seeing 95% occupancy of rental housing with few new units coming on line in the near future. Higher demand for rental property will lead to higher rent prices, which will eventually steer more renters into the purchase market.
• Home prices have stabilized. Overall, the City of Austin continues to see slight appreciation in home prices. February data, the most recent available, shows Austin home prices increasing by 1.8% over the 12-month period.
• Lowest foreclosure rate. According to Realtytrac, a national foreclosure reporting service, Austin is ranked 383 out of 383 for number of foreclosures.
All of these statistics indicate that Austin is well on its way to recovery and should lead the nation in residential performance in a number of categories. So, while the national news continues to sound out dreary alarms, the local environment is quite different.
Sprague likes to use the following analogy to illustrate this phenomenon:
“Real estate is like the weather.
You may watch the national weather report on TV every morning,
but you dress for local conditions.”