The HBA held the 2010 Mid-Year Economic Housing Forecast yesterday.
The program was presented by Dr. Ted C. Jones, PhD, Senior Vice President and Chief Economist for Stewart Title Guaranty Company. After receiving a Bachelor of Science degree in Agricultural Economics from Colorado State University, Ted earned a PhD in finance with a minor in statistics and a master’s degree in land economics and real estate from Texas A&M University, where he served as chief economist at the university’s Real Estate Center, the nation’s largest publicly funded real estate research group.
According to Jones, the growth of the regional housing market is directly tied to the area’s ability to create and maintain jobs and positive consumer confidence. While the US lost 1.37 million jobs since June 2000, Austin grew 94,700 net new jobs between May 2000 and May 2010. The region has gained 9,900 jobs year-to-date through May 2010 with 1,000 of those jobs gained in May 2010 alone.
“Simply stated, Austin is a job-growing machine,” says Jones.
The population of the Austin Metropolitan Statistical Area (MSA) is forecast to grow by roughly 273,000 people every five years; doubling our current population of approximately 1.7 million by 2035.
“The current rate of new construction of all types of residential dwellings is just 10,000 per year. This is not even close to keeping up with the forecast population growth of the region,” says Jones.
Buyers who may be “on the fence” are encouraged to buy now. If interest rates were to tick up just 1%, the price of a home would have to decline by 10% to make up the difference. Home prices are already on the rise in the greater Austin region. Expected population growth coupled with the lack of new home starts that will keep up with the region’s growth will likely cause prices to rise further.
Houston, Austin and Dallas-Fort Worth are 1-2-3 in the latest employment rankings of the nation’s 100 largest metropolitan areas. The three Texas markets have added a total of 107,200 private-sector jobs since mid-2007, while keeping their unemployment rates below 5 percent.
Texas’ impressive performance, ironically enough, is partially the result of higher energy costs, the same factor that has bedeviled much of the rest of the nation.
“The state’s natural resources and mining industry, helped by higher oil prices, posted an annual employment growth rate of 6.4 percent from June 2007 to June 2008 and ranked first among Texas industries in employment-growth rate,” said a midyear report from the Real Estate Center at Texas A&M University.
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