Strong Job Growth will Help Austin Real Estate Market
October 29, 2010 15:01 Filed in: News
Job growth is a requirement for real estate appreciation in a normal market. While this still isn't a normal market, the latest Central Texas employment numbers provide hope that normalcy may someday return.
According to the Texas Workforce Commission, the Austin-San Marcos-Round Rock metropolitan area added 17,300 jobs over the last 12 month period. This 2.3 percent increase dropped the unemployment rate from 7.2% in August to 6.8% in September. In comparison, the national unemployment rate is still 9.2% and the Texas unemployment rate is 7.9%.
According to the Austin American Statesman, "From August to September, the area brought on 2,700 positions, primarily from government adding 4,400 jobs. Government employment was up about 3,000 jobs year-over-year in September. Education, health, leisure and hospitality were the only other sectors to add jobs from August to September, adding a cumulative 1,400 jobs. Professional and business services shed about 1,100 positions during the same one-month period, the largest decrease that period."
Austin has been very lucky. Our real estate dip has been relatively minor. Our market never crashed. Our foreclosure rate is mild. And our unemployment rate has been one of the best in the nation. As jobs come back, the big remaining issue is the financing market. With mortgages still hard to get and down payment requirements still very high, mortgage lending is the missing piece of the recovery puzzle.
While the Austin market has faired well, downtown condo over-supply has led to a more significant drop in downtown real estate prices and difficulties with condo unit liquidity. With most of the reasonably priced units sold and a lack of new inventory on the horizon, the downtown condo market will hopefully stay stable -- or see appreciation on the low end -- over the next couple of years.
According to the Texas Workforce Commission, the Austin-San Marcos-Round Rock metropolitan area added 17,300 jobs over the last 12 month period. This 2.3 percent increase dropped the unemployment rate from 7.2% in August to 6.8% in September. In comparison, the national unemployment rate is still 9.2% and the Texas unemployment rate is 7.9%.
According to the Austin American Statesman, "From August to September, the area brought on 2,700 positions, primarily from government adding 4,400 jobs. Government employment was up about 3,000 jobs year-over-year in September. Education, health, leisure and hospitality were the only other sectors to add jobs from August to September, adding a cumulative 1,400 jobs. Professional and business services shed about 1,100 positions during the same one-month period, the largest decrease that period."
Austin has been very lucky. Our real estate dip has been relatively minor. Our market never crashed. Our foreclosure rate is mild. And our unemployment rate has been one of the best in the nation. As jobs come back, the big remaining issue is the financing market. With mortgages still hard to get and down payment requirements still very high, mortgage lending is the missing piece of the recovery puzzle.
While the Austin market has faired well, downtown condo over-supply has led to a more significant drop in downtown real estate prices and difficulties with condo unit liquidity. With most of the reasonably priced units sold and a lack of new inventory on the horizon, the downtown condo market will hopefully stay stable -- or see appreciation on the low end -- over the next couple of years.