By David Brodsky, Principal at David Brodsky Properties with Keller Williams Realty
Since a real estate purchase is often the most significant financial transaction a person will make in their lives, conflicting data and the threat of financial loss can leave some homebuyers on the fence for years. Unfortunately, taking that kind of time to build up the courage to buy a home often forces a more expensive purchase in a strengthening real estate market. To help build confidence in the Austin real estate market this year, here are three key things to know about real estate in Austin, TX in 2016.
1. Austin is a "New World City"
According to trusted financial and professional services firm JLL, the Austin real estate market is an emerging investment hub with a promising future. A recently released analysis from JLL ranks Austin as number 17 out of 300 worldwide cities in their “Investment Intensity Index.” JLL releases its Investment Intensity Index to show how well a commercial real estate investment market is performing by comparing the volume of direct real estate investment in a city relative to the city’s current economic size. The analysis covers a three-year period and shows a measure of real estate market liquidity, as well as a useful barometer of a city’s overall “health.”
In the most recent Index, JLL explained the emergence of “New World Cities” as prime investment markets. Per JLL, these “New World Cities” are described as being small to medium-sized cities with open real estate markets, favorable infrastructure and livability platforms, and dynamic economies. Austin was pointed out as an ideal example of a “New World City” because of its population density, booming economy and relatively affordable housing.
Continued investor activity in the Austin real estate market will sustain market growth and support home values.
2. Austin's Population Will Continue to Grow
For five out of the past six years, Austin has dominated Forbes’ fastest-growing cities list. According to Forbes, Austin will have the highest-projected population growth rate for 2016 at 3.15%. Austin’s ever-strong economy is largely attributed to the expanding population. “Thanks to its booming technology, pharmaceutical and biotech industries, low cost of living, and cachet, the Austin economy remains on fire,” wrote Erin Carlyle, author of the Forbes report that accompanied the data.
Indeed, Austin has a hot economy and job market that lure prospective employers and employees alike. Austin experienced an overall job-growth of 4.5 percent for 2015, which is triple the state 1.5 percent average according to an Economic Indicators report from the Dallas Fed. Strong jobs growth is expected to continue in 2016, with analysts predicting Austin to continue to be an abundant employment resource.
Supporting the strong outlook for the Austin jobs market is data from financial services provider WalletHub. Analysts at WalletHub ranked Austin as the third-best U.S. city in which to find a job in 2016. Austin was included in a comparison of the 150 most-populated U.S. cities across 17 key metrics including job opportunities, employment growth and monthly median starting salary. Austin scored 65.10 out of 80 total points possible in two key areas including “job market” and “socio-economic environment.” Points were scored for a low unemployment rate, industry variety and full-time employment that help fuel a thriving Austin economy.
3. Demand Will Continue to Outpace Supply
As newcomers continue to flood the Austin metro, demand for housing will increase and keep it well above supply. Despite developers successfully expanding their construction pipelines to provide more new homes throughout the Austin metro, it’s far short of what’s needed to create a balanced market. New home construction contributed to the 0.1 increase in housing supply this February over the same time last year, according to data from the latest market statistics from ABoR. Supply reached 2.1 months of inventory in February 2016, up from 2.0 months in February 2015.
Despite heightened new home production, however, supply remains desperately below housing demand. The Real Estate Center at Texas A&M University estimates 6.5 months of inventory as a balanced market. Considering the rate that housing supply has grown in the past year, it could be quite some time before supply catches up with demand to create a balanced Austin real estate market. As long as supply falls short of demand, the value of Austin real estate will continue to strengthen in a highly competitive market.
Above all, remember that a strong real estate consultant will enable you to achieve your real estate goals despite market conditions. Knowing local market statistics is important for being a well-informed consumer and having a trusted professional to advise and consult with you along the way will allow you to make the best possible real estate decision based on your unique situation. A real estate purchase is a major step toward creating wealth and financial stability. Rather than navigating the process alone, work with a trusted real estate agent and mortgage lending specialist to help guide you toward your goals. As a buyer, you’ll pay nothing for this invaluable service and you should be able to schedule a free consultation with multiple agents to decide who the best match for you is.
Article and information is courtesy of David Brodsky, Principal at David Brodsky Properties with Keller Williams Realty. Amplify Credit Union does not endorse or guarantee the perspectives, the advice, the users, the businesses, or the products or services sold by any users or businesses that appear in this article.
David Brodsky left the tech industry after 20 years and created David Brodsky Properties to help individuals achieve financial success through real estate. His experience as a Chief Financial Officer for several businesses, his success as a real estate investor and his passion to affect positive change in the lives of those with whom he works makes David a consummate real estate consultant. Not only is David a licensed agent and member of the Austin, Killeen and Temple/Belton Boards of Realtors, but he’s also a licensed broker-associate, Certified Negotiation Expert (CNE)® and a Certified International Property Specialist (CIPS)®.