In 2011, the Austin real estate market could be one of the most stable in the country. Some housing analysts are predicting a small price decline in the first part of the year, followed by years of growth and stability.
It could truly be a happy new year for Austin-area homeowners. Having avoided most of the housing-related drama of the last few years, the Austin real estate market has been relatively stable. Austin home prices are likely to appreciate in the latter part of 2011, barring any unforeseen catastrophes.
Ingredients for Housing Stability
Like many cities in Texas, Austin never experienced much of a housing bubble. This is one of the factors that spared it from the housing crash that devastated the rest of the United States. Population and job growth have also played a big role.
Over the last few years, the population in the Austin metro area (including nearby Round Rock) has grown considerably. Between 2000 and 2009, the population grew by 34 percent. This props up housing demand at a time when it’s shrinking in other metro areas. A relatively low foreclosure rate has kept home inventories in check. All of this helps balance the scales between supply and demand. It also sets the stage for a stronger Austin real estate market in 2011.
Credit Suisse, an international finance company, recently released their monthly housing survey for the 50 biggest real estate markets in the U.S. The report showed changes in home prices from November to December 2010. Out of all 50 metro areas, Austin was ranked in the top three in terms of home-price increases. This and other reports seem to suggest that the Austin real estate market could be one of the strongest in 2011.
Austin draws in plenty of younger migrants from other parts of the country. According to data released by the Brookings Institution, the capital city attracted the largest numbers of young Americans (25 – 34) from 2007 to 2009. This is a prime demographic for first-time home buyers. Translation: The Austin real estate market is fueled by a steady influx of upwardly mobile young people.
The data above was compiled by demographics researchers at the Brookings Institution.
The job market in Austin is also one of the best in the country. Much of this comes from the tech sector. According to Grubb and Ellis, a market research firm, Austin will have one of the strongest commercial real estate markets for the next several years.
LegalZoom, the Los Angeles-based provider of online legal documents, recently chose Austin as the future home of its regional headquarters. And they weren’t alone in this decision. According to the Greater Austin Chamber of Commerce, 2010 was a banner year for business recruitment. In that year, 27 companies relocated their headquarters or other operations to Austin. This means more jobs, more economic growth, and more home buyers to fuel the Austin real estate market in 2011.
Austin Real Estate in 2011
This is not to say that Austin home prices won’t fall in 2011. It’s still a possibility. In November of last year, Moody’s Analytics predicted that housing prices in the U.S. would decline though the first half of 2011. They predicted the worst declines in Las Vegas, Fort Lauderdale and Riverside, California. The least severe declines, said the report, would happen in places like Austin, Texas (which has more price stability than the rest of the country).
What will the Austin housing market look like by the end of 2011? Only time will tell. But if I were a potential buyer in the Austin area, I would make my move sooner rather than later. Mortgage rates will likely stay below 5 percent for the next few months, and home prices are equally attractive (Austin is one of the most affordable real estate markets in the country). Add in a dose of market stability, and you’ve got a pretty good scenario for home buyers.