Austin Real Estate Blog

Since 2008 there have been 5 major regional cities that have fared very well through this recession. Among the 5 Austin of course struck well. Brookings reviewed the gross metropolitan product output for San Antonio, Austin, Houston and Dallas in Texas, and Oklahoma City, Oklahoma. It is no surprise as these cities have grown in output since the recession. In Brookings’ most recent survey these cities experienced a decline in the first quart of 2009. Austin less than 1% decline of .06% between the fourth quarter of 2008 and the first of 2009.

This study was conducted by the Brookings Institute in Washington, DC, as part of their MetroMonitor program. This institute conducts a variety of studies to narrow down where cities are faring through the recession. They review employment vs unemployment rates, wages and housing costs.

Austin, as usual, fared well through the process. Austin’s average wage increased during the same period of time, as much as 1.4 percent. Housing costs are also increasing in the Austin Metro Area. There was a minor decrease in job opportunities over the reviewed time, .05%.

This is only one of several studies to produce a clear picture of how well the Austin metropolitan area is increasing, improving and developing even through a recession that has brought most of the country down.

Round Rock is not just a suburb of Austin. It is a community that has flourished amid the recent economic woes. The schools here are top notch and the cost of living is still reasonable. It is home to some big companies, which helps to maintain a low unemployment rate. Residents of Round Rock consider it a town that would be a good choice to live, no matter who you are.

Founded in 1851, and later named for a smooth rock in the center of Brushy Creek nearby, Round Rock has made it to the top of several lists such as best place for young people and best place for relocating families. Dell has headquarters here supplying about 9,000 jobs. The unemployment rate as of early 2008 was 3.6%, at a time when nationally it is more than 5%. The median home price remains around $250,000. Business Week named Round Rock as one of the best areas for real estate bargains. The city itself boasts many shopping attractions, including an outlet mall. Sports are another big attraction here. Nolan Ryan owns the Round Rock Express, the city’s own minor league team. Parks are maintained beautifully, leaving a lot of room for residents to relax and enjoy nature or golf.

Those who call Round Rock home love it for all it has to offer. There is a small town feel to this city that has all the amenities. Commutable to Austin, many have chosen to live here for this community feel. The future looks bright in this city.

According to new data from the US Census Bureau, Austin’s population grew by 18,000 new residents between July 2006 and July 2007. This makes Austin the eighth fastest growing city in the US during this year. Houston led the pack with 39,000 new residents.

In July 2007, Austin’s population stood at 743,074, a growth of 2.4 from 2006. Many of the neighborhoods immediately surrounding the city of Austin showed significant growth between 6 percent and 25 percent, many in the 11 percent to 25 percent range. This increase in population offers opportunities as well as posing challenges for managing and controlling the growth.

Within Texas, four suburbs around Austin made showed significant growth during the year between July 2006 and 2007, and were numbered among the 25 fastest growing cities in the state. Cedar Park ranked 11^th, Round Rock was 16^th, Georgetown came in at 19^th and Pflugerville was 22^nd.

The growth has slowed, due in part to the real estate meltdown that, while hasn’t been as significant as the rest of the country, still has had a small impact on the Austin area economy, and the state as a whole. Even so, Betty Voights, executive director of the Capital Area Council of Governments (CAPCOG) declares that, “while fewer people may be moving here now compared to the last few years,  we’ve seen five cities in the region double in population size over the last five years regardless of the housing downturn.”

Plans are in the works to develop a 1,000 acre area northeast of Round Rock near the new Seton Medical Center and the Higher Education Center. The land is owned by the Avery family and they have partnered with the Waterstone Development company to begin a mix use development project in the area.

The project, named the Avery Center, calls for as many as 1,200 single family homes and 5,500 rental units. Townhouses, student housing, and higher end homes are planned, along with a 132 acre retail area which will include stores, restaurants and professional office space. Open space is planned, with a lake, trails and park areas, with 100 acres being set aside for this purpose. The plans also include a church, school, and a child care center.

The developer is working with Round Rock city officials on a plan for bus service for residents of the development to Seton, Austin Community College, the State University, and other places of study and employment.

The project is expected to take 10 to 15 years to complete and add $1.6 billion to the tax rolls. This area of Round Rock is one that is doing well developmentally, in spite of financial troubles that have slowed or halted other projects. The national real estate and credit crisis that has affected so much of the markets hasn’t had the same impact in the central Texas area.

Robert Wunsch, chief executive officer of Waterstone, is being picky about who he chooses to build the homes and rental units. He wishes to stay close to the vision that the Avery family has for their land and intends to maintain a high set of standards for construction and design. The houses will range in price from $180,000 to over $1 million.

Even though 2007 was a record breaking year and the national economy appears to have taken a hit, Austin is going gangbusters. You’ve got to know things are going well when the mainstream media says the “Austin economy spanks the competition”. Here’s to a great 2008! If you’re thinking about moving to Austin, give us a call. It would be our pleasure to help!

bizjournals.com
Austin economy spanks the competition
Thursday January 31, 3:41 pm ET
High-tech, a booming film industry and the University of Texas all helped propel Austin to the top of Forbes’ 2008 list of America’s Fastest Growing Metros.The magazine ranked Austin No. 1 among the nation’s 100 largest metropolitan areas. The list sorted cities by their anticipated gross domestic product growth between 2007 and 2012. Austin’s GMP, or the value of goods and services produced in the area, is expected to climb 32 percent over the five-year period.
Forbes credits the local boom to high-tech employers like Dell Inc. (NASDAQ: DELL – News) and IBM (NYSE: IBM – News) as well as the University of Texas, which is producing ample engineering talent. …

Forbes used GMP forecasts provided by Moody’s Economy.com. …

Published January 31, 2008 by the Austin Business Journal

The tightened credit in the home mortgage field may actually be helpful to Austin area businesses. As we have reported, the impact of the subprime mortgage crisis has slammed the door on many borrowers — even those with “good”credit.More and more Austin area residents who, just a few months ago, might have sailed through a second mortgage application, a refinancing or a home purchase are finding it more difficult – if not impossible – to be approved for those loans today.This is where business borrowers come in. For the most part, Austin area financial institutions are eager to lend to businesses – especially small businesses with good credit records. This helps to offset their dwindling mortgage income. Not to minimize the crisis that is tightening the screws in the mortgage market. It’s a serious problem. But out of this problem an opportunity is emerging for businesses that may need to seek more money.

Jobs are a basic driver of the economy. And the Austin area is among the strongest in the nation in creating new jobs.For more than two years now, the Austin metro area has been adding new jobs at one of the strongest paces in the nation.Our metro includes the counties of Travis (Austin), Williamson (Round Rock, Georgetown), Hays (San Marcos) Caldwell (Lockhart, Luling) and Bastrop. The pace of job growth shows no signs of letting up.

Not only does Austin lead the state economically, but by at least one measure Austin is the best place in the US for business.

Moody’s Economy.com Inc. gave Austin the top spot over almost 400 US metro areas, based on current conditions and expected trends as well as potential risks.

- Excerpt from From The Neal Spelce Austin Letter (www.AustinLetter.com).

The Austin Market
When I read these tidbits yesterday I remembered that, like all markets and businesses, there are ups and downs. While the mortgage fiasco has made the real estate market slow a bit, Austin is still outperforming most places in the United States. I think the reactions from people has to do with the incredible (by Austin standards) year that 2006 turned out to be for real estate. Comparing the 2007 real estate market to the 2006 real estate market and going bearish, resembles stock market investors worrying about a few hundred point drops when the DJIA is higher than it’s ever been.

As you might guess, I’m still optimistic about the market in Austin as a whole.

That said, there’s at least one place where I wouldn’t want my money right now.

Downtown Austin Condos
Yesterday, Avera Development removed The Magnolia development from it’s website and is reevaluating it’s development plans. The Magnolia was planned to be 139 units and no definitive direction was announced by the owners although some sources expect the land to be used for an apartment complex.

Additionally, another development group working on a project announced as The View is selling the land and scrapping plans for their 69 unit green development.It’s understandable that people are starting to reevaluate their developments. With the number of planned and in development units for downtown at an all time high, I’d hate to be the last guy to complete my condos. While the condos in many of the developments have sold quickly, if the pace of building keeps up I wonder if we’ll wind up like Denver or Miami were 2006. Given that our market generally lags the nation a bit, we could be in for a bumpy ride in the chic downtown Austin condo market.