Austin leads the way in downtown job growth

austin riverAlthough most newcomers choose to live a suburban life, job growth in Central Austin is now outpacing job growth in the suburbs, according to a new report from City Observatory, a Portland, Oregon-based think tank.

In fact, Austin now leads all other U.S. cities in terms of the percentage of its overall workforce working downtown and in downtown job growth.

According to the report titled “Surging City Center Job Growth,” the downtown-oriented job growth in Austin mirrors trends seen in metro areas across the nation, reversing suburban-oriented job growth trends that stretch back more than 50 years.

As recently as the five years from 2002 to 2007, job growth was still suburban-oriented around U.S. cities. Then, job growth in suburban areas was growing at about 1.2 percent annually, compared to 0.1 percent in urban cores. But between 2007 and 20011, a switch happened, with job growth in urban cores rising to 0.5 percent annually, while suburban jobs shrank by 0.1 percent.

In Austin, the urban core job growth flip has been more dramatic. Between 2002 and 2007, city-center job growth in Austin was about 0.6 percent annually and suburban job growth was about 3.1 percent annually. Between 2007 and 2011, though, city center job growth in Austin surged to 3.4 percent annually while suburban job growth slowed to 2.3 percent annually. That’s the fastest-growing urban core job growth in the nation in that time. Austin, with 28.8 percent of its jobs located in the urban core, now has the highest level of core employment in the nation, ahead of even New York City, which only has about 23 percent of its employment in its urban core.

But while Austin’s new jobs are moving downtown, Austin’s overall population growth has, recently, been driven by growth in the suburbs, a fact underscored in a recent Austin Business Journal cover story that found that more than 62 percent of the Austin-area’s population growth since 2010 has been centered in about 54 suburban census tracts, with the fastest growing areas being Pflugerville, Round Rock and San Marcos.

 

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Statewide economic, population growth drove Texas real estate in 2014

texas flagTexas continued to be a national leader in economic, population and housing market growth in 2014, yielding significant growth in all areas of Texas real estate over the last year, according to the 2014 Texas Annual Housing Report released today by the Texas Association of Realtors.

“It’s a great time to live in Texas. The high demand for Texas real estate is not being fueled by speculation and investment activity – it’s driven by the thousands of people who move to the Lone Star State daily,” said Dan Hatfield, chairman of the Texas Association of Realtors. “People are moving to Texas from across America and around the world to take part in our state’s booming economy, business-friendly environment and quality of life.”

Texas currently gains more out-of-state residents than any other state and is a leader in home sales from international buyers. The 2014 Texas Relocation Report released in October showed that more than 584,000 people moved to Texas from out of state in 2013, whereas September’s 2014 Texas International Homebuyers Report showed that home purchases by international homebuyers reached its highest level in five years, contributing more than $11 billion to the Texas economy in a 12-month period.

The Lone Star State’s rapid economic, job and population growth had a positive impact on multiple segments of the Texas housing market over the last year. The 2014 Texas Homebuyers and Sellers Report released in March reported that Texans’ median household incomes rose significantly in 2013, increasing 9.6 percent year-over-year to $91,700. This is nearly double the nationwide increase of 5.6 percent to $83,000 during the same time frame.

“Virtually every segment of the Texas housing market has benefitted from our state’s continued growth,” adds Hatfield. “Over the last year, however, we saw several areas of Texas real estate that were still recovering from the recession in 2012 really begin to take off in 2013 and 2014, including luxury home sales and housing development.”

Luxury home sales surged to become one of the fastest growing price classes ($1 million or more) within the Texas housing market. January’s 2014 Texas Luxury Home Sales Report reported an average 35 percent year-over-year increase for luxury home sales in Texas’ four major metros in 2013. Small land sales in Texas – many of which were used for ranchettes, vacation homes and recreational uses – were also strong, with 4,189 small land sales statewide in 2013, according to April’s 2014 Texas Small Land Sales Report.

Housing development picked up significantly over the last year, with new home sales in Texas outpacing those nationally by more than half according to the 2014 Texas Homebuyers and Sellers Report released in March. While the 2014-Q1 through 2014-Q3 Texas Quarterly Housing Reports continue to show statewide inventory levels that are approximately three months below the Real Estate Center at Texas A&M University’s balanced housing market level of 6.5 months, Texas homes sales in 2014 have kept pace with last year’s strong levels, putting 2014 on-pace to surpass 2013 as the second-best year in Texas real estate.

In addition, low inventory levels also drove Texas condominium and townhome sales to be the fastest-growing segment of the housing market, increasing an average 10.5 percent in Texas’ four major metros in the first half of 2014. As reported by the 2014 Texas Condominium Mid-Year Sales Report, condominiums were also a popular choice due to rising home prices statewide, which steadily increased between five and 10 percent during the year.

Despite this rapid market growth, tough lending standards and a competitive homebuying market caused some Texas homeowners to remodel their current homes instead of entering the market. The 2014 Texas Remodel Valuation Report showed that remodeling projects became increasingly more popular and profitable over the last year, with smaller, functional projects that boosted a home’s curb appeal yielding the most recoup costs statewide.

Hatfield concluded, “The Texas housing market will likely continue to be highly competitive in 2015, but rising housing development and inventory levels as well as greater access to homebuyer education programs like those promoted through Get Ready Texas will help make the dream of homeownership attainable for all Texans. This has been a glowing year for Texas real estate, and 2015 is on-pace to be just as bright.”

Buyers Are Paying More for New Homes

home for saleRising prices may be putting new homes out of reach of more buyers. The median price of a new home sold in the United States climbed 15 percent from a year earlier. The median new-home price is now $305,000, which is the highest level on record, according to the Commerce Department.

Historically low interest rates, near 4 percent, and an improving labor market have helped to increase new-home sales, but sales were up only 1 percent in the first 10 months of this year compared with the same period in 2013. What’s more, October’s annual sales pace is only about half the average annual level of sales from 1996 through 2006.

“I think we saw a little price resistance from the consumer,” says John Johnson, David Weekley Homes’ chief executive. “There are a bunch of people who are waiting until they feel more confident about the future.”

Builders are selling fewer, more expensive homes, and those higher-end homes are making it more profitable for them, analysts say.

Meanwhile, as home appreciation has slowed, sales of more affordable existing-homes are increasing in recent months. Pending home sales are up 2.2 percent in October compared to a year ago, according to the National Association of REALTORS®.

The median existing-home price for all housing types in October was $208,300, nearly $100,000 less than the median price for a new home.

“The increase in median prices for existing homes has leveled off, representing a healthier pace that has kept affordability in check for buyers in many parts of the country while giving more previously stuck home owners with little or no equity the ability to sell,” Lawrence Yun, NAR’s chief economist, said in a recent statement about pending home sales.

Source: “New-Home Prices Surge Despite Lackluster Demand,” The Wall Street Journal (Dec. 1, 2014) and “Soft New-Home Sales Weigh on Recovery,” The Wall Street Journal (Nov. 27, 2014)

Thanksgiving Weekend Top Events in Austin, TX

Thanksgiving Weekend Top Events in Austin, TX

turkey trtTHURSDAY

Austin is the 2nd best real estate market in the country.

austin at sunsetThat’s the assessment of the Urban Land Institute, which published its annual “Emerging Trends in Real Estate” report Wednesday.

The report is based on interviews with real estate investment experts around the world and is prepared in association with PricewaterhouseCoopers.

Austin has had a strong showing the past four years, but the outlook for 2015 is the best ever, especially for a secondary market. For specific sectors, Austin is ranked No. 2 for investment, No. 4 for development and No. 1 for homebuilding.

Of particular note is the fact that Austin ranked No. 1 for office investment and development — which has to be good news to active office developers includingEndeavor Real Estate Group, Cousins Properties, HPI Real Estate Services and Investment, Stream Realty Partners, Karlin Real Estate Group, Ryan Cos. andBrandywine Realty Trust. All have major office projects under construction.

The market that beat out Austin in all sectors is neighboring Houston. Dallas/Fort Worth came in at No. 5 while San Antonio was way down the list at No. 23.

“Austin has been a favorite of survey respondents for a number of years,” the report states. “Survey respondents and interviewees like the industrial base, the appeal to the millennial generation and the lower cost of doing business in Austin.”

Supply concerns potentially could have a negative impact for investors of industrial, hospitality and multifamily properties, the report added.

Austin also earns kudos for the strong representation of investors and developers that are locally based.

“The availability of capital and an active local development community should guarantee a steady flow of investment opportunities in 2015,” the report concludes.

The one sector where Austin lags behind is in industrial product. Austin is not a distribution hub and likely won’t become one, given transportation infrastructure weaknesses and the fact that no major east-west interstate highways cross through the area.

By:   at Austin Business Journal

Austin heads list of top global cities

By: Jan Buchholz at Austin Business Journal

austin riverAustin figures prominently in a global real estate and economics report, even to the point of it being the only U.S. metro area mentioned in the “10 Cities to Watch.”

The report cropped up last week on the Philadelphia Real Estate Council website and then was referenced Oct. 20 on theRound Rock Chamber of Commerce site.

The ranking is part of a much larger — and fascinating report — that was penned by JLL, the global real estate brokerage firm. The only downside about this is that the report is nearly a year old. It first published in November 2013. Still, it provides interesting insights based on 150 city indexes and benchmarking reports.

Ostensibly, Austin still is a city to watch along with Brisbane, Australia; Calgary, Alberta, Canada; Colombo, Sri Lanka; Nairobi, Kenya; Nanjing, China; Riyadh, Saudi Arabia; Santiago, Chile; Shenzhen, China; and Tel Aviv, Israel. The 10 cities are cited as representing a new wave of global connectedness.

“Austin is perhaps the most successful post-financial crisis North American metro,” the JLL report states.

The 10 cities list is only a small part of the total report, and Austin is mentioned repeatedly for its depth of human capital, support for entrepreneurs and small business, job growth, overall economic strength and lifestyle options. View the 224-page report here.

An interesting assessment is based on the Travel and Leisure magazine’s “Quality of Life and Visitor Experience” survey, which measures 12 categories. Austin ranks in the top 10 for positive feedback from visitors and residents alike. It’s a top 3 location for singles, music and barbecue — but those accolades are tempered with a flip side.

“Perhaps unsurprisingly fine dining and luxury retail suffer as a consequence,” the report states.

Austin earns kudos in the Urban Land Institute’s “Emerging Trends in Real Estate Report.” Though the JLL report refers to last year’s performance in the annual ULI survey — Austin ranked 4th for market strength in the U.S. — it will be interesting to see how Austin shapes up this year. The latest ULI report will be released this week at the annual fall meeting, which is being held in New York City.

Austin houses sell faster than anywhere in the country

home for saleHomes are selling faster in Austin than anywhere in the country at the moment. That’s the conclusion of California-based ZipRealty Inc.(Nasdaq: ZIPR), an online real estate brokerage and research company.

The survey, which crunched numbers from the Multiple Listing Service, indicates that half of all Austin houses on the market are selling in 10 days or less. The median number of days a house is on the market is different from the average days on the market, which is the matrix commonly cited by the Austin Board of Realtors. In ABOR’s most recent report, Austin single family houses are selling on average in 39 days.

The large difference in the statistics likely indicates that certain types, price ranges or locations of houses are selling very quickly — perhaps as soon as they are entered in MLS, while other houses — probably high-end luxury homes — are taking much longer to sell.

Both ABOR’s and ZipRealty’s numbers are based on market conditions as of June 30.

The second-fastest market for home sales is Washington, D.C., and Northern Virginia with half of all houses selling within 14 days. The median time on the market is 15 days in Dallas, Denver and Portland, Oregon. Houston and Seattle log in at 17 days. Perhaps most surprising are the markets of Sacramento, California, and Boston where the median days on the market is 19.

Austin comes in second for median home value with a 14 percent year-over-year increase to $266,000. The largest median price increase was in Sacramento where home values increased 15 percent to a median home price of $267,000. The third slot was Las Vegas with a 12 percent price increase to $182,000 followed by Houston, also with a 12 percent increase to $215,000 and Orlando, Florida, with an 11 percent increase to $154,000.

By:  at Austin Business Journal