2011 Housing Forecast - Austin Texas

I attended the 2011 Economic Housing Forecast here in Austin yesterday which is sponsored by the Home Builders Assn and the Austin Board of Realtors.    Speakers were from the Chamber Development board, a Federal Reserve Bank member from Dallas (who is also a professor of economics at SMU) and a gentleman who works for a company that has been around for a long time and all they do is forecasting, called Metrostudy. 

All I can say is, Texas and Austin appear to be one of the best places to be at this time and going forward.    We appear to be ahead of the curve and actually didn’t really get hit in the same way as the rest of the country.  One point that was made which I hadn’t connected and which is interesting: Texas was much later in allowing home equity loans and lines of credit and instituted a rule that you cannot borrow or take out money in excess of 80% - that alone has probably kept us from as many foreclosures and short sales as lots of other areas.  

The expectation is that home prices will continue to drop somewhat in many areas and that foreclosures will continue to rise in most parts of the country. Austin foreclosures seem to have flattened and our prices have mostly stabilized.  Our builder lot inventory is being absorbed.   Austin had a 2.2% net job increase in 2010 and housing affordability has increased over the last 4 years.     Another interesting fact:  the Chamber has a full time person in CA recruiting companies to move here for a lower cost structure and bring jobs to our area.    Of course all sorts of things could happen to derail everyone’s forward progress in the country, including Austin, but overall, it appears quite favorable.  

The other thing that should help home sales here going forward is that usually we have about 5000-6000 apartment units come on line every year.  In 2011, they are only expecting 800 which may pressure rental rates upward and push more people back into looking at owning a home in future as lease rates will increase and occupancy rates will go up.    If you own rental property, you may see increased rental rates in your future.