Metrostudy Austin Director Eldon Rude will present an update on the Austin economy and its housing market on April 26, 2012 at the Austin Country Club

This event is limited to subscribers to Metrostudy’s Quarterly Advisory Services in the Austin market.

If you are not a current subscriber to Metrostudy’s services, and you wish to attend the event, please contact Eldon Rude at 512-473-2250, ext. 1000

Metrostudy Austin Director Eldon Rude will present an update on the Austin economy and its housing market on October 25, 2012 at the Austin Country Club

This event is limited to subscribers to Metrostudy’s Quarterly Advisory Services in the Austin market.

If you are not a current subscriber to Metrostudy’s services, and you wish to attend the event, please contact Eldon Rude at 512-473-2250, ext. 1000

(Austin, TX– January 26, 2012) Job growth and stable inventory levels were a positive for the Austin housing economy during 2011, and they may indicate a better year for 2012. This is according to Metrostudy, a national housing data and consulting firm that maintains the most extensive primary database on residential construction in the US housing market.

In the 12 months ending in December 2011, 16,100 net jobs were gained in the Austin MSA. “In our view the most promising information from the most recent job figures is the minimal number of jobs lost in the last year in the Government sector. As recently as Spring 2011 reports indicated that job losses in these sectors could be significant in 2011 and 2012,” said Eldon Rude, director of Metrostudy’s Austin Region.

During 4Q11, 1,269 homes were started, up 17% from 4Q10. During that same time, 1,552 homes were closed, up 8% from 4Q10. The annual rate of starts in 4Q11 was 6,105 units, up 5% (261 units) from 4Q10. The annual rate of closings in 4Q11 was 5,941 units, down 7.8% (506 units) from 4Q10. “The annual rate of starts has been generally flat for nearly 3 years. The fact that annual starts exceeded annual closings in 2011 suggests that with inventory levels so low, new demand is resulting in the need to start more homes,” said Rude.

New home inventory stood at 3,047 homes at the end of 4Q11. Inventory has remained around 3,000 for the last three years. “These stable inventory levels, along with healthy resale inventory levels and steady demand, have allowed the building community to maintain pricing through much of the downturn in the industry which began in 2007,” said Rude.

“While we expect the demand fundamentals of continued population and household growth, a tight rental market, and improving consumer confidence will result in greater new home demand in 2012 (as compared to 2011), the continuation of strict mortgage underwriting criteria will serve to limit the increase in new production over what
might otherwise be possible in the coming year,” said Rude.

For information contact:
Eldon Rude @ 512.473.2250 x12
email: erude@metrostudy.com

About Metrostudy
Metrostudy is the leading provider of primary and secondary market information to the housing industry and related industries nationwide. In addition to providing its own primary housing data for approximately 70% of the United States housing market, the company is recognized for its consulting expertise regarding real estate development, marketing and economic issues, and is a key source of research studies evaluating the marketability of residential and commercial real estate projects. Services are offered through an extensive network of offices located in major metropolitan areas throughout the U.S. For more information, visit www.metrostudy.com.

In spite of a slow recover from the national recession…Houston, Austin and San Antonio have already recouped all the jobs lost and Dallas-Fort Worth has regained nearly 70% of it’s lost jobs. This job growth has been spurred principally by the resurgent oil and gas industry. During the past week several articles have highlighted the continued expansion of domestic drilling in the nation and the projected continued growth in the oil and gas industry and more specifically the eagle ford shale. Texas’ heavy concentration of companies in the the oil and gas industry has allowed Texas to outperform the nation in terms of net new job formations. This is more evident in an analysis conducted by Economic Modeling Specialists, Inc. (EMSI), an Idaho based economics firm, which compares each states Total Job Growth to the Expected Job Growth. In the Article, “Which States are Growing More Competitive?” EMSI compares each state’s competitive advantage.

The following chart and table is taken from the article (click on the chart for the full version):

The competitive effect is calculated by the difference between the Total Jobs, 2011 and Expected Jobs, 2011.  This number indicates the overall competitiveness of the state’s economy versus the national economy. If the competitive effect is positive, the state is gaining a greater share of the total jobs being created than the national trends would have suggested. In terms of percentage, Texas ranked second with our 2011 jobs being 6% greater than expectations based on the national economy. However, the 880,586 competitive jobs is by far the largest competitive effect in the nation when compared to the next largest state. Texas’ competitive effect is more than 6 times greater than New York’s 142,843 competitive jobs and nearly 10 times greater than Louisiana’s 96,439 competitive jobs. It is important to note that Texas is not the only state benefiting from the oil and gas industry, as many of that states with a positive competitive advantage have strong and expanding energy industries.

As the economy improves in the near term, the states with higher competitive advantages will likely be the first out of the recession and will continue to attract jobs. This will have a positive impact on the housing market withing these states leading consumers to develop more confidence in these local economy’s as they continue to attract more people in search of jobs.

(Austin, TX– November 1, 2011) The fundamental drivers of job growth and a tight rental market continue to move the Austin new home market closer to recovery. This according to Metrostudy, a national housing data and consulting firm that maintains the most extensive primary database on residential construction in the US housing market.

In the 12 months ending in August 2011, 15,500 net jobs were gained in the Austin MSA. “This stable job growth along with an apartment market that is now over 95% occupancy should translate to more activity in the housing market, however negative national news and the continued strict mortgage financing criteria have held back any surge in demand,” said Eldon Rude, director of Metrostudy’s Austin Region.

During 3Q11, 1,714 homes were started, up 31% from 3Q10. During that same time, 1,701 homes were closed, down 5% from 3Q10. The annual rate of starts in 3Q11 was 5,919 units, down 3.7% (228 units) from 3Q10. The annual rate of closings in 3Q11 was 5,816 units, down 19% (1,333 units) from 3Q10.

New home inventory stood at 3,338 homes at the end of 3Q11. Although overall new home inventory levels have not changed measurably over the last several quarters, finished inventory in the move-up price ranges continues to tighten, with the 6 price ranges above $200,000 that Metrostudy tracks at 1.7-2.3 months of supply. “We have not recorded such tight inventory levels since the early part of the last decade,” said Rude.

“As we look to 2012, we anticipate that overall demand for new homes in the region will continue to increase, however, the issues of subdued consumer confidence and financing will continue to serve as governors to the growth we experience in starts in the next year,” said Rude.

For information contact:
eldon rude @ 512.473.2250 x12
email erude@metrostudy.com

About Metrostudy
Metrostudy is the leading provider of primary and secondary market information to the housing industry and related industries nationwide. In addition to providing its own primary housing data for approximately 70% of the United States housing market, the company is recognized for its consulting expertise regarding real estate development, marketing and economic issues, and is a key source of research studies evaluating the marketability of residential and commercial real estate projects. Services are offered through an extensive network of offices located in major metropolitan areas throughout the U.S. For more information, visit www.metrostudy.com.

Metrostudy Austin Director Eldon Rude will present an update on the Austin economy and its housing market on October 26, 2011 at Austin Country Club.

This event is limited to subcribers to Metrostudy’s Quarterly Advisory Services in the Austin market.

For information contact Eldon Rude at erude@metrostudy.com

Over the last two months several news stories appeared in the national media that could not have sent more mixed messages on the future of real estate in Austin, Texas.

First, Fiserv Case Shiller released its findings on the 15 housing markets in the U.S. which they think will experience the lowest appreciation rates over the next five years: Austin tied (with Waterloo-Cedar Falls, Iowa) for number nine on that list. The national headlines for this story generally read, “The Fifteen Worst Housing Markets for the Next Five Years.” That headline was certain to turn heads, and it did.

Several days later, at the other extreme, Forbes released a study ranking cities they expected to be the “boom towns” over the next decade based on job growth and demographic trends. You guessed it, Austin was at the top of that list. Although the subject matter for each study was slightly different, someone reading both headlines could not help but be a bit confused over the near term direction of the Austin economy and its housing market.

Why the apparent huge disparity in these rankings for Austin? While a quick reading of the headlines from the major news outlets certainly did not provide the answer, a closer read of many of the published articles on the studies does provide some clarity on the issue.

The Fiserv Case Shiller study identified the housing markets that are expected to appreciate at an annualized rate of less than 1.5% (or 7.5% over the next five years), a rate The Business Insider referred to as a “pretty lousy investment.” While this might be true in some circles, if you were to achieve this type of return on your home you would be better off than a savings account at most banks, and better still if you considered the potential tax benefits of owing your home. Regardless, the study ranked Austin the ninth worst housing market in the U.S. over the next five years, with an expected 1.2% annualized growth rate from 2011 to 2016.

While my review of the various articles citing the Fiserv Case Shiller study did not uncover the methodology used in their analysis, it would not be surprising that the markets at the top of the list (those expected to have the lowest appreciation rates) would be those that did not experience the boom and bust in home pricing like many markets in Florida, Nevada, Arizona and California during the last decade. This would explain why Austin might make this list. However, both Miami and Fort Lauderdale Florida are ranked in the top four markets expected to experience the lowest growth rates in home prices over the next four years. According to Fiserv Case Shiller, home values in both Miami and Fort Lauderdale dropped by more than 50% between 2005 and 2010, with Miami actually expected to have no appreciation over the next five years.

While my point is not to make a forecast of what home appreciation rates will be in Austin over the next five years, in my opinion anyone reading the numerous headlines generated from the Fiserv Case Shiller article could easily speculate that buying a home in Austin would not be a sound investment in the coming years.

At the other extreme are the various headlines from the Forbes study proclaiming Austin to be at the top of the list of the next boom towns. In developing their ranking, Forbes reportedly evaluated historic job growth trends, demographic factors such as population growth, family formation, growth in educated migration, as well as a broad measure of attractiveness to immigrants. While all of these factors certainly played a key role in Austin’s strong economic growth during the mid-1990’s and most of the last decade, the region is not immune to larger global and national economic forces that can and have negatively impacted our economy and housing market. The most recent example is 2009 when the region lost over 18,000 jobs. Furthermore, the job outlook over the next two years is not stellar considering layoffs which will occur in the state and local government sectors as a result of budget shortfalls.

As someone who has studied the Austin economy and its real estate market for over 26 years, a time horizon that has included several major economic cycles (both positive and negative), I’m always leery when I read a headline that includes the words “boom town.” While an analysis of past economic and housing statistics for any market will generally reveal large changes in market conditions over an extended period of time, most experts will not revert to using terms like “boom” or “bust” when referring to future events that may – or may not – transpire.

But, using these words can sure make for a catchy headline …

(Austin, TX– August 1, 2011) The Austin new home market maintains recent pace of construction, buoyed by positive job growth and a tightening rental market, according to Metrostudy, a national housing data and consulting firm that maintains the most extensive primary database on residential construction in the US housing market.

In the 12 months ending in May 2011, 13,700 net jobs were gained in the Austin MSA. “With job losses in the Government sector looming in the coming months, one of the biggest questions for the Austin economy will be whether job growth in the private sector will be strong enough to overcome losses in the Government sectors,“ said Eldon Rude, director of Metrostudy’s Austin Region.

During 2Q11, 1,813 homes were started, matching the pace of 2Q10. During that same time, 1,445 homes were closed, down 21% from 2Q10. “The relatively strong starts in the second quarter were tied to several factors including the region’s largest builder increasing starts as they move toward fiscal year end, as well as increased demand in the move-up market spurring builders to replace depleted inventory,” said Rude.

New home inventory stood at 3,320 homes at the end of 2Q11. “New home inventory remains at very low levels,” said Rude. Finished vacant inventory continues to decline, and has reached it lowest level in nearly a decade.

“If job growth in the Austin region does stay positive over the next two years, and the in-migration of residents from other State’s continues at recent levels, the demand for all forms of housing will intensify in the area,” said Rude. “However, we don’t expect large percentage increases in our production rate consumer confidence improves and clarity emerges in the mortgage market.”

For information contact:
eldon rude @ 512.473.2250 x12
email erude@metrostudy.com

About Metrostudy
Metrostudy is the leading provider of primary and secondary market information to the housing industry and related industries nationwide. In addition to providing its own primary housing data for approximately 70% of the United States housing market, the company is recognized for its consulting expertise regarding real estate development, marketing and economic issues, and is a key source of research studies evaluating the marketability of residential and commercial real estate projects. Services are offered through an extensive network of offices located in major metropolitan areas throughout the U.S. For more information, visit www.metrostudy.com.

Texas Cities Dominate the Top 15 Metro Areas ranked by Population Growth from 2000 to 2010. http://bit.ly/nTG2RV

1. Houston – 1,231,393

2. Dallas/Fort Worth 1,210,229

11. Austin – 466,526

13. San Antonio 430,805

Metrostudy Austin Director Eldon Rude will present an update on the Austin economy and its housing market on July 27, 2011 at Austin Country Club.

This event is limited to subcribers to Metrostudy’s Quarterly Advisory Services in the Austin market.

For information contact Eldon Rude at erude@metrostudy.com