Entries by Alexander Stross

www.bizjournals.com/austin

Thursday, January 31, 2008 - 2:32 PM CST
Austin economy spanks the competition
Austin Business Journal

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) and IBM (NYSE: IBM) as well as the University of Texas, which is producing ample engineering talent.

Other cities that ranked high on the list include Atlanta, Seattle, Orlando, Houston and San Jose, Calif. The Forbes article points out that all of those cities share several key characteristics with Austin: They are tech hubs in close proximity to universities with growing population bases.

Forbes used GMP forecasts provided by Moody's Economy.com.

The regions of the country with the fastest growing metro areas overall are the Southeast and West. Forbes credits the lower costs of living and doing business in those areas for their higher anticipated performance.

COLLEGE STATION (Real Estate Center) – According to recent figures from the Office of Federal Housing Enterprise Oversight, home prices in Texas increased 6.9 percent during first quarter 2007, well above the 4.3 percent national average.

“Despite the national slowdown, Texas is still strong,” said Dr. James Gaines, research economist with the Real Estate Center at Texas A&M University. “There’s no reason prices shouldn't continue to rise despite the increase in foreclosures and the slowdown in transactions, construction and new home starts.”

By comparison, home appreciation slowed to 1.2 percent in California and 3 percent in New York. Nevada price increases virtually disappeared at just .6 percent. Even rapidly growing Florida and Arizona reported value increases of 4.3 percent and 5.2 percent, respectively.

Within Texas, there is a wide variation in appreciation rates in the 25 metropolitan areas. Combined with low interest rates, strong job growth and limited supply on new housing in many markets, Gaines says some of the appreciation rates are astounding.

“Among the state’s large metro areas, Austin and San Antonio are seeing the strongest rate increases at more than 10 percent,” he said. “With low levels of inventory and building permits off by over 20 percent in each community, it’s easy to see why these two markets are humming.”

Meanwhile, the energy industry is fueling strong housing markets in some smaller metros. Home prices are up more than 21 percent in Midland and 16 percent in Odessa. Victoria prices are up 8.3 percent.

Gaines said some border communities are on fire as well, thanks to a surge in government hiring and business activity. Laredo is up 16.6 percent, while El Paso is up 11.2 percent.

While Texas seems to be bucking the national trends in home price appreciation, the Lone Star State shares the national phenomenon of increasing foreclosure rates.

“Texas is no longer making headlines as having the most foreclosures in the country,” Gaines said, “but rising foreclosures is still a source of concern for all industries related to the housing market.”

The Real Estate Center (recenter.tamu.edu) has been providing solutions through research for 35 years. Funded primarily by Texas real estate licensee fees, the Center was created by the state legislature to meet the needs of many audiences, including the real estate industry, instructors, researchers and the general public.

A unique situation in Texas

RAY SUAREZ: Mark Dotzour, how does Texas resemble what you just heard from Massachusetts and California? And how does it resemble the nationwide trends?

MARK DOTZOUR, Texas A&M University: Hello, Ray. It's good to visit with you. We down here in Texas we have a real, unique situation going on right now. We've got a combination of very strong job growth. It's basically double the national average. We've got home price appreciation that's going up at an increasing rate in many of our metropolitan areas.

And at the same time, we've got population growth. I noticed just last year we had 570,000 new people come into the state of Texas. And at the same time, the home builders have cut back on production, as well, like you've previously heard. And so we're in kind of an interesting position, where home builders are cutting back on their building, but inventory levels of homes for sale are quite low. And that's why we're seeing the good rates of price appreciation in many parts of Texas.

RAY SUAREZ: And let's finally stop in Michigan. Donald Grimes, how's the scene there?

DONALD GRIMES, University of Michigan: Well, you described the national housing market as grim. And if it's grim nationally, it's doubly grim in Michigan. The housing market in Michigan is in very, very bad shape and, unlike the rest of the states that you have talked to and mentioned, the problem in the housing market in Michigan stems from a very weak economy, a weak economy that has lost jobs in each of the last six years, and last year Michigan's population actually declined.

So the weak housing market results from a weak economy. It's not a cause of the weak economy. And in order for Michigan's housing market to recover, the local economy has to recover or at least stop falling.

Austin Business Journal - 2:22 PM CDT Wednesday, June 20, 2007

Austin area home sales posted their second month of increases in May.

Single-family home sales hit 2,679 last month, up 2 percent compared with May 2006 and a record for the month, according to the latest Multiple Listing Service Report from the Austin Board of Realtors.

The median price for single-family homes was $183,160 for the month, up 5 percent from a year earlier. Active listings are also on the rise, up 8 percent from last year to 8,821. Meanwhile, high demand has pushed the number of days homes sit on the market down 7 percent to just 55 days.

"This is an exciting time for the local real estate industry," says Charles Porter, chairman of ABoR. "While the national market is slowing down, Austin continues to experience steady growth. And a healthy housing market benefits the entire local economy."

Home prices appreciated more than 10 percent in the first quarter of the year, according to figures from the Office of Federal Housing Enterprise Oversight. That's more than double the national appreciation rate of about 4 percent. Across Texas, homes prices rose nearly 7 percent year-over-year.

Brittany and I are back to answer any and all of your questions.

Please visit my Flickr account to see a few of the shots we took on our road trip

http://www.flickr.com/photos/7650791@N08/