In this week’s blog, I felt it more than appropriate to address this month’s million dollar real estate question, courtesy of Trulia: Is the Austin real estate market in a bubble?
Get ready for some stats and numbers people, because although this may not be my typical writing style, I feel it is pertinent to address this interesting claim against my fabulous city.
Earlier this month Trulia released an article placing Austin under their “Bubble Watch”, claiming that we have the most overvalued homes in the nation. Check it out here. If this were completely true, it would certainly be of concern for recent and current buyers. However, local economic experts have refuted this claim with data supported by Austin’s strong population and job growth and the most recent market statistics.
In the last 12 months, 31,400 jobs were added to the Austin metro area, according to the Texas Workforce Commission and the U.S. Bureau of Labor and Statistics. Austin leads Texas with the lowest unemployment rate at 4.2% while the national rate is at 5.7%. With industry giants like Facebook, Google, Apple Inc., Dell, IBM, Samsung, 3M, Dropbox and Whole Foods among many others either already here, or planning to come here, population and job growth are only projected to increase.
According to the Senior Vice President of Economic Development at the Austin Chamber of Commerce, Dave Porter, 307 companies moved into the Austin area in the last nine years, and this type of growth is only expected to increase and continue. In February, Forbes named Austin #2 when it comes to metro areas with the best job growth prospects over the next three years, and this growth will inevitably have a positive domino-type effect on the housing market.
This September we saw a 10% increase in home sales from September of 2013, setting a record for the month for highest recorded sales numbers. Check out the Austin Board of REALTORS’ info-graphic on the September 2014 stats here.
For the fourth year in a row, Austin topped Forbes’ annual list of the nation’s fastest growing cities. With an average number of 110 people moving into the Austin-area daily, the main problem we are facing in the current market is the lack of available inventory. Whereas the Real Estate Center at Texas A&M University balances the available housing inventory level at 6.5 months, September’s inventory level sunk to 2.8 months. Demand is high, but supply is low.
Bill Evans, the current President of the Austin Board of REALTORS commented, “Recent reports from a national real estate advertising company have claimed that the Austin-area housing market is overvalued, but local economic experts continue to point to our region’s strong economic and population growth as foundations of a healthy market and indicators that those claims are not true. The 110 people who the City of Austin says move to Austin every day need homes to live in, and the real issue at hand is whether those people can afford those homes.”
The proof is in the pudding people– the bottom line is that there is much more demand than supply in Austin, and as long as our population and job growth continue to meet projections, our “bubble” won’t be bursting any time soon.
So why would Trulia publish this info? My only speculation is that HEADLINES SELL! The entire nation has been talking about the hot Austin real estate market, so what better way to get people’s attention? Go pick on another city, Trulia!
As Evans mentioned, the real issue we’re facing is affordability, and I plan to address that next week! (Not before a few fun posts though :))
Happy living & loving my friends,