Surveys Find Austin is in a Good Financial Position For the Future

According to the Austin Board of Realtors and the Home Builders Association of Greater Austin, the home market in Austin appears to be near stabilization. As such, experts are predicting that the home market may see a slight rebound this year.

One sign that the market is stabilizing is the fact that the job market has seen some recent improvement. Although the Texas Workforce Commission reports that the area lost approximately 4,300 during the year that ended with November 2009, the rate of job loss in the Austin area is still better when compared to many other cities. In Houston, for example, 88,900 jobs were lost while 50,700 were lost in Dallas.

Eldon Rude, who directed a residential real estate market study that compared Austin against 30 other metro areas in the United States, reported that Austin builders reduced their new home production by about 19% last year. Nonetheless, builders still broke ground on 6,490 new homes.

“Starts have established in recent quarters, builders have closed more homes than they have started for the last three years,” said Rude in an Austin Biz Journals dated Jan. 11th, “This strategy has resulted in far fewer inventory issues in the Austin in new home market compared to the more challenged markets across the U.S.”

According to the market study, new home starts are likely to stay at the same level in 2010 as they did in 2009. This is primarily due to the fact that jobs are expected to grow at a slow rate during the first half of the year.

Despite the positive news, there are many variables in the housing market that will have an impact on sales throughout the coming year. While home pricing and buying has shown improvement, long-term growth will be tested when interest rates start to go back up and when the tax credit program comes to an end.

In a separate study, the California-based real estate services and investment firm of Grubb & Ellis Co has determined that Austin has the best prospects in terms of commercial real estate investments. Although Grubb & Ellis Co expects to see the commercial real estate market continue to falter this year, it predicts the rate will fall at a slower pace and that most properties will likely bottom out by the end of 2010 with a slow recovery starting in 2011. When ranking those markets with the greatest investment potential, Austin came in the number one position.

“Because commercial real estate lags the labor market, it still has a ways to go before reaching its own low point,” said Bob Bach, who is the Grubb & Ellis senior vice president and chief economist, in a separate Biz Journals article dated Jan.4th, “The good news is that the freefall we saw in 2009 is over and the future is more certain, giving owners and users of real estate the confidence to begin making decisions again.”

Houston, which came in the number 6 position of the list of top 10 commercial markets, was the only other Texas city to be included on the list.

Ryan Lynch is part of the Austin real estate team. Their brokerage specializes in Central Austin Homes and neighborhoods such as Balcones Park in the Central Area.

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