As Austin real estate continues to set annual records, homeowners are building wealth simply by living in their home. While this is great for Austin area residents, the strengthening local market is building the most wealth for Austin investors who benefit from investing in Austin area homes. If you’re considering becoming an Austin investor for the first time or if you’re a veteran investor who is uncertain about the future of Austin real estate, you’ll want to know that the outlook for Austin real estate in 2018 is one of the strongest in the nation.
According to an annual assessment of U.S. housing markets by international financial services provider, PricewaterhouseCoopers (PwC) and the Urban Land Institute (ULI), Austin has the second-strongest real estate outlook of 78 major real estate markets in the U.S. The report is considered one of the most highly regarded forecast reports for the real estate and land use industry. Ranking in the top 10 of the list is an indicator of strong economic and population growth for any city that makes the ranking. Austin real estate has ranked in the top 10 markets with the best annual outlook for the past 9 consecutive years. The Austin real estate market outlook is a great reason why would-be Austin investors should get into the market sooner rather than later.
Austin area employment statistics
According to data from the Texas Workforce Commission (TWC) and the U.S. Bureau of Labor Statistics (BLS), Austin saw healthy job growth in 2017 and the trend is expected to continue this year. Ray Perryman, CEO of the economic and financial analysis firm the Perryman Group, told the Austin-American Statesman he expects the area to add about 30,000 jobs in the next year, about the same as in 2017. A 1.9% wage increase put more money into employees pockets and subsequently made the Texas capital more attractive to out-of-town workers.
Here are additional economic statistics from the latest jobs report:
- Austin added 30,000 net new jobs, a growth of 2.9%, in the 12 months ending in December, making Austin the sixth fastest-growing major metro at the time.
- Wholesale trade was the fastest growing industry in the Austin MSA, increasing jobs by 9.5% (4,700 jobs) over the last 12 months. Leisure and hospitality added the most jobs—6,500 (5.3% growth).
- Manufacturing jobs grew 3.6% year-over-year, outpacing private industry growth for the ninth month in a row.
- Austin’s seasonally adjusted unemployment rate is 2.8% in December 2017, which is considerably lower than the 4.1% U.S. unemployment rate at the time.
Projected Population Growth
PwC and ULI reported that the Austin population is expected to grow by 2.8% in 2018. That’s well above the U.S. average. Additionally, Austin expects to add 42,000 residents per year over the next five years. All those newcomers will need somewhere to live.
Considering the Austin area housing market has been plagued by critically-low real estate inventory, you can expect that home values will maintain healthy growth. As demand for housing and home values increase, the Austin real estate market will be likely to provide strong returns on real estate investments. However, one key aspect of becoming a successful Austin investor is to get into the real estate investment market as early as possible in order to start building equity sooner rather than later.
Some reasons the Austin area will be a desirable place to live include:
- Nearly one-third of the population is between the ages of 15 – 34 and this group is projected to grow by 20.3% through 2022
- One of the top-ranked Green cities
- Solid ranking for outdoor activities
- Vibrant culinary scene where
- One micro-brewery per 38,000 residents
Austin Area Real Estate Sales Prices are Increasing
Home sales prices in the Austin area are increasing and are not expected to come down anytime soon. The main reason sales prices are expected to continue to grow is the aforementioned population growth. Builders and developers simply can’t keep up with current demand, which has been the main contributing factor in the average sales price of single-family homes hitting an all-time high for 9 consecutive years.
This year, home price growth is expected to be just as strong as price growth in 2017. One major indicator is the January 2018 market statistics. David Brodsky, broker/owner of the boutique real estate firm, David Brodsky Properties. “Our brokerage has seen two very strong months in January 2017 and 2018. Last year was a great year for real estate and market growth was bolstered by a strong start. This year, we may be able to see similar real estate growth due to an even stronger January market report and continued good local economic indicators.”
Additional Austin area real estate statistics:
- The median sales price for single-family homes reached $290,000, which is a 4 percent increase year-over-year
- Single-family homes sold increased 9 percent to 1,655
- New real estate listings were down 8 percent to 2,316 new listings this January
- Active listings increased 4 percent to 4,876
- Pending sales increased 12 percent to 2,365
- Total dollar volume of home sales increased 11 percent to approximately $594 million
Develop Your Austin Investor Strategy
If you’re considering becoming an Austin investor in real estate, be sure to develop a sound investment strategy before making an investment. Reach out to an experienced Austin real estate strategist at David Brodsky Properties. You’ll be able to schedule a complimentary Austin investor consultation to help you identify the main points of your investment strategy. Our consultation is free, but the guidance you’ll receive will provide immense value to your investment game.
Read more about Austin real estate.