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Forecast says housing may budge in 2011, and rush in 2012

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The third annual housing forecast was presented by the Home Builders Association of Greater Austin on Jan. 13. Speakers from the Austin Board of Realtors were optimistic that there would be a moderate and slow turnaround in the housing market in 2011. However for 2011 they are expecting a surge for home starts.

“For 2011, Metrostudy does expect the local market to show some improvement over last year, resulting in slightly more home starts in the area,” said Eldon Rude, Metrostudy’s director of the Austin market, in a press release.

“However, we do not anticipate a surge in new home production until 2012, when increased demand begins to result in increasing home prices.”

Employment is one factor that Rude said would contribute to the recovery. The U.S. Bureau of Economic Analysis ranked Austin No.1 in wage and salary jobs in 2009, for more recent years the data has not been released. Senior vice president in global technology strategies for the Greater Austin Chamber of Commerce Susan Davenport attended the conference. She showed statistics of Austin creating jobs in the high-tech industry, but she warned attendees, “Don’t rest your laurels with the accolades.” She said the chamber plans to bring in new businesses, which will create new jobs for Central Texas.

A part of the initative is to bring nonstop flights to the Austin-Bergstrom International Airport for international routes. The chamber says it would be a benefit to companies with international offices looking to relocate.

Although Austin is experiencing job growth, Eldon said one reason the housing industry has not experienced a substantial increase is because there are still many employees who are underemployed or were hired at a level lower than they had been performing prior to losing a previous job.

The national trends have also shown Austin to have fared well in the housing industry compared to other parts of the U.S. according to John Duca vice president and senior analyst at the Federal Reserve Bank of Dallas.

Duca said Texas was also smart to limit the amount of debt homeowners could borrow from home equity. Duca showed in his presentation that from 1999 to 2010 housing affordability has increased 56 percent to 74 percent, despite the increase in home prices.

Addressing recovery at the gathering on Jan. 13, Eldon listed three ingredients to recovery as: consumer confidence, job growth/rising incomes and home pricing pressure.

In 2010, less than 6,000 new homes were built in the Austin area, which leaves fewer homes available for purchase.

He said the slowing of construction and the increase in apartment occupancy and rental rates should help the housing industry in Austin.

“With increasing rent, renters will have to decide whether to keep paying rent or buy a home,” Eldon said.

However, he said he sees strong population and household growth, job growth in the private sector, pent-up demand and low home inventory levels as good signs for recovery in the Greater-Austin area.

“I think there’s reason for optimism this year and into 2012,” Eldon said.

More on this article can be found at: www.impactnews.com


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