2016 Housing Forecast reveals truth about local market
Fundamental economics will keep housing prices up in 2016
Austin, Texas (January 13, 2016) More than 600 industry professionals attended the Home Builders Association (HBA) of Greater Austin and the Austin Board of Realtors’ 2016 Greater Austin Housing Forecast on Wednesday, January 13, at the JW Marriott. The annual event is the only comprehensive housing forecast of its kind in the region.
Housing and economic experts came together to present their analysis of the factors that are impacting the housing market, including the state of the regional labor market, buyer trends and expectations, population growth, and housing supply growth trends.
Brian Kelsey, principal, and founder of Civic Analytics pointed out that the employment forecast in Austin is 3.1 percent growth in 2016. With already low unemployment—3.3 percent regionally; 2.9 percent in Austin—continued economic growth in 2016 could lead to much-needed wage increases for local workers as the cost of living continues to go up. However, not everybody is participating in Austin’s historic economic boom these days: Black and Hispanic workers in Travis County are still earning far lower wages than White workers, a trend that contributes to the economic segregation that has made headlines in Austin. Brian further commented that traditional “big-city” tools for managing growth with significant investments in infrastructure will be difficult given the property tax burden facing many voters.
Malee Tobias, VP of research for Newland Communities discussed the impact of buyer trends and expectations on home sales. With Millenials making up the bulk of the market, the type and style of homes that are appealing to the average buyer have changed. The traditional life path has altered, jumbled and crisscrossed in ways that society has not experienced before; and real estate professionals and builders are experiencing this first hand. Changing life experiences like returning to parents’ homes after college, delaying marriage, delaying child birth, as well as changes in the overall make-up of family households are all factors contributing to new buyer trends. The challenge locally is matching buyer expectations with the realities of price. The average Millennial homebuyer (86 percent) expects to spend somewhere between $200,000 and $400,000 on their next home. While this price range is certainly attainable in the Greater Austin region, one may have trouble doing so while also including all of the features that more than 40 percent of these buyers say is a “must have” in their next home; including stone or granite countertops in the kitchen, master bedroom downstairs, energy-efficiency, large walk-in closets in the master bedroom, expanded great room and a dedicated home office.To conclude the event, once again
To conclude the event, once again Eldon Rude, a mainstay of Central Texas’ real estate community and principal of 360° Real Estate Analytics, gave us his projections for the local new home market in 2016. According to Rude, demand for new homes is not going to be a problem; the challenge for Austin’s home builders will be, “can they complete enough homes at attractive prices while at the same time offering products that appeal to a whole new wave of buyers that are not interested in owning the same home they grew up in?” says Rude.
Despite uncertainty regarding the impact of falling oil prices, Rude expects the region to weather the storm with a modest 3 percent increase in housing starts for 2016.