On June 21st the Austin Board of REALTORS hosted Dr. Jim Gaines, chief economist for the Texas A&M Real Estate Center, who made his economic forecast for next year and for the far future of Austin, the Austin area, and of Texas. You could almost call his presentation a pep rally for the Austin real estate industry. If you own Austin area real estate you should do very well according to the statistics cited. Follows is a short run down of his talk.
- In general, the 2019 economy will continue to grow.
- Since 2020 is an election year the economy cannot be predicted with any reasonable margin of error.
- Interest rates are likely to rise.
- He did point out that even at a 5% mortgage interest rate that the figure is much lower than in years gone by in the recent past.
- The Texas job growth for 2019 is predicted to grow by 2 – 2.5%.
- Since 2010 the Austin population growth has averaged 55,476 persons.
- By my math that is 4,623 persons per month.
- This averages to be 154 persons per day.
- From 2010 to 2050 (I won’t be around to see it) Austin will have grown by 262%.
- This will bring the population up to 3,460,651 souls.
- From 2010 to 2050 Williamson County will have grown 300%
- From 2010 to 2050 Hays County will have grown 400%.
- Traffic will not improve (duh).
- So far in 2018 Austin homes have appreciated and average of 6.5%.
- From 2008 to May 2018 Austin homes have appreciated an average of 6.5%.
- If you want to know where Austin is heading look at California.
So what does this mean for us investors holding Austin area real estate? It means that we are in a great place and at a great time. As the saying goes: “they aren’t making any more dirt”. And so it would seem that if the trend is to continue, and Dr. Gaines predicts that it will, that buying and holding an Austin area real estate investment is a great idea. And speaking of California, when I last check on the value of my first ever home in San Jose, California, it was valued at $1,300,000. Not bad for an original sales price of $48,500!
Rick Ebert / Austin, Texas / 28 June 18