Austin’s economic outlook overall reflects the Texas forecast: local employment and population growth outpacing the national economy. The Texas Workforce Commission predicts 3.1% job growth, while local economist Angelos Angelou predicts 2.3%. The unemployment rate for December 2007 was estimated at 3.6%, down from 5.1% in the Austin area during October 2006.
Austin’s population growth is driven by the high quality of life in the region, and various publications rank the area as the top destination for relocation of singles and families. Additionally, MSN recently ranked Austin as “America’s Greenest City,” continuing a “best of” series for the city. Located on the Interstate 35 Corridor, the city has grown in population as the third fastest in the United States this decade, with Ft. Worth first and San Antonio fourth, according to data from the U.S. Census Bureau. projects a population growth of 42,000 for 2008, down from a peak of about 60,000 experienced in 2006, according to the Austin-American Statesman.
Demand in the local real estate market is down compared to 2006, but remains positive, with generally more houses on the market. Angelou predicts that if local home builders react to negative national trends, Austin home construction will fall while the local market is still healthy and homes are still in demand, leading to a low inventory of new homes for sale. The result, he predicts, would be an increase in the demand for rental housing, such as apartments, and would cause a rise in rental prices.
Another indicator of the local real estate market is the amount of work that property inspectors are doing, as their work is often in demand when real estate changes hands. According to my survey of inspectors, most say that their number of inspections has fallen by more than 50% since September 2007. However, many said that the drop could be seasonal and that demand for their service should increase by May 2008.
Most of the job growth should come from Austin’s traditional strongholds, such as government, education, and healthcare. As the state capital and seat of Travis County, the federal, state and local government employs more than 150,000 workers, and this is expected to grow, according to the Texas A&M Real Estate Center. As an educational center, with the University of Texas and more than 20 other universities within a 30-mile radius, and several large public school districts, Austin will need more education workers. The “Live Music Capital of the World” continues to employ many in the entertainment and hospitality industry, with large healthcare employers like Seton and St. David’s expected to add workers.
With the high quality of life and population continuing to increase, Austin should see positive job growth through 2009.