Profitability of Texas Homes

Tierra Grande, a quarterly publication of the Real Estate Center at Texas A&M in its October edition had an article with the above title.  The article measured the profitability of Texas single family homes.  Guess what?  The Austin-Round Rock area had the highest average rent in the state.  Not surprisingly the area also had the highest average home prices in the state and even surpassed the national average.  Although the higher home prices in our area can eat away from the net rent yield which was calculated to be 2.43% it was still higher than the dividend yield for Home Depot and Lowes and just about a half a percent lower than McDonald’s.  What the article “didn’t” state is that when appreciation is added to the equation an Austin area real estate investment runs away from the pack.  The latest statistic from the Austin Board of REALTORS® stated that the average home price increased 5% from September 2014 to September 15.

It just makes good sense to own Austin area residential real estate.

Austin is the Place to Invest

In residential real estate that is. On October 6th I attended Realty Roundup and annual gathering of thousands of REALTORS® in the Austin area. Our keynote speaker was Dr. Jim Gaines a Texas economist from Texas A&M who spoke about the economy in general and the Austin area real estate market in particular.  I’m glad I attended (well I had to since I also had a workshop to conduct).  Here are Dr. Gain’s key points:

  • The Texas GDP is above that of the USA
  • Texas economic growth is 4.5% vs. 2.4% for the USA
  • The Austin population growth will slow as the high rates we’ve seen are unsustainable
  • He predicts the Austin job growth to be 2.5% in 2016
  • Austin has become and will remain an “Investor Destination”
  • Austin housing affordability (purchasing) will become will continue to tighten

Austin is #1 in Real Estate Development

According to a recent article in the Austin Business Journal, Austin is ranked number one for real estate development. It came in at number four for real estate investment. Studies were conducted by the Urban Land Institute and by PwC LLP. The article went on to state that the 2016 outlook for all property types is well above average but the areas of single family and retail stood out the most.

Just more reasons why it is a good idea to own residential real estate in the Austin area.

Robust Economy Sparking Austin Retail Interest

As reported in a recent ReCon publication, an on-line publication from the Texas Real Estate Center, Austin’s retail space is doing very well. The article stated that this is attributed to the overall robust economy and the net migration of folks to the area. With a 110 folks coming to Austin each day it is no wonder that retailers are having a good time of it – all these folks have to spend the wads of cash they are making. The article went on to state that retail building has stabilized and that an uptick in retail rents should be expected.

And so the happy “caching” of cash registers should be music to the ears of these retailers as it is for us investors in Austin Area real estate.

Austin Jobless Rate “Climbs” to 3.3%!

According to a recent article in the Austin American Statesman the Austin unemployment rate “rose” to 3.3% up from 3.2% in September. Now what city wouldn’t be envious of a 3.3% unemployment rate! I guess newspapers have sell print so that was the basic headline. Fact of the matter is that area employers actually have added 29,000 jobs since September 2014. That number would represent the population of a small city. To attract workers many employers are not only offering attractive wages but throwing in perks to snag the best qualified. How about working from home so new hires don’t have to clog our roads.