Austin Area adds 7,800 jobs in June

Wow!  According to an article in the Austin American Statesman, the metro area added 7,800 jobs in June of this year.  There are cities that don’t have that many inhabitants so I find the number quite impressive.  Texas in general and the Austin area in particular continue to have a robust economy.  Fueling this migration of jobs is the economic well-being of the state which touts no personal income tax, lots of room for expanding or starting a business, and a well-educated population in our major metro areas.  So you might say that Texas and the Austin area are “user friendly” when it comes to job growth.  Leading the charge in our area job growth in June was construction.  Not a surprise here as the businesses coming here have to have buildings in order to function.

Of the 7,800 new jobs, 1,200 were in construction which many consider to be the backbone of middle income wages.  Of course all this means that these wage earners have to spend their money somewhere and in turn this means that the service and hospitability sectors grow, which in turn creates more jobs for our area.  And so the economic wheel continues to churn for our area.  And all of this is good news for us investors or Austin area residential real estate.

Let the good times churn! 

Rick Ebert / Austin, Texas / 23 July 16

Austin is the Right Place!

Nationally apartment rents have risen 64% from 1960 to 2014 according to Apartment List.  They also state that income for the same period have risen only 19%.  Reportedly 37% of all households nationwide rent their domicile, the highest figure in decades and renters are struggling to pay rent.  Austin in contrast has a much different and a much better story.  In Austin almost 53% of the population is renters and it has been this way since I moved here in 1981.  Of course the numbers have fluctuated, but Austin has a high concentration of renters for decades.  Apartment List states that the average apartment rent is currently $1,092 and the average renter is making $4.262 a month.  In 1980 those figures were $761 and $30.227 respectfully.  So in Austin wages are keeping up with the increases in rent and this is good for us owners of local residential rentals.  According to Apartment List the reason for Austin’s success are strong employment growths, attractiveness of the city, and our good friends the millennials. One definition of a millennial is someone born from 1982 to the early 2,000’s.  The USA has a reported 83.1 million millennials in 2015. These folks like their freedom to move about and therefore a big contributing influence to the overall rental population and certainly within the Austin area.  I see them coming to Austin to take good high paying jobs and rent a house.  They are also renewing their leases more frequently than in the past.  In 1971 the typical renter was someone who just graduated from UT and didn’t want to leave and either rented an apartment, condo or a duplex – that has changed a lot.

So how is Austin stacking up to her sister cities?  Apartment List reports that Dallas has increased rents from $761 to $968 on the average since 1980 but the average wage for a Dallas renter actually decreased to $37,237 from $38.406 in 1980.  And Houston has fared even worse.  In 1980 the average rent was $807 and is currently averaging $940 a month.  The average wage for a Houston renter in 1980 was $42,225 and now is only $38.447.

Now is a great time to own Austin area residential rentals!

Rick Ebert / Austin, Texas / 12 July 16

Spring 2016 Realtor® Party magazine

In the spring 2016 Realtor® Party magazine there was an article stating that  the U.S. Census Bureau reports that rental housing accounts for “more” than 1/3 of the nation’s housing and that this trend has been strong during this last decade in part because of the number of folks that went to foreclosure and in part because of the recession.  Apparently a lot of would be homeowners also are spooked by the perceived risks of owning a home.  Another reason is that renting a home vs. owning a home gives one the mobility and financial flexibility they desire and also frees them from the maintenance responsibilities that with home ownership.

The article stated that in towns having a university that housing is often a premium and that demand is high making the conversion of single family homes into rentals is often an attractive investment.  Austin, San Marcus, and Georgetown are local examples of this claim.  On the flip side of the coin renting is often the only option for low income families.

Now that the recent recession is behind us renting has caused shortage of affordable housing nationwide and in the Austin area I must add.  This is good news if you own rent housing and not very good if you are a renter.  Putting pressure on the availability of affordable rent housing is the increasing number of short-term rentals that have been popping up nationwide.  These short-term rent houses obviously are not on the long-term rental market which adds to the shortage.

When you add to the equation that many would be first time homebuyers, folks in their mid-twenties – and mid-thirties are strapped with large student debt and find it tough to save for a down payment that moves upward with the increasing value of housing, it becomes apparent that there is a great need to provide them with a basic need:  a rent house.  And that is where you and I come into play.  As owners of residential real estate we are in a position to provide a well maintained rental that will bring us financial reward.

Rick Ebert/ Austin, Texas/ 8 July 16