People ask me all the time about the real estate market. Clients want to know how the market is trending. They want to know what’s a good investment. I get it. We all want to mitigate our risk and make smart decisions. What I don’t do is give financial or investment advice. I talk about scenarios that impact real estate markets. I tell clients to look at economic growth, industry trends, infrastructure, and even climate change. How do all those things affect housing?
What makes a housing market sustainable?
A big one is always jobs. A recent WSJ piece (table below) unpacked some of Moody’s analysis of data from the Labor Department. As they put it, “if you’re looking for the best job markets, head to the South.” Austin ranked number two behind Nashville with Jacksonville, Orlando, Las Vegas and New Orleans also in the mix. Southern metros were big beneficiaries of the tourism rebound. And Austin continues to be well-rounded enough to get a lift from other industries. Sure it’s still Silicon Hills, but semiconductors aren’t the only game in town. Besides tourism, sectors like Life Sciences, cleantech, advanced manufacturing and financial services are also solidly entrenched. If you put the regional pieces together there’s a good possibility that Austin and San Antonio become another DFW-like metroplex. Both cities are connecting quickly.
Staying with Austin (Central Texas in general) there’s other things buoying our region. Climate change is one. Austin is inland enough to be spared from the massive storms coming through the Gulf. As Houston and other coastal cities are hammered, where do people go? They go to bigger cities inland and nearby. Even Orlando, for example, gets a boost from being fifty or so miles inland from the coast. Climate tends to spark the most surprise from those don’t closely follow it but it’s a real dynamic and you’ll continue to see it wherever you are.
Next time you’re in a housing discussion, challenge yourself to connect the dots and see what’s driving housing growth. Real estate will always be hyper-local but there’s plenty to pay attention to besides that great front porch and new kitchen.
