Tag >> The Economy
by Shonda Novak Central Texas home sales rose 5 percent in January from a year ago, the Austin Board of Realtors reported Thursday. January's median sales price rose 1 percent to $179,250. Real estate agents sold 884 previously owned homes in January, compared with 840 the same month last year. There were 1,417 sales pending, a 7 percent increase from a year earlier. John Horton, chairman of the Board of Realtors, said January 2009 marked the low point of the current cycle. "With steady improvement throughout 2009 that continued in January 2010, we can see that we're one year into the recovery in Austin," Horton said. "What's most important about this is that it's the kind of recovery we want: one that is steady, stable and consistent." Throughout 2009, the volume of single-family home sales in Austin improved steadily, Horton said. In the first half of 2009, the gap in year-over-year sales narrowed consistently, reaching levels similar to those in 2008 during the summer peak, with the exception of a dip in August, Horton said. By fall, sales began outperforming 2008. They surged in October and November, spurred by the original deadline for the first-time homebuyer tax credit. In December, sales returned to a modest increase, rising 5 percent from December 2008, a growth rate that held last month. "We're already seeing positive signs in sales volume and price appreciation," Horton said. "Those factors, combined with the population growth and additional jobs economists expect for our area in 2010, bode well for the long-term value of Austin real estate." from Statesman.com
Posted by: gardnergroup in The Economy, Job Market on
Mar 15, 2010
In recent weeks business in Washington, D.C. ground to a halt as record snowfalls pummeled the area and a sparring match over national health care reform hijacked the political conversation. But the nation's capital is getting something right: It is emerging from the recession better than any other major city in the country, according to research by Forbes. Jobs in Washington are growing quickly, and in 2008 the city produced more in goods and services than almost anywhere in the country. D.C. and nine other cities (among them: Boston, Los Angeles and a host of metros in Texas) are best surviving the downturn in part because they specialize in industries that are relatively insulated from economic volatility. Federal and state jobs all but guarantee the health of a local economy, and nowhere is there more government-related work than in Washington. The city has one of the lowest unemployment rates in the country, at 6.2%, and its output amounts to $362.3 billion, more than three times the average for the country's largest cities. List: Cities Where The Recession Is Easing It also saw a more modest slide in home sale prices than many other metros in late 2009. Cities where the recession's effects are lessening either never felt the full brunt of the housing crisis, or have proven resilient enough that demand is returning sooner than elsewhere in the country. These strong housing markets further enrich the local economy by feeding a host of secondary industries, like construction, lending and household services. Uncle Sam as a Recession Shield
Government spending hasn't hurt Austin, Texas, either. It's the seat of state government and tied for No. 1 on our list of 10 cities best surviving the recession. Jobs have been lost nearly everywhere in the last three years, but between December 2007 and December 2009 the number of jobs in Austin rose by 0.98%; more than any of the other major cities we looked at. And by three years from now, jobs are expected to grow by 8.09%, the second-best job outlook on our list. Third on the list is Dallas, home to a thriving technology and energy sector, where jobs are projected to jump 7.19% in three years. From Forbes.com
Realtors' group sees ‘slow, sustainable growth' in sales activity NEW YORK - Better news from the U.S. housing industry sent stocks higher Tuesday, including an increase in the number of people with contracts to buy homes. The National Association of Realtors, a trade group, said its index of sale contracts rose 1 percent in December. It was the ninth improvement over the past 10 months as buyers scrambled to take advantage of a first-time homebuyer tax credit before it was set to expire last November. "It's a slow, sustainable growth," said Daniel Penrod, senior industry analyst for the California Credit Union League. "Most people would prefer a quick rebound but that's not likely to happen." The home sales report was the latest bit of encouraging news on the economy. Stocks rose on Monday after a surprisingly strong reading on the manufacturing sector, and on Friday the government reported that the U.S. economy grew at an annual rate of 5.7 percent in the final three months of 2009, a faster pace than expected. Homebuilder stocks rose sharply after D.R. Horton Inc. posted its first profit since 2007 during its fiscal first quarter. Much of its $192 million profit during the October-December period came from a tax gain, but its revenue rose because of a 36 percent jump in home sales. Orders increased 45 percent. The reports brought a positive tone to the market, which stumbled in late January as concerns arose that the recovery might be stalling and that the market's 10-month advance was running out of gas. The Standard & Poor's 500 index fell 3.7 percent in January, its worst month since hitting a 12-year low nearly a year ago. According to preliminary calculations, the Dow rose 111.32, or 1.09 percent, to 10,296.85. The S&P 500 index rose 14.13, or 1.30 percent, to 1,103.32, while Nasdaq composite index advanced 18.86, or 0.87 percent, to 2,190.06. Bond prices inched higher. The yield on the benchmark 10-year Treasury note, which moves opposite its price, dipped to 3.64 percent from 3.66 percent late Monday. Click here for the rest of the article. Story by Associated Press
According to a January article from Realty Times, investors are once again gaining confidence in real estate as a solid investment. Low interest rates, low home prices, and a wealth of properties on the market are all contributors to this trend. To read the entire article, click here.
Austin-area home resales jumped 58 percent last month from November 2008 as buyers scrambled to take advantage of low mortgage interest rates and a tax credit for first-time buyers. But local experts don't expect those big percentage gains to continue. Sales could slow next year, they said, anticipating rising mortgage interest rates and the end of the tax credit, which Congress recently extended through April and expanded to additional buyers. November's percentage increase was the biggest in more than a decade and followed a 38 percent jump in October, according to the Austin Board of Realtors. However, the 997 sales in November 2008 were unusually low, reflecting the worsening economic downturn at the time. Last month, 1,576 homes were sold, the board said. The median price was $179,900, down 2 percent from a year ago. "The numbers are certainly welcome news," said David Reed, a senior loan officer with Austin-based Land Mortgage. "Fifty-eight percent is huge, even if you factor in the extra selling days in November compared to last year." With the median price holding relatively steady, "it's even better news still," Reed said. But the market isn't in the clear yet. More challenges are ahead because of "minimal prospects for short term improvement in the local economy and our job market," said Eldon Rude, local director for Metrostudy, a housing research firm. He said he doesn't expect the market to show strong growth "until the employment picture brightens and consumer confidence strengthens." Rude said the sharp increase in November resales "was definitely tied to the availability of the tax credit but was also related to the significant slowdown in sales activity late last year as the U.S. recession took hold." With the extension, first-time buyers may still qualify for up to $8,000, but other buyers can get up to $6,500. Buyers must have a house under contract by the end of April and close on the sale by the end of June. Year-over-year sales were up 31 percent in the Dallas area, also one of the biggest increases on record; 32.8 percent in Houston; and 52 percent in San Antonio. Reed said he thinks the tax credit alone wasn't enough to spur the Austin area's November surge. He said that interest rates of less than 5 percent also were a factor, as was the specter of rising rates. Reed predicted that interest rates will move into the mid- to high 5 percent range by the end of next year's first quarter. Some real estate agents voiced optimism about 2010. "It just seems like the numbers are going steadily up, along with the economy," said Nell Hurtado, an agent with JB Goodwin Realtors. "People have a different attitude. They're more upbeat about the economy." Reed said he still foresees "a positive year for sales growth in 2010 - just nothing like a robust November we just had." From statesman.com snovak@statesman.com; 445-3856
Posted by: gardnergroup in The Economy on
Oct 15, 2009
FROM STAFF REPORTS Tuesday, September 22, 2009 BBVA Compass economists said that Texas has fared better than most other states in the recession and forecast a return to growth in 2010. The bank, which last month bought Austin-based Guaranty Bank, has made a string of U.S. acquisitions in recent years and now has operations across the Sunbelt, stretching from Florida to California. Nathaniel Karp, BBVA Compass' chief economist, said the Sunbelt will see a quicker recovery than other parts of the country, partly because the region's housing market has begun to stabilize. However, he and other economists said in a report that the troubled commercial real estate markets could hinder the recovery. Some highlights from their report: - Texas will see its gross domestic product rise 1.7 percent in 2010, compared with a loss of 0.4 percent in 2009.
- The state will start adding jobs next year, for a 1.2 percent gain, compared with a 2.3 percent loss in 2009.
- Home sales in Texas will increase 4.5 percent in 2010, compared with a drop of 12.4 percent in 2009.
DOWNTOWN Kirk Gallery closing in 2nd Street District Jeff Kirk said he will close his downtown furniture store Oct. 18, just a year after Kirk Gallery opened in the Second Street District. Kirk said he had been unable to reach agreement with his landlord, AMLI Residential, on adjusting the terms of his lease. Last month, the City of Austin agreed to cut the rents of two other district tenants, Fit City Sports and Austin Java, whose owners said sales had been hurt by the recession and by construction of the W Austin Hotel and Residences. Both of those stores are in the City Hall building. AMLI Residential handles leasing for about 50 other stores and eateries in the district. Catherine DeStasio, AMLI's commercial marketing director, said she could not comment on details of the Kirk Gallery lease. But she said AMLI remains committed to working with Second Street District business owners facing economic challenges. Kirk, whose store sells vintage furniture and accessories, said he plans to open in another location eventually. from Statesman.com
Posted by: gardnergroup in The Economy, Job Market on
Sep 08, 2009
Entrepreneur magazine's August issue ranks Austin the tenth-best start-up city in America. The magazine's look at new business-friendly cities addresses issues such as government incentives, population growth, affordability of commercial rents, and openness to new ideas. Entrepreneur calls Austin the "cross-pollinator" among the top 10 cities. The magazine cites the multiple "scenes" that shape Austin, from music to tech, and how they feed off of one another. "Theoretically, people here are competing, but the opposite is happening," Bijoy Goswami, founder of Bootstrap Austin told Entrepreneur. "Part of that Texas ethos has percolated into the entrepreneur scene: People in Austin just treat each other well." The magazine also highlighted Sweet Leaf Tea Co-founder Clayton Christopher as an example of one of Austin's brightest business minds. "There's a cachet attached to Austin," Christopher said. "It's the live-music capital of the world; it has good Texas values. Having Austin on our bottles has been a huge benefit." The top ten cities in order are Las Vegas, Portland, Ore., Orlando, Fla., San Diego, Phoenix, Chapel Hill, N.C., Atlanta, Madison, Wis., Youngstown, Ohio, and Austin, Texas. From Austin Business Journal
By Alan Zibel, Alex Veiga
ASSOCIATED PRESS
Tuesday, July 28, 2009 WASHINGTON - New home sales rose last month at the fastest clip in more than eight years as buyers eagerly took advantage of bargain prices - a clear sign, economists said, that the real estate market may finally be bouncing back. Historically low interest rates and a federal tax credit for first-time homeowners also helped push home sales to their highest level since November, the Commerce Department reported Monday. While home prices are still falling around the country, sales have now risen for three months in a row. Construction of homes is at the busiest level since last fall. And home resales rose in June for the third straight month. "The worst of the housing recession is now behind us," said David Resler, chief economist at Nomura Securities. But as with the overall economy, he said the recovery is likely to be slow and arduous. Put in perspective, the improvement in sales is modest. The pace of sales for new homes in June was still 72 percent below the peak of four summers ago, and an enormous inventory of homes is still on the market. "There's been signs of improvement, but we're a long ways off from being back to a normal market," said Corey Barton, president of CBH Homes in Meridian, Idaho. Sales there were up in June, but Barton said, "It wasn't our biggest jump in eight years." But there were clear signs the housing market is showing more life than at any point since the recession began. Keystone Custom Homes of Lancaster, Pa., which was founded in 1992, had its best June ever. July looks good, and president Larry Wisdom expects an even stronger August. "We doubled our sales in May, and then in June it took off," he said. New home sales for June came in at a seasonally adjusted annual rate of 384,000, blowing past the expectations of economists surveyed by Thomson Reuters, who were looking for 360,000. The figure is up 11 percent from May, and May's number of 346,000 was higher than previously thought. The increase is the largest since December 2000, when investors scarred by the tech-stock bubble were looking for more stable places to put their money. Sales were strongest in the Midwest, where they jumped 43 percent from May. Sales climbed 29 percent in the Northeast and 23 percent in the West. They declined slightly in the South. The median sales price was $206,200, down from $234,300 a year and $219,000 in May. Economists expect home prices to fall until the competition from low-priced foreclosures ebbs sometime next year. To drum up sales, CBH Homes has slashed prices up to 10 percent from last year's levels. The homes CBH builds have to compete with the glut of foreclosures, which are drawing many first-time homebuyers. In addition to lower prices, buyers are rushing to take advantage of a federal tax credit that covers 10 percent of the home price or up to $8,000 for first-time buyers. The closing must occur by Dec. 1 for buyers to take advantage. "There's definitely more first-time homebuyers in the market than what we've seen in the last several years," Barton said. Fallout from the housing crisis played a central role in the U.S. recession, the longest since World War II. Mortgages went bad, homebuilders pulled back and fired thousands of workers, foreclosures spiked, and lenders were shuttered by the dozen. Although the real estate market appears to be starting a recovery, that doesn't mean it will instantly become an economic engine. Construction is weak because builders have too many unsold homes. At the current pace, the new homes for sale would last nearly nine months. That's slightly less time than in May but still much longer than the six-month mark that indicates a balanced market. Austin upbeat, too Austin's market for new homes is showing its own signs of a rebound. New-home starts in the second quarter were 53 percent higher than in the first quarter. Because builders have pulled back in the past year, there is only a three-month supply of new homes on the market. The shortage of new homes has led to a pickup in the resale market, which had its best month in a year in June. From http://www.statesman.com/search/content/news/stories/nation/2009/07/28/0728econ.html
Posted by: gardnergroup in The Economy, Job Market on
Jul 22, 2009
Forbes named the Austin metro as the best poised for recovery in its list of the 10 U.S. cities poised for a rebound (and the 10 cities with a long slog ahead). Many Texas cities are poised for swift recovery according to Forbes. Texas' economy is diverse, with heavy growth coming from education and health care in recent years and did not see the massive real estate bubble that formed in states like California, Nevada and Florida. Forbes' analysis also shows the importance of a city's economic make-up. Cities with robust technology sectors are poised for stronger recoveries than manufacturing or finance centers. Austin's diverse economy, home to Dell, the University of Texas and the Texas state government, has kept the economy strong. Forbes examined estimates from data provider Moody's Economy.com of the projected gross domestic product of metropolitan areas across the U.S., as well as unemployment figures from the Bureau of Labor Statistics and home prices, incomes and affordability data from the National Association of Home Builders. ( Forbes, 6/10/09)
AMERICAN-STATESMAN STAFF
Thursday, June 04, 2009 The Austin area had the nation's strongest job market among big cities last month, according to data released last Wednesday by the Bureau of Labor Statistics. Among the 38 metro areas with a work force of at least 750,000, only Austin gained jobs from April 2008 to April 2009, the bureau said. It was the third month in a row Austin had earned that distinction. Austin added 3,400 jobs in that period, a 0.4 percent gain that brought the regional job count to 781,400. In January, Austin, Houston and San Antonio were the only large metro areas that had more jobs than a year earlier. But Houston and San Antonio have been losing jobs since then. Austin's job picture isn't all rosy: The area has been losing manufacturing and construction jobs at an accelerating pace, but those losses are being offset by gains in government, retailing and services fields. Central Texas is holding up better in the recession than other technology hubs. In April, the Silicon Valley area lost jobs at a 4.4 percent annual rate. Portland, Ore., was down 4.7 percent, Seattle was down 3.4 percent, and Raleigh, N.C., was down 3.3 percent. Some smaller cities also racked up gains, including Midland, up 2.2 percent, and Odessa, up 2.9 percent.
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