Austin’s Economic forecast for 2016
Here’s a few key points for 2016’s projected forecast–And in sum: Austin is looking just as strong as 2015, with the threat of interest rates going up, even with the decline in oil prices. Oil doesn’t affect Austin as much as the rest of Texas and Houston, but more so gives consumers the thought of having more to spend with gas prices down.
“Overall the state of the Austin economy is growing and should continue to succeed as compared to the nation. With a careful eye on education, training, economic diversification and leadership, Austin can keep its momentum. Texas is a good place to do business. It’s a good place to call home. I still thank God that I get to call Texas home,” said Comptroller Hegar (who also spoke at the Economic Forecast.
2016 Prediction Notes from Economic Forecast:
*Loan Apps down 27% since TRID (TRID is the new lending guidelines that went into place Oct. 3 that now gives buyers a bit more protection)
*Job Growth huge in Austin and will continue (aka Austin 2nd Silicone Valley, companies keep moving here because it is so cheap)
*Consumers feel great about future (despite this being an election year)
*Last 12 months Texas job growth 1.53%
*Leisure and hospitality jobs up 4.5% (as predicted with hotel growth in Austin etc)
*35k more jobs in Austin last year
*Forecast for 2016 – home sales will be up 4.86% even with interest up. Savings on fuel cost and job growth are biggest indicators.
*2.4 months inventory currently which is less than 1/2
*Median household income in Austin rose 6.41% – which means good jobs
are being creating
*Consumers have less debt
*More commercial real estate than anytime…
*Expect interest rates around: 5.2-5.6% by the end of the year
*Low oil prices don’t hurt Austin because more people come for leisure
*Condo DT market – young town and income greater than US income average
*Corporate relocation in Austin – we are the 2nd Silicon Valley, but much cheaper than San Jose so more will be coming.
*Oil will not affect Austin
Here is Ted’s blog if you care to read more of what he has to say.
“Austin has hit an all-time record for home sales under the strictest lending conditions. Investors are borrowing money today at the cheapest rate of our time. This makes commercial investment a good deal.” In closing Dr. Jones encouraged attendees to watch unemployment.
“Austin does well when oil prices go down, but unemployment rises a little bit – and rises for unskilled labor,” said Jones.