2020 Economic Update 

Schuyler attended Foresight 20/20 on October 25th with Independence Title's Director of Information Capital, Mark Sprague. Here are his takeaways from Sprague's comments about the current snapshot of local and national real estate markets, plus forecasts for housing, demographics and interest rates. 

·       Mark Sprague: Austin is now a “Global City.” Texans are not the only ones investing in Austin now. It’s people all over the world. People seeking Austin are new to the city’s market.

·       MS: On a national basis, we will experience an economic slowdown in the near term. We need to help our clients to understand that Austin will not slowdown even though the rest of the US will.

o   Schuyler Williamson: I believe our real estate market will experience little to no change. Our inventory is far too low to experience any setback. We’ve experienced some price reductions recently, but that is not due to lack of demand. Today’s buyer is prepared to wait for the right property and price. When a property is in good condition and priced correctly, it sells immediately in Austin.

·       MS: We are the #5 most educated MSA in the US on a measure of bachelor’s degree or higher for ages 25 years and older. The cities ahead of us are: DC, San Jose, San Francisco, and Boston.

o   SW: We help relocating families move to Austin monthly, and they all are very educated people. In many cases, they have post graduate degrees. I expect our high-ranking status to hold or climb higher. Our city’s value proposition for top talent is too high to perform in any other way.

·       MS: Wages haven’t increased as fast as property values and inflation. This explains why Austinites believe we have an affordability issue. The data compared to other markets says otherwise. Austin is very affordable.

o   SW: I’ve listened to a handful of folks present on home prices recently. It’s split 50/50 between those who think prices will continue to rise versus those who think prices should start to slow down. No one that I’ve visited with thinks we will experience falling prices in the next couple of years.

·       MS: Fewer cities are getting all the economic growth in the nation. Most of the US is still struggling to move forward from the previous recession.

·       MS: There are 30% more Realtors compared to 5 years ago. Texas is the only state with growth in number of real estate agents.

o   SW: Austin’s market has influenced several people locally to try real estate as a career. However, like anything, 80% of the transactions are done by 20% of the agents. 

·       MS: It is cheaper to rent in Austin because of wage growth.

·       MS: The FED thinks the reported Austin jobs number has been undercounted for a year à the deficit is not counting tech-related contractors.

·       MS: Austin has 18 Million square feet of office space currently being built that is all pre-leased.

·       MS: Rates will never be this low again and the market will not be slowing down.

o   SW: No one has a crystal ball, but I tend to agree with Mark’s assessment of our mortgage rates and market. The market will not be slowing down anytime soon.

·       MS: The amount of inventory is Austin biggest housing market issue.

o   SW: I agree completely with Mark’s statement here. We are working with multiple buyers looking in specific neighborhoods who are feeling this constraint. We wait for homes to come to the market, act quickly to have a chance to win the property, and end up competing against the same buyers every time. The demand is very high compared to the number of properties that are available.

·       MS: If a listing in Austin is at median or better for price, then one should expect multiple offers.

o   SW: I would make one change to this statement: I’d say, if a listing in Austin is in good condition and is at median or better for price, then one should expect multiple offers. This is especially true for homes below $500K in most areas.

·       MS: His opinion is that $2M and above is a luxury property.

o   SW: I’d agree. Daily, we see more agents advertising they have buyers who are qualified for up to $1.2-$1.3M. I think luxury is moving a notch higher in our market.

·       MS: Austin needs at least 10 million more square feet of office space to reach a healthy vacancy rate.

·       MS: Austin doubles in population every 20 years.

·       MS: Houston and Dallas are overbuilt and that’s why their markets will experience a slowdown. Austin is underbuilt.

·       MS: Austin will have another 5 years of growth, at least.

·       MS: Downtown has 120K tech jobs; north of Domain has 85K (and growing) tech jobs.

·       MS: Army Futures Command is key for growth because of the $10 Billion per year available to invest.

·       MS: North of 183 is the best place to invest for appreciation.

o   SW: This is likely true. I agree there is a lot of opportunity north of 183. I wouldn’t shy away from north central and northwest Austin if your budget allows. I believe there is still plenty of growth available there.