If you follow this blog, you know that I keep preaching about how Austin is sheltered from other parts of the country, along with their booms and busts in real estate. Yes, it is a tough economy out there, but our local economy is still strong despite, or in spite of, economic news. It’s simple economics, really. Today, I will focus on how steady growth is one of the main ingredients of a healthy local economy like Austin’s.
From: http://ariaschoenfelt.com/statistics/austin_population_data/
The chart above, with data from The US Census Bureau, demonstraits the steady growth in Austin since 1990. The trend is similar to home sales volume because with more people, we sell more homes.
Many experts account our drop in 2007 to outside factors like fears induced by the media and the mini-boom we had around Austin’s McMansion Era of 2005 & 2006. What we experienced was a local mini-bust, but on a tiny scale. Few prices dropped, instead, sales slowed while the volume played catch-up with time.
Now take a look at charts from one of the markets that has a heavy influence on the media, like southern California.
Notice anything? I notice how home sales volume is extremely volitile in these markets as compared to Austin’s. Sure, there was money to be made in this real estate gold rush, but was it the tortoise or the hare that won the race?
Austin, like the tortoise, appreciates slowly and steadily. That’s why big-time investors that have long-ago learned the art of patience, buy Austin to hold. It’s a growth stock of real estate, it you will. Sure, it will fluctuate, but in general, it’s on the way up and in the long haul, holding on to your investment in Austin real estate can pay off big long-term. Markets on the coasts, like southern California, are the tech stocks. They demand more care and attention to the buy low, sell high and fast strategy. If you’re a casual investor, I would recommend a growth stock every time.
If you are looking to make money in Austin over a more short-term period, there are areas that appreciate more quickly. They take a careful eye and careful watching, and that is a topic for another day or to discuss one-on-one.
