After creating nearly 40,000 jobs in 2013, Austin’s job growth is downshifting a bit. But compared to Texas as a whole, the area is still doing very well. The area is showing strong job growth even though some Texas regions such as Houston are facing headwinds from falling energy prices. The metro area added more than 7,200 nonfarm payroll jobs, about 15 percent of Texas jobs, in the third quarter of 2015. As a result, the unemployment rate fell to 3.0 percent in September 2015. That is about half of what was prevailing in December 2011. We expect job growth to be around 3.0 percent for 2015 and 2016.
The Austin area real estate market is ranked among the top in U.S. metro areas. Home prices grew by 10.6 percent year-over-year in 2015Q2. According to the Austin Board of Realtors, median home prices rose eight percent year-over-year to $258,000 and single-family home sales skyrocketed by seven percent year-over-years to 2,603 in September 2015. As housing demand increased steeply, housing starts also grew. After four quarters of strong growth, single-family housing starts declined in 2015Q3 while multifamily housing starts grew by 5.7 percent year-over-year in the interval. We expect Austin’s housing market to remain tight in 2016 albeit with an easing home price appreciation rate.
The Austin area still remains one of the top tech and business friendly metro areas in the country. Small Business Trends recently ranked Austin as one of the top metro areas among seven most business startup-friendly areas for 2016 because of its collaborative and supportive environment. According to Spectrum Locations Solutions, Austin was among the top investment destinations in Texas for about 9,000 businesses that left the State of California in the past seven years. We expect Austin to continue to attract businesses from around the country as the economic and demographic fundamentals remain favorable.
Click here for the complete Austin Regional Economic Update: Austin 2015Q4.