MARKET BREAKDOWN
HOT MARKETS 2018
3 AUSTIN, TEXAS
sional, scientific, and technical services firms, bolstered by the hospitality sector.
CSA: Greater Austin, Austin-Round Rock CSA Population: 2 million
CONCLUSION Given Dell, IBM, Apple, AT&T, Samsung, and National In- struments all have significant presence in Austin as well as a number of colleges, universities, and healthcare providers, the local economy is well-positioned to continue growing without creating a housing bubble and, thanks to that new develop- ment in Q3, concerns about overvaluation may be diminish- ing. Texas is an extremely investor-friendly state and offers more room than most when it comes to sheer square mileage in which a metro area might expand, making areas surround- ing the Austin metro potentially prime areas for market entry as well. However, be alert to shifts in investment trends since hot markets often change course quickly. While both retail sales and long-term buy-and-hold strategies are presently yielding good returns in Austin right now, new investors are most likely to reap rewards by identifying good sources of median-priced homes either to rent or sell to retail buyers after updating the properties to current market standards. Those market standards could represent a pitfall if you do not fully understand the cost-benefit relationship between sales price, time on market, and certain popular upgrades.
Unemployment: 2.6% (Texas Workforce Commission, November 2017)
NOTABLE FACTS • Austin is the capital city of Texas • In July 2017, Forbes named Austin the most overvalued city in the U.S. • In Q3 2017, Austin-area builders started 12.5 percent more new homes than the previous year, the highest num- ber of housing starts since Q3 2006. In the Austin-Round Rock metro area, new-home starts were up 19.1 percent in Q3 2017. • Median new-home price in the Austin metro area is just under $290,000, placing the new inventory in the price range for strongest demand. • Austin home prices have risen 63 percent since 2007 • Austin’s jobs market hinges on high-tech jobs at profes-
2 SEATTLE, WASHINGTON
cle, and many other tech companies that dominate the office space sector and create ongoing demand for single-family residential real estate for employees. • The population of the Puget Sound Region, which is comprised of the Seattle MSA and Olympia, Washington, is roughly two-thirds of the entire state’s population. CONCLUSION In Seattle, the real estate game is great – if you can get in. Craig Macken, CEO of Rainier Home Buyers and Seattle na- tive, reported his company is generally simply flipping prop- erties to other investors rather than renovating them. “We can only flip so many homes at once, so this strategy helps reduce our risk footprint,” he said. Macken added that Rainier has increased online, and direct mail marketing spends to find off-market deals. Investors hoping to take advantage of long- term returns by owning Airbnb properties or rental prop- erties will likely have the best chance at entry by obtaining off-market deals at a discount, then updating them.
CSA: Seattle-Tacoma-Bellevue, WA metropolitan statistical area (MSA) CSA Population: 3.8 million
Unemployment: 3.8% (BLS, October 2017)
NOTABLE FACTS • Seattle home prices have risen 80 percent in the past five years • Seattle had the biggest annual home-price gains in any re- gion for 12 straight months as of November 2017 • Luxury home prices are stabilizing, but less expensive homes are still skyrocketing in value • Seattle was the top market for Chinese real estate inves- tors in 2017 • Seattle is home to Amazon’s HQ1, Oculus VR, Airbnb, Ora-
50 | think realty magazine :: january 2018
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