2nd quarter market update here folks! A very interesting half-year so far, one that had me delay this quarterly. I've been predicting strong appreciation this year based on expected strong job growth similar to 2006 (20,000 jobs+) and so far the job growth has been in line:

America’s hottest job growth markets

Sectors of job growth

However, unexpected events in the last 2 mths may reduce the expected appreciation that has historically come with this level of job growth. Recent subprime mortgage woes (loans for folks with less than A credit) which represents about 8% of the Austin buying market has taken some buyers out of the market. On average this has increased supply such that Austin has gone from being highly undersupplied to slightly undersupplied.

My belief is that this impact will be segmented and temporary due to strong job growth acting as a counter-balance, the fact that Austin has small percentage of subprime borrowers compared to national averages and finally the largest percentage of subprime loans are made in the below $175k price-point where there is not much inventory in Austin to begin with. I expect under $200k in suburbs and $600k-$900k in city to get hit the most. I believe up to $550k within 20-25 minutes to downtown will stay strongest in demand.

Wall Street Journal Article on Austin Jobs and Real Estate

Subprime Lending

Job Growth keeping Austin real estate healthy

Currently overall market supply is at 4.1 mths, up from 3 mths in July. This means demand is still outweighing supply keeping Austin a Seller's market and creating appreciation for now. Remember, 5-5.5 mths is a balanced market where supply and demand are equal. Central is still strongest at a 3 mth supply, I expect appreciation between 10-13% for 2007. We should see 7-9% one layer out like Arboretum area or William Cannon area and 5-6% in the suburbs such as Round Rock or Kyle.

Important recent rankings, emerging industries articles in regards to Austin's rankings and employment:

Austin ranked #1 for Business by Moody's and other rankings

Emerging Industries: Cleantech and Healthcare

Austin City Limits Festival – Ranked the #2 music festival last year. 3 days, 8 stages and over 130 bands showcasing indie and major acts in the ever-friendly Austin environment and backdrop. Those of you into music but may have overlooked ACL are missing one of the most well run and musically interesting festivals in the country.

The food court is a who's who of Austin restaurants keeping the flavor local and giving you an opportunity to discover your next Austin food outing. Parking and transportation are free if you'd like, we took advantage of that last year and found it surprisingly effective.
http://www.aclfest.com

• Buenos Aires Café If you're in the mood for trying something different you should stop in at this Argentian eatery. Little hard to find as it's located amongst the older commercial places just south of Oltorf and 1st. Online at: Buenos Aires
• Harbor Roofing Honest folks who will do a good quality repair or new roof. I've referred a lot of of folks to him and the consistent feedback is "fair, honest and did what he said he was going to do." With our unpredictable Texas seasons this is a good man to have on your side. (512)778-9090.
• Downtown There's a fanatastic show on Austin's own PBS station, KLRU, called Downtown. It's a look at the many sides of Austin, and the people who live, work, play and develop there. They feature 3 exciting new segments each week. Thursdays at 8:00 p.m. on KLRU, Austin PBS

• 10 things to do No matter what your political commitments are seems there is not much denying global warming and it’s impact. If everyone did just 1-2 of these, imagine the impact globally…..
• Austin toll road info Confused as I am on how the toll roads work? Here is your one-stop for all the roads, rates, etc.