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Beau Fannon
  • Real Estate Agent
  • Austin, TX
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Austin Economic Review: January 2020

Beau Fannon
  • Real Estate Agent
  • Austin, TX
Posted Jan 31 2020, 13:33

What data do you review to gauge the Austin housing market? Do you only look at the ABOR housing stats or do you look at the broader economy?  Where do you think the Austin housing market is heading?

When I was in grad school, one of our tasks was to reengineer the NAICS system into something more economically useful. What we discovered was that the housing industry and oil industry were basically tied as the biggest contributors to GDP when ancillary industries were added. Healthcare was third.

The problem with economic indicators is they often lag behind by a couple of months. Two of my three indicators suffer from this issue. In order to compensate for this, I needed a near real time datapoint that reflects an aspect of our local housing market. So I built one. May I present for your review, the most recent data from the Dallas Federal Reserve- Austin Survey, the ABIA Activity Report, and my very own Austin U-Haul Index.

Fed Survey: Overall the November 2019 survey looks excellent! We’ve had 10 years of consecutive economic expansion. That expansion has slowed down recently but that’s probably due to constraints in the labor market. We need more people trained in our growing industries!

Austin Employment Growth November 2019

https://www.dallasfed.org/research/indicators/aus/2020/aus2001.aspx

ABIA Report: Airport activity is seasonal just like real estate. The October 2019 airport data looks really good except for one negative spot we’ll pay attention to in the future. Passenger totals were up year-over-year as were mail totals. Passenger totals increased 9.5% YOY and mail increased an astounding 46.5% YOY!

Cargo is where things get interesting. Domestic cargo leaving Austin was flat YOY but still very respectable. Domestic cargo arriving at ABIA jumped almost 8% YOY. So our manufacturing base here in town didn’t grow but everyone is using Amazon Prime more than ever!

International cargo ABIA is in a tailspin. It’s bad. Real bad. International cargo traffic dropped an astounding 80% YOY. Some of our real estate clients are really getting hurt by the international trade disagreements.

http://www.austintexas.gov/sites/default/files/images/Airport/news_releases/activity_reports_files/October_2019.pdf

Austin U-Haul Index: Texas is growing by about a 1,000 people per day. The Austin MSA is growing by about 105 people per day. Comparatively, California is only growing by about 381 people per day. But how can we track those moves quicker than the two-three month lag in the data above?

U-Haul uses their prices to help manage their inventory. Austin has a ton of U-Hauls in inventory so it’s very cheap to rent one here and take it almost anywhere else in the nation. Conversely, It’s very expensive to bring a U-Haul to Austin. I’ve collected the pricing data for trips between several cities and distilled that info down into the following index. Nashville is the only city where it costs more to take a U-Haul than to bring it here.

Over time, if we see these index values start to fall to zero, then we know the economy is shifting and we are in trouble. But right now, the Austin housing market looks great when viewed through the U-Haul index!