Texas is almost like a country in itself with 12 economic regions including: High Plains, West, Northwest, Metroplex, Upper East, Capital, Central, Southeast, Upper Rio Grande, Alamo, Gulf Coast and South.
Today I would like to take a look at what we Texans call “the Valley”, to look at our economy and job growth.
The much talked about border towns of Texas are growing, as is the opportunity for jobs. Texas’ South Region is comprised of the 28 counties covering the Gulf Cost and Mexico border and offers a “young, growing workforce”. According to the Texas Comptroller, “the South Region added more than 138,600 jobs from 2004 to 2014, led by Hidalgo County. Its 26 percent job growth accounted for 37 percent of the region’s net new jobs.”
Here is how South Texas ranked against Texas and the US on Job Growth.
Job growth 2004 – 2014
South Texas – 20.1%
Texas – 21.7%
U.S. – 5.5%
In the Texas Comptroller’s Regional Snapshot, they conclude that “The South Region is one of Texas’ fastest growing and most diverse. It overlies a portion of the Eagle Ford Shale that has helped fuel the state’s energy resurgence. It also serves as a hub for shipping, farming and manufacturing. Meanwhile, tourists flock to shoreline destinations such as Corpus Christi and South Padre Island.
The region offers a dynamic workforce. Both birth and graduation rates top state averages. It has also added jobs at a faster rate than Texas as a whole, though wages lag significantly behind the state average. Rapid growth, coupled with drought conditions, has strained the region’s water supplies.
Thriving cities, agriculture and mining helped drive Texas’ largest consumption increase over the past decade. In all, the region offers much promise. It will remain relatively young and culturally dynamic while supporting some of Texas’ key industries.”
Here is the rest of the story from the Comptroller.
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The Consumer Financial Protection Bureau (CFPB) took action last week against a major mortgage lender, Prospect Mortgage, LLC, for paying illegal kickbacks for mortgage referrals. In addition, two real estate brokers and a mortgage servicer were held responsible for taking the illegal kickbacks.
Under the terms of the action announced by the CFPB, “Prospect will pay a $3.5 million civil penalty for its illegal conduct, and the real estate brokers and servicer will pay a combined $495,000 in consumer relief, repayment of ill-gotten gains, and penalties.”
According to reports on this and to my knowledge, this is the first legal action against a real estate broker by the CFPB. In a press release issued by the CFPB on Tuesday, January 31st CFPB Director Richard Cordray states, “Today’s action sends a clear message that it is illegal to make or accept payments for mortgage referrals. We will hold both sides of these improper arrangements accountable for breaking the law, which skews the real estate market to the disadvantage of consumers and honest businesses.”
REALTOR Magazine reports, “The action involves marketing service agreements, an area of RESPA enforcement that the National Association of REALTORS® says generates confusion among real estate companies and others in the industry. The association says its analysts on staff will closely examine the facts of these cases and build on existing guidance for real estate professionals for how to best comply with RESPA.”
For more information on RESPA, visit the National Association of REALTORS’ RESPA resource page.
As more information unfolds, I will keep you updated. To receive Tandy on Real Estate news updates direct to your inbox, please subscribe.
Can you believe it is February already? 2017 is flying by already. February tends to be a seasonally slow month for real estate. As we hit February 1st, homebuyers should be on the lookout for home price bargains. Per ATTOM Data Solutions, February is the best month for homebuyers to buy a home at a discounted rate. ATTOM data solutions looked at more than 50 million single family and condo sales for the past 16 years to determine the numbers of sales, median sales prices, and calculated the discount/premium against the annualized sales price. In their findings, “Homes in February sold at a price per square foot that was 6.1% less than the rest of the year on average – the biggest discount of any month of the year.”
Check out the ATTOM infographic for the details on the best bargain months.
It is not a strange coincidence that the first four months of the year are also in the Top 4 list of the best month to purchase a home at a bargain. We in real estate know that real estate is seasonal. November – January are typically slow due to the holidays. As the new year rolls in sellers who have homes on the market tend to get a little impatient, which could be why home prices decrease. In the early part of the year the spring and summer frenzied selling seasons have not yet hit, but more people begin to list their homes making it a more competitive buyer’s market. Then comes the summer when buyers and sellers want to complete a move before school which helps drive peak activity and increase home prices.
Let’s bring on the real estate seasons.
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I have said before, 2017 is looking very hopeful – reports are predicting a slow and steady growth. We may not increase at a rate that we have in the past, but we are still on the rise. This is confirmed by the Federal Reserve Bank of Dallas and the Austin American Statesman. The Federal Reserve Bank of Dallas released their Regional Economic data for December 2016, and all major metro business cycles indexes increased, except for a small dip for Houston.
The Austin American Statesman reports that Texas is ready to shift into 2nd gear in 2017. According to AAS, Keith Phillips senior economist of Dallas Fed, reported that, “Texas employers should expand payrolls by 2 percent this year, about 242,000 jobs. While far lower than the state’s long-run average, which typically exceeds national job growth rates, the job gains in 2017 are expected to surpass the estimated 1.6 percent annual growth rate through November of last year.”
Phillips said, “Texas still fared better than most energy states. And the Interstate 35 corridor, particularly Dallas and Austin, remained an exception to the otherwise modest growth in Texas.”
Phillips went on to say, “job growth picked up in the second half of 2016 due to a stabilization of the energy sector,” he said. “With that positive momentum, the Texas economy enters 2017 poised to shift into ‘second gear.”
Hear first hand from Phillips on how our Texas economy will be “slightly better than last year”.
Mine Yucel, Dallas Fed’s director of research, supported this with, “Despite the sharp drop in oil prices that sent the energy industry into a tailspin over the past two years, Texas did not drop into a recession at any point. And the modest recovery in commodity prices has helped stem the bleeding of oilfield services jobs and helped buoy statewide manufacturing outlooks.”
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A new year is full of potential – the promise of what is to come. People make resolutions and promises to themselves on what they want to accomplish or how they will improve in the year to come. Curiosity has gotten me when it comes to the resolutions people make, especially as we enter into the post-New Year’s Day weeks where these promises to ourselves begin to become less of a priority.
According to Inc.com the Top 10 New Year’s Resolutions are:
Not too far off from what I was thinking: be healthier, kick an old habit, save money, advance your career… I don’t think there are any huge surprises on the list. Today I want to focus on one in particular – finding another job. If your resolution happens to be in line with #8, one of advancing your career or finding a new job then, this will come as good news to you. According to NerdWallet, Austin is the best city for job seekers.
Here are the Top 10 lists of cities for job seekers:
The report analyzed federal data for the 100 largest cities to see where there is the most potential coupled with affordability. Data included the U.S. Bureau of Labor Statistics, the increase in the working-age population from 2010-2015 with U.S. Census Bureau data, as well as census data for median earning and monthly rent in each city to factor in the cost of living.
Laura McMullen & Sreekar Jasthi at Nerd Wallet summarize the Top 10 list by saying job seekers should follow the young people, find fast growing hubs (like technology or healthcare), and head to the state capitals. And wherever you are, volunteer to grow your professional and friend network. They say to surround yourself by people who know and like you and want to help you. I could not agree with this more.
Two Texas cities made the list. Austin at #1 and Irving at #9. Austinites understand this, but for those looking to change up your career or job here is a breakdown for you on why Austin and the Dallas area could help you fulfill your new year’s resolution.
Unemployment in Austin was 3.2% in October 2016 and 3.6% in Irving. Texas unemployment held steady in December at 4.6% overall. And, according to Sterling’s Best Places, “the unemployment rate in Irving, Texas, is 3.60%, with job growth of 3.09%. Future job growth over the next ten years is predicted to be 42.59%.”
High quality jobs in technology
Bureau of Labor Statistics’ 2014-2024 employment projection says that technology is one of the fastest growing in terms of output. Austin is no stranger to technology, being the home of two major technology companies, Dell and IBM, with many other companies following suit, like Apple. Forbes argues that Austin is the most attractive tech hub attributing the draw to the “young, educated population, large VC presence and burgeoning restaurant and music scene”. Companies see the potential of Austin’s labor pool and are taking advantage of this to grow their tech advantages.
According to Christopher Calnan at the Austin Business Journal, “Texas ranks No. 2 in the nation for number of tech jobs, 585,614, second only to California. And, tech companies accounted for 6 percent of the Lone Star State’s private sector jobs, the report by Computing Technology Industry Association found.”
So, the jobs are here, and per CIO.com Austin salaries are 106% of the national average. Not too bad. For a detailed look at wages, here is snapshot of tech salaries by industry from the Austin American Statesman. In addition, the Salary Increase Forecast for U.S. Jobs projects a 3.3% increase in tech salaries from the 87K median salary as reported by the Economic Research Institute.
This is exciting news for our city.
Job growth in healthcare
On the healthcare side Will Anderson with the Austin Business Journal says that, “in the health care sector, the opening over the summer of the Dell Medical School is expected to accelerate the development of a business ecosystem that combines the city’s existing care centers with entrepreneurial startups and innovators in medicine.”
Irving attributes much of its growth to technology. According to the Irving Chamber of Commerce, “Irving was recently ranked number three for tech startups per capita in the United States by American Express through research conducted by SizeUp.com. In addition, the City of Irving is the first city in Texas and the second in the nation to earn the Malcom Baldrige Quality Award.”
The Irving Chamber of Commerce also notes that “five of Irving’s approximately 50 Fortune 500 companies have chosen Irving for their global headquarters: Celanese, Commercial Metals, ExxonMobil, Fluor and Kimberly-Clark. Irving is home to more of the DFW Metroplex’s largest private and public companies than any other city except Dallas, including Citi, Microsoft, Verizon, NEC Corporation, Allstate Insurance Company, Time Warner Cable, RIM (BlackBerry), Aviall, Michaels Stores, Pioneer Natural Resources, CEC Entertainment and TXU Energy.” These companies choosing Irving, TX as their home base no doubt makes it a hot bed for career opportunities for job seekers.
So, how about it, are you ready to make the move to one of our great Texas cities? The opportunity is definitely here.
And, of course, I would love to help you with Resolution #7. If you are trying to read more, please subscribe to my updates.
So, we know that Austin is the Silicon Hills of the South and leads the tech corridor in microchip development, tech startups and venture capital funding, outside of cities like San Francisco. I recently received the Patent Activity Report produced by Beverly Kerr, VP, Research at the Greater Austin Chamber of Commerce, and it became ever more evident to me why we are the incubator of tech development and why inventors, developers and top technology companies flock to our great city. The opportunity and the amazing talent pool is right here in our backyard.
Per the report:
These are some fantastic stats for our city and the future of tech development. According to Beverly, “patent activity is a primary indicator of Austin’s climate for innovation and is key to the region’s ability to sustain its competitive edge. Austin’s economic growth, exports, and job creation are uncommonly dependent on the concentration of high tech industries in our economy.”
Now, let’s get into the details and what this means for us.
The tech talent pool is right here
Patent growth is a direct result of the talented developers who work tirelessly to improve not only technology, but also processes and product design. We see this in Austin. According to Avalanche Consulting, Austin ranks #5 in the United States as The Most Talented U.S. Metros. We know we have a great workforce, but it is nice to have it confirmed.
In addition, according to the American Community Survey (ACS) 2015, the Census Bureau’s Population Estimates Program, the Austin MSA has a 89.2% educational attainment – this is the percent of the population that attended high school or higher. 69.5% of Austin’s population has attended some college, 42.6% has a Bachelor’s Degree or higher, and 14.8% have a Graduate Degree. Austin stands above other major metro markets, ranking 6th out of the 50 largest metros for percent of the population with at least a Bachelor’s Degree according to the Austin Chamber of Commerce.
Patent growth and its tie to jobs
Austin has the perfect environment for this talent. According to Innovate Austin, Austin has 46 tech incubators, accelerators, maker and co-worker spaces, and 5,485 high-tech companies, providing a hot bed of activity for our workforce.
It is noted in the Patent Activity that IBM is consistently the top patented company in Austin. The Austin location has in the past had the highest number of patents, beat out only by Yorktown Heights, IBM’s largest research lab. Recently there has been a decline by 52% in Austin IBM patents compared to New York, but Austin still ranks above the San Jose and other major U.S. lab locations.
Business leaders have witnessed companies’ success after success in Austin. Since 2000, IBM and Dell’s success have been drivers to bring other companies to Austin. In 2016, we have seen companies like Amazon, Google, Facebook, Apple and other giant California-based tech companies expanding in Austin or looking to setup shop. Companies moving to Austin will not only stimulate the economy, but also create jobs and, as a result, increase housing demands.
Technology trends in line with recent influx in patents
“Among the larger patent classes in Austin, ‘Semiconductor Device Manufacturing: Process’ has seen the greatest decline in patents issued,” said the Patent Activity Report. This is in line with what we are seeing with rumblings of semiconductor company declines and acquisitions.
The report continues, “a smaller but growing ‘life sciences’ grouping made up of what the U.S. Patent and Trademark Office (USPTO) calls ‘body treatment and care’ plus selected classes under ‘life and agricultural sciences and testing methods’ shows significant growth (210%) in Austin between 2001-2005 (211 patents) and 2011-2015 (443 patents).” This patent growth can be attributed to the over 200 life sciences companies now in the region fueling this growth in new products.
Virtual reality (VR) and artificial intelligence (AI) companies are on the rise in Austin. If you look at the Top 20 Hot Austin Startups to Watch in 2017, you will see that several VR and AI startups are in the rankings.
With our talent pool, technology prowess and entrepreneurial spirit, I am excited to see what new technology comes out of Austin. The proof is in the patents.
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A look back at 2016
2016 had its ups and downs that is for sure.
“The ultimate guide to what 2017 has in store for real estate”, “Notorious ROB’s 7 predictions for 2017: The boy bands edition”, Year in review: 10 major real estate tech trends that shaped 2016″, “Why more MLSs and associations will merge in 2017”, “Broker vs. bot and the winner is..”, and “Human satisfaction: can a bot fake it enough to get there” @ http://www.inman.com
According to the U.S. Census Bureau there is a new fastest growing state in America. This year North Dakota got outranked by Utah. Utah’s population went past the 3 million mark and increased 2% since last year.
See the Top 10 ranking below with Texas coming in at #10. Not too shabby.
But, as you know we in Texas aren’t always happy at coming in 10th place. See the following which shows that Texas had biggest gain when looking at gross numbers.
Check out the full story featured in MarketWatch here.
Was this surprising to you? Would love to get your feedback and hear about how your market is doing.
According to the Austin American Statesman, Austin’s economy in 2017 will still be strong, but will face some challenges. Here are a few highlights:
The Federal Reserve Bank of Dallas released its Austin Economic Indicators report January 5th. According to the report job growth continues to lead in Austin over Texas and the U.S. and unemployment is still down at a low 3.0 percent. Although growth has slowed from Austin-typical fast-paced growth, we still are looking forward to a strong 2017.
The Austin American Statesman covers the full story here.
Did you know that Texas has had job growth 17 out of the past 18 months? According to the Texas Workforce Commission 38,300 jobs were added to the Texas economy in September alone with a total of 206,800 jobs added in 2016. Texas had the largest job growth in September with California coming in second, having added 30,000 jobs.
Without a doubt Texas is growing, but what makes this growth so unique and promising for our great state is the fact that the growth is across a diverse set of industries. Leisure and entertainment had the largest employment gain in the month over month with Professional and Business Services and Construction also steadily adding jobs. The private sector also experienced continued growth with 31,600 jobs added in September. The combination of these industries growth will help to continue to build Texas’ dynamic workforce and build upon the state being a global economic leader to reckon with. Continue reading