The Chamber's monthly Economic Indicators report on the Central Texas region chronicles economic activity on a monthly or quarterly basis. For this overview including links to downloadable data files please visit the Economic Indicators page within the Business section.
Central Texas Economy in Perspective
September 18, 2012 edition
Last week's release of a new issue of the Federal Reserve Bank of Dallas' quarterly Southwest Economy includes a detailed look at the full array of Texas housing market indicators, summed up in the article's title – "Texas Housing Market Finally Building a Solid Recovery." A notable milestone for Austin among the latest housing indicators is that, as of July, 2012 has already seen more housing units authorized by building permits than the total of housing units authorized in all of 2011.
Austin's home building activity has seen such an increase this year, that the average number of units authorized monthly is approaching 2007 levels according to permits data from the Census Bureau and the Real Estate Center at Texas A&M. An average of 1,593 permits have been issued each month of 2012. This is 96% of the 1,659 issued monthly in 2007. The first seven months of 2012 is 83% ahead of the same period last year. In contrast, 2011 permit activity advanced less than 17% over the total for 2010.For the time being, a notable difference between 2012 and 2007 is the distribution of activity between single-family and multifamily housing. Over 1,000 of the units authorized each month in 2007 were single-family, but in 2012 single-family has averaged only 688 units per month. Multifamily units make up 57% of all units permitted this year. In the last decade, the highest share taken by multifamily was 49% in 2001.
Nationally, permits are up 28.8% on a year-to-date basis. The national level of permit activity in 2012, approximately 64,900 each month, is ahead of the average of 50,300 seen over the preceding three years. Austin, on the other hand, appears to be more decisively climbing out of the trough, as the smoothed series graphed above illustrates. Texas is up, 40%, on a year-to-date basis.
Among the other major Texas metros, Dallas is up 40%, Fort Worth is up 39%, and Houston is up 37%, and San Antonio is up 39%. Austin's 83% growth is the 7th best among the 50 largest U.S. metros (San Jose, Denver, Charlotte, Miami, Oklahoma City, and Minneapolis saw greater increases).
Employment in residential construction in Austin peaked in 2007 at 16,087 and, based on the first quarter of 2012 (which is the latest presently reported), stands at 11,775, 73% of that level. With activity, based on units permitted monthly, being now 96% of 2007, the next quarter of employment data may be expected to show the employment gap closing. However, given the difference in the average value of a single-family unit ($175,478, YTD 2012) to that of a multifamily unit ($84,152), increasing the levels of single-family construction may be necessary for residential construction to replace all of the sector's lost jobs in Central Texas. The value of permits is up 67% over 2011 year-to-date. While activity as measured by units permitted is at 96% of 2007 levels, 2012 activity as measured by value is 83% of 2007.
The table above and the graph below look at a per capita view of permit activity and how Austin compares to other areas. Our 11,154 permits in 2012 translate to 625 per 100,000 population, which is the highest rate of per capita activity among the 50 largest U.S. metros. Austin's also had the highest rate among large metros in 2011.
Not only does Austin show a high level of activity on a per capita basis in 2012, Austin, which is the 34th largest metro, has the 5th highest number of units permitted of any metropolitan area. Even though multifamily accounts for much of the growth Austin is seeing, single-family activity is higher in Austin than almost anywhere else. For single-family units, Austin issued the 6th largest number of housing permits among all metros in 2012 (behind only the much larger Houston, Dallas-Fort Worth, Phoenix, and Washington markets).Spreadsheets of Austin and national time series data on permit activity is updated monthly in the Economic Indicators section of the Chamber's website. Other housing market indicators including MLS activity, prices and affordability are also available.
For questions about this data, please contact the Austin Chamber of Commerce, Research Department.