Friday, January 9, 2009

November Numbers - More Job Growth in Texas - Again!

The number of jobs and households continue to increase in Texas. This is counter to all the other bad news around the country. As I said in my last post I do not expect this job growth to continue in Texas - -totally contrary to the economic hardship in other parts of country but for now the best place to have a job opportunity, or a rental property, is in Texas.

Statistics from the Bureau of Labor Statistics (http://www.bls.gov/news.release/pdf/metro.pdf) showed Texas added a net 33,400 more jobs from October 2008 to November 2008. 10,600 of these new jobs were in the DFW area and 3,200 of these jobs were in the Austin/Round Rock area.

The unemployment rate in Texas continues to increase which indicates people are moving into Texas even faster than new jobs are created and households are also increasing at a rate faster than new housing is being created.

Our Oklahoma and Louisiana markets are not moving in the same direction as Texas. If you read the report at the link above you will see that Tulsa, Oklahoma City, Baton Rouge and Lafayette have all had net job losses from October to November. The job loss has been small but the economic downturn is starting to affect these markets. Households/population in these markets continue to grow as people migrate from far more economically stressed areas of the US, but the jobs may not be as readily available as in Texas.

So what does this mean to Prime Properties and our clients?

The good news is that vacancy rates are down on rental homes in all of our markets! We see this positive trend even though vacancy rates are starting to increase in apartments. So apartments and single family rental markets are currently diverging. Right now you get more rental home for your dollar than you get apartment for your dollar so we see more people moving from apartments to single family homes, and these people are competing with 1) ex-homeowners displaced by foreclosures and 2) families relocating from other parts of the country but not ready to buy.

Please remember we deal with many micro-markets, so your specific home may not always be able to benefit from these favorable trends. We are using the current conditions to 1) increase rents where we have found our homes to be under-priced and 2) we are removing marginal tenants and replacing them with new tenants. Every landlord deserves to have a tenant who will follow their lease obligations, so we are using the current market to upgrade tenants. The higher vacancy rates in apartments means that the tenants we displace will have a place to go, one which will be more appropriate to their needs and means.

If you have any questions about the current macro or micro market trends and how it may impact you, please feel free to ask me, just send me an email at KMartin@PrimeProp.com. If I cannot answer your question I will put you in touch with the best person to provide you quality information.
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