Economy in Austin (Cleveland, Detroit: real estate, leases, employment)

[ButterflyUK]

How has Austin fared in the recession? Has it been hit hard or is it muddling through? General questions I know, but I am just starting to put the fillers out abotu Austin.

[inthecut]

It doesn't exist in a bubble, so yes, it has been affected.....

Real Estate has slowed markedly, and the ave price has actually dropped a bit.....

You will notice that most people will give you a variation of the following:

"Austin has slowed down, but is doing better than most metros"............

Now, what is THAT supposed to mean?....Is doing better than Detroit, Cleveland, Phoenix, So Cal, and the rest of the sunbelt a positive?.....That is like saying the entire room of people have taken ill, but some are doing better than others....always the invidious comparison with really hurting metros, which ends up saying essentially nothing...

The only proper way to answer the question is to compare todays Austin economy with the Austin economy of the last 5 years.......in that case, growth has slowed to a crawl...local GDP was expanding exponentially, and now it is just a tick over zero(growth).....Office vacancies, a leading indicator of future job loss, are growing..

Austin office vacancy rises to 21% in Q2 - Austin Business Journal:

Common sense says it is somewhat impossible to expect job growth when leases for commercial real estate are ebbing.........

Answer is, Austin's local economy is muddling through at best right now.....hiring freezes across the board for public sector employment, spending on public infrastructure markedly slowing down, and tech freezes just about everywhere....Austin has a large public employment sector for its size, and when it freezes up, the effect is felt in a big way......

Now, word is that inflation will spike up in latter 2010 and 2011, when the fed stimulus spending catches up with reality.......that will also have a large impact on financing available for Austin's business sector to get back on its feet, and for the local public sector, which needs to levy financing for schools, projects, and such.....

So, there is not one single city in the US "booming" right now.....Austin is not either, and at best is flatlining, or "holding its own", that you see in hundreds of articles about Austin's economy.......