Friday, February 15, 2013
Thousands of new jobs mean more real estate deals for D-FW
If the North Texas real estate market takes off this year — and all signs are pointing toward that — you can thank employment growth.
It’s new jobs, more than anything else, that fuel big increases in real estate demand.
That only makes sense.
People with new or better jobs often seek better housing — a nicer apartment or a home.
And companies that are adding workers require additional office and industrial space.
Last year was the best for home sales and commercial building leasing in the Dallas-Fort Worth area since before the recession started.
No surprise, it was also the strongest year for employment gains in the area since 2007.
Looking at December job numbers, Dallas-Fort Worth employment was 79,200 jobs ahead of where it was in December 2011, according to the Bureau of Labor Statistics.
The D-FW area ranked fourth, behind New York, Houston and Los Angeles for total employment gains.
“Some were expecting more, but it’s still not too bad,” said James Gaines, research economist at the Real Estate Center at Texas A&M University.
And it’s been enough to light a fire under housing and commercial property demand.
“In the fourth quarter, D-FW not only surpassed the 3 million total employment level for the first time, we also eclipsed the previous high before the economic downturn set in December 2007,” said Ted Wilson, a housing analyst with Dallas-based Residential Strategies Inc.
“The recovering economy is manifesting in North Texas with solid job and population growth.
“The overhang of housing inventory, both in the form of vacant for-sale housing and unoccupied rental units, is largely gone.”
Wilson said that with the local population expected to rise by an average of 100,000 a year, home and apartment builders will have to scramble to keep up with rising demand.
“The job growth continues to promote in-migration to the D-FW area,” he said. “In November, the Texas State Data Center revised its population estimate for the 12-county area, showing we had grown to 6,615,013 by year end 2012.”
All those new D-FW residents need more houses and more apartments.
“This should mean expanding activity for builders and developers,” he said. Wilson’s data show the largest generator of jobs last year was the business and professional services sector — a primary occupant of office space.
North Texas job gains have a ways to go before return to the level we saw before the recession. Employment growth in the D-FW area totaled almost 92,000 as recently as ’06.
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