The trend of growth and development was strong in 2015 and should continue in 2016, echoed speakers at the Jan. 21 Lake Travis Chamber of Commerce Economic Forecast held at Sonesta Bee Cave.
“We all know the [real estate] market is fantastic,” said Doug Land, Kuper Sotheby’s International Realty broker. “If you wonder why real estate is touted as such a driving force in the economy, think about this for a minute—$10.6 billion of [local] real estate changed hands in 2015. Historically, somewhere between 8 and 9 percent of that total value gets infused into our economy in some way, shape or form.”
Last year, the impact the area’s real estate transactions had on the local economy was $800 million, he said.
“That’s a pretty big cash infusion to our economy, and that’s what happened in Austin last year,” Land said.
Lake Travis sales in 2015 are up a little bit—at an increase of about 1 percent—from 2014, he said. Citing sales reported to national real estate website Multiple Listing Service, Land said the region had 1,450 home and condominium sales in 2015, with average home sales in 2015 priced at more than $500,000 in the Lake Travis area, up more than $20,000 from 2014.
“To my recollection, this is the largest number [of real estate sales] we’ve done in Lake Travis,” he said. “These numbers are going to continue in the same trend. There’s no reason to think that things are going to fall off.”
However, Land said the fourth quarter of 2016 may see a slowing in the number of residential and commercial real estate sales because of the presidential election, which typically shows these types of effects on the economy.
“The cost of construction is really not dropping off—mainly because of land costs,” he said. “Our land costs continue to go up and up and up, as well as the utilities. Trying to put the infrastructure in for a subdivision like Rough Hollow or Sweetwater or Rocky Creek is just astronomical.”
The U.S. economy is expected to grow between 2.5 and 3 percent in 2016, said Will Mitchell, owner of Mitchell & Associates Investment Consultants, citing LPL Financial.
Lakeway and Bee Cave
Three economic indicators—sales tax revenue, the number of residential and commercial building permits—point to a continued strong economy, Lakeway City Manager Steve Jones said.
“There’s still a lot of interest in businesses being in the Lakeway and Bee Cave area,” he said.
The commercial building Lakeway has seen for the past two years include substantially larger projects, such as Lexus of Lakeway and Lakeway Medical Village, Jones said.
Bee Cave’s sales tax earnings contribute to the city’s low property tax—$.02 per $100 valuation, Bee Cave Council Member Kara King said. Bee Cave collects a total of about $300,000 annually in property tax, she said.
Building and development in the city during 2015 generated $9 million in sales tax, King said.
“So far, the [tax] rolls that are committed are a little bit up from previous years, so we have a good, healthy forecast for 2016,” she said.
Lake Travis ISD
Lake Travis ISD enrollment has increased 57 percent in the past 10 years, Superintendent Brad Lancaster said.
“We’re growing every single year,” he said. “The state considers you to be fast-growth if you grow 2 percent in each of the last two years. We grow 5 to 7 percent a year—extremely fast growth compared to the state of Texas.”
Lancaster said about 80 fast-growth school districts exist in the state. These school districts account for about 80 percent of the growth in the Texas districts, he said.
LTISD has about 9,000 students and is expected to grow to 14,500 students in 10 years, Lancaster said.
“We expect our trends to continue,” he said. “With these growth estimates, we’re going to need more schools.”
Lancaster said a November 2017 bond election for the school district is a possibility and may include funding for two additional elementary schools as well as a third middle school.
