It is easy to see why real estate investors love Texas. It definitely has something for everyone. From millennials flocking to the city for jobs and city life adventure to families wanting to put down roots in Texas’ quaint suburbs or retirees that simply want to enjoy warmer climate and better quality of life.
In Dallas alone, Median home prices in the city are predicted to grow by nearly 16% this year although the overall Texas housing sales fell 2.5 percent in April 2021 on top of a first quarter decline this year. The reasons for this are mainly because of rise of in-bound population, a thriving economy and above average population of millennials flocking to the cities.
Most of the slowdown in demand for housing may be attributed to reduced inventory for homes that are priced less than $300,000. increasing mortgage rates also affected affordability, particularly for first-time homebuyers. Then again, sales for homes priced more than $400,000 improved for the second straight month. Sales of residential properties also remained normal from fast-tracked activity last year.
According to Texas Real Estate Research Center, the monthly variations throughout Dallas’ price spectrum reflected the state’s, falling 10.3 percent year to date. In the meantime, housing sales in San Antonio and Fort Worth dropped significantly from 16.1 and 12.4 percent YTD, correspondingly, in spite of positive growth in the luxury-home sector. Sales of luxury-home properties on the other hand increased by a third comparative to year-end levels in Austin, although the overall metric still diminished 8.4 percent. Even though Houston sales weakened across all price partners in April, YTD activity reduced only 4.4 percent.
Because of the rising supply costs, new homes will probably not be priced at the lower end of the price range, where home availability is most limited. Continuing demand for housing during limited inventory at the bottom price supports pushed sales to higher-priced homes. Appreciation for double digit home price as well as the rising mortgage interest rates affected the housing affordability and may diminish housing demand to improve. The record low level of property availability for sale is the biggest challenge to Texas’ housing market, supposing the pandemic remains controlled and no more outbreaks will happen in the near future.
But with increased demand and limited availability of property inventory, apart from buyers who are willing to make offers well over listing prices, 2021 is one of economic recovery not only for Texas but for the entire country as well. Simply put, the real estate market trend for Texas is likely to continue to grow and expand in 2022 with a potential collapse not realistic in this red hot market.