For the last few years, the Texas housing market has been robust. But according to the chief economist for the Real Estate Center at Texas A&M University, it may likely to cool off some time this year. Thus, now is still a good time to buy or sell a home in this area.
2016 might not be another record year for the Lone Star state, but the housing demand is likely to remain strong. Home prices are expected continue to rise over the next year as well.
As stated by Dr. Jim Gaines, what made it especially attractive time to be a buyer is the low interest rates. However, the lack of choices posed the biggest challenge. Gaines added that they still have a shortage of the current inventory available for sale. With this, buyers may find it hard to find what they really want. Texas had a 3.1-month housing inventory last month, while the Center considers 6.5 months a balanced market.
It is recommended that you work very closely with an agent or someone who is knowledgeable regarding the market on a day-to-day basis. This is due to the fact that several of their markets properties are being grabbed up almost as soon as they are listed for sale. Usually, with multiple offers on the same day. This just means that once you already found a particular property that you like, act quickly as others may purchase as soon as possible.
Meanwhile, this is good news for sellers. As the demand increases, they will probably have no trouble getting the price they want. Such trend may continue at least for the first half of this year.
Housing inventory still remains very limited in Texas. The low housing inventory along with the rising property values makes housing affordability a challenge across the state. Housing inventory declined to a staggering 2.8 months, which is down 0.6 months compared to the first quarter of 2015. Such figure is also a historical low for housing inventory in Texas. The decreasing inventory indicates that the demand is slowly but surely pushing out supply. This could be a bigger problem if there’s no greater balance between supply and demand in the future.
As Gaines said, a slowdown in the housing market might happen this year, but the market will not freeze. Last month, the median price for a home in Texas was $201,900. As compared to the previous month, it increased by $8,200 and up by $9,900 from a year ago.
During the last four years, the housing market had a tremendous imbalance between the demand and the supply being offered for sale. It is expected that the demand will slow down, while the builders will keep supplying as they’ll think that there’s still a very good market for new homes. Then, people will decide that it is now a good time to buy or sell, before the interest rates will hike. As a result, the market will end up more balanced than it’s been.
Eventually, buyers may find that home prices will not rise as fast and there’ll maybe some bargains out there.