Texas Housing Market Trends for 2021
Many businesses were hit hard by the COVID-19 pandemic that started in 2020. But one sector that has not been affected as badly as the others is the housing market. Texas real estate has seen strong demand and has continued to be profitable, with home sales hitting a record high in the state and investment properties generating good returns.
In fact, the pandemic is one of the factors that has been contributing to the strong housing market. Social distancing mandates have made working from home the norm for many. And because there is no longer the need to travel to work every day, people don’t have to reside near their offices. Those who work exclusively from home can literally live anywhere they like. And now that many spend longer periods of time at home, there’s a growing desire for bigger homes with more space to set up an office to work in.
Shortage of inventory
Another effect of the pandemic is that homeowners have been hesitant to sell their houses because of financial uncertainties and the fear that they will not be able to find a new home in the same housing market. Because people do not want to put their houses on the market, inventory has fallen. This shortage trend can be seen across the United States and is predicted to extend into the coming years.
A seller’s market
The shortage of supply has created a strong seller’s market. With fewer options on the market, interested buyers have become less picky. What homes are available are selling quickly, with the average days on market (DOM) of a Texas home down to 42 days. With multiple buyers wanting to purchase, the offers are competitive and houses are selling above the asking price.
Higher home prices
The last several years have seen an influx of people migrating to Texas seeking a better quality of life and career opportunities. The population grew by a whopping 7.4 million people from the years 2000 to 2018. Even now, individuals with buying power are continuing to relocate here. The demand for housing has gone up, and with the shortage of inventory, prices have been rising. In fact, property values in the state have increased by 8.5 percent in the past year.
Low mortgage rates
Despite the prevailing outlook that the economy in the U.S. will improve this year as restrictions are lifted, mortgage rates are expected to remain at an all-time low this year. Low mortgage rates may continue to drive up the demand in the housing market.
Housing market forecast
The rising prices and low supply are affecting the affordability of buying a home. This could drive up the population of renters in Texas and increase the occupancy rates of rental properties.
Likewise, the Airbnb market is expected to continue to do well with high occupancy rates despite the pandemic. In fact, it is performing better in many Texas cities than long-term rentals.
Based on a number of factors, the Texas housing market looks like it will remain strong for the rest of the year. Some of these factors include a lower unemployment rate and sustainable economic growth.
Other trends in the U.S
The demand for single-family homes in the suburbs is expected to grow as people from bigger cities migrate out as they are able to work from anywhere. Jobs are also returning, giving workers more buying power.
Unfortunately, the rising prices of houses is just making the affordable housing crisis worse. Rents have also been going up and are likely to continue doing so.
As the country opens up to travel again, vacation rentals are becoming a preferred option over the usual hotels. This is evidenced by an increase in reservations for short-term rentals.
With the current situation of supply and demand, it looks unlikely that the housing market will crash anytime soon. Buyers can expect some tough competition for the rest of the year. They should go in ready to bid if they really want to get the house they want.
On the other hand, it is a great time for sellers to put their houses on the market. While the inventory is still low, they will have less competition and are more likely to receive multiple offers. Chances are good that they will be able to sell their home at a higher price.
If you are looking to sell your Texas home, now is the best time to put it on the market. The experienced team at Berkshire Hathaway HomeServices Caliber Realty can help you make the most of the current seller’s market. Contact them by calling now at 979.694.8844 or send an email to sales(at)bhhscaliber(dotted)com.