The Texas metros housing markets have certainly been booming over the last several years. But as I’ve said before, the concern is when is the slowdown? Is it imminent, in a couple of years, when?
Home sales across the U.S. have seen a slight drop for the fourth straight month in July of this year. This is in spite of a strong national and local economy after 9+ years, a thriving and understaffed labor market, a 17-year high on consumer confidence. All positive responses historically to seeing an improved housing market. Yet it has slowed.
Because of the crowd psychology of any market, this continues to cause many to question: is the Texas housing market slowing? If it’s happening elsewhere, it’s bound to be happening here, right?
Again the assurance is, regionally Texas metros continue strong appreciation and sales. Austin and San Antonio, over 4% sales growth annually over the last 12 months, Houston and Dallas a bit less. So we are talking about degrees of success. Price gains are still strong across the board. Rents continue to escalate annually and will as long as there is less than a four-month supply of apartments. in the pipeline. Job creation continues to be strong across most channels in all major Texas metros.
See below for residential sales price breakdowns YOY:
As you can see, the ability to deliver affordable housing under $300K is a challenge and will continue to be.
Rather than questioning this, I would suggest that with increasing costs of building, labor and development and higher lending rates, why wait? Every time rates go up 1% you lose 12% buying power. 90% of all builders are experiencing framing and finishing carpentry issues, and 85+% are experiencing plumbing shortages. Builders are seeing a 20+% annual labor and materials cost increase, which in turn increases values. The home/apartment you look at today will be gone tomorrow, and more expensive.
As always, we are here to assist you in your decision and will be glad to answer any questions or concerns you may have.