A number of indicators shows the Texas housing market frenzy is over, said Luis Torres, a research economist for the Texas Real Estate Research Center at Texas A&M University, in a Nov. 9 news release. Factors such as depressed mortgage rates, more people preferring to buy homes, lessening pandemic effects on homebuyers, federal government transfer payments and the continued suspension of student loan debt payments are keeping demand strong. Home sales are increasing as supply also increases.
There is enough supply for homebuyers after more than a year of buyers frantically buying houses in a market where housing prices are over 30% higher statewide than one year ago, according to data from the research center.
The new and pending house listings indicate the supply of homes for sale is continuing to grow, Torres told Community Impact Newspaper. Although the supply is beginning to meet the demand again, housing prices and supply will even out and increase at a more normal and healthy rate. It is highly unlikely the value of homes will depreciate back to prepandemic levels, he said.
“The strong activity within the housing market has reached a peak, so now the market is returning to a more normal level,” Torres said. “To give an example, imagine you’re driving at 120 miles per hour. You max out at this speed and then return to 70 or 80 miles per hour. You’re still driving fast, but you’re no longer at such a high speed.”
A major factor that influenced many individuals to seek out home ownership and shrunk supply so quickly was the pandemic, Torres said. Fewer people commuting to work and more people working from home meant many individuals sought out more spacious and comfortable living situations and moved from apartments to houses.
“Before people rented apartments because they had to be closer to their workplace,” Torres said. “Now people can live farther away in the suburbs.”
Now that home prices are stabilizing, homebuyers need to pay close attention to the market going forward, Austin real estate broker Eric Bramlett said.
“Since 2021 pricing has stabilized, the numbers to watch will be spring 2022 sold price numbers and appreciation, at which point we’ll have an indication of what [the] 'new normal' will be,” Bramlett said.
