Housing market

Why Texas’ white-hot housing market might be cooling down – KERA News

Summary

It’s been a wild ride for home buyers in Texas over the past year – high demand and low supply caused skyrocketing prices in many of the state’s major cities. Its led to serious affordability issues in cities like Austin, which was already seeing housing costs creep upward before the pandemic.

But that white-hot market might at last be cooling down, says Luis Torres, research economist at Texas A&M University’s Real Estate Research …….

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It’s been a wild ride for home buyers in Texas over the past year – high demand and low supply caused skyrocketing prices in many of the state’s major cities. Its led to serious affordability issues in cities like Austin, which was already seeing housing costs creep upward before the pandemic.

But that white-hot market might at last be cooling down, says Luis Torres, research economist at Texas A&M University’s Real Estate Research Center.
Prices in some places have gotten so high that home buyers are waiting to purchase, causing houses to stay on the market a bit longer.

“I think the prices played an important role. That’s such a high level of increase in prices that some people were priced out of the market,” Torres said.

Listen to the interview above or read the transcript below.

This transcript has been edited lightly for clarity:

Texas Standard: Let’s begin by talking about the housing market over the past year or so. Can you put it in perspective? Just how unusual it was and some of the factors that contributed to it? 

Luis Torres: So definitely, it was a crazy housing market. We saw prices increasing. In the case of Austin: over 40% year-to-year. Dallas-Fort Worth: 20%. Inventories below one month of inventory, when normally in a housing market, six months of inventories is considered a normal market. Days on market: below 20 days on market.

And the factors at play were definitely the low mortgage rates and the pandemic increased the preferences [of] families or future homeowners to purchase their home because the pandemic allowed a lot of people to work from their house. So now they need a bigger house, where they can work from home comfortably, with an office.

Also, a lot of homeowners or potential homeowners weren’t affected by the pandemic. They worked in the industries where they could socially distance. Also definitely, the transfer payments by the government were a big help and also the student loan payments were temporarily stopped.

I can’t think of a time in which housing prices rose, just skyrocketed, like they did in Texas, except for perhaps California in the early 2000s. And I remember how that ended and it wasn’t good. It was the bubble and then the Great Recession of 2008. What are some indicators you’re seeing that the housing frenzy in Texas might be winding down now?

What we’ve seen is prices [have] reached a peak. They’re still high, but they’re actually coming down now. Also, months of inventory. They reached a trough and now they’re creeping up, slowly increasing. Also, listings. They reached the minimum and now they’re increasing. And also days on market. Like I mentioned earlier, there were some cases of like 15 to 19 days a market. That’s …….

Source: https://www.keranews.org/texas-news/2021-11-15/why-texas-white-hot-housing-market-might-be-cooling-down