The housing market is a highly unpredictable one, and the pandemic has only added to its volatility. With mortgage demand hitting its lowest level in 25 years, some experts are predicting that certain regions may experience a drop in housing prices of up to 20%. But what does this mean for Texas?Real estate professionals believe that a healthy balance between buyers and sellers is achieved when there is a six-month home offer. This means that buyers would take six months to purchase all the homes on the market.
As the housing market cools down, this should provide some relief for tenants, according to Laila Assanie, senior business economist at the Federal Reserve Bank of Dallas. After a surge during the peak of the pandemic era, with bidding wars and huge price increases, it now appears that homes are staying on the market for longer. In some regional markets, such as Dallas, Austin, Texas and Boise, Idaho, builders may be forced to “aggressively” reduce prices in order to boost supply. Goldman's chief credit strategist, Lotfi Karoui, believes that domestic home prices are likely to avoid a correction next year, but expects 39% of metropolitan areas to experience price declines. Areas with low levels of new construction may not see a major correction in the price of housing either. In North Texas, homes are spending more time on the market and more than a third of homes for sale have experienced lower prices.
San Antonio, El Paso, Houston and the Dallas-Fort Worth metropolitan area have all seen double-digit growth in housing listings last month and a corresponding decrease in the number of homes sold. It is evident that the pandemic has had an effect on the housing market in Texas. While it is difficult to predict precisely how much prices will drop or how long it will take for them to recover, it is essential to be aware of the potential risks associated with buying or selling a home during this time. It is also important to remember that while some areas may experience a drop in prices, other areas may remain stable. It is best to consult with an expert before making any decisions.
