TEXAS REAL ESTATE MARKET FACTS
GET THE REAL FACTS ABOUT THE
TEXAS REAL ESTATE MARKET
With so many misperceptions created by the national news about the real estate market, it is important that Texas consumers understand what’s really going on in the market. Remember, real estate is local. Here are some facts about Texas and the Lampasas area that will help alleviate your concerns.
Why Texas is different
Strong, diverse economy: Texas is strong in industries that are still growing (such as professional & business services, education & health services, government) and has the second largest economy in the nation by GDP according to the U.S. Bureau of Economic Analysis.
Healthy job market: Texas’ unemployment rate consistently remained well below the national average for all of 2008 and is currently the 16th lowest in the United States, despite having one of the largest populations.
Top state to relocate: According to Allied Van Lines’ 41st Annual Magnet States Report, Texas is the No. 1 destination state for residential relocations for the 4th year in a row. New data from the U.S. Census Bureau confirms that Texas gained more residents (484,000) between July 2007 and July 2008 than any other state.
Misperceptions created by national news
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What they hear … |
What they don’t hear … |
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Median sales prices are down as much as 40% |
That 40% number is from California (Jan. 2009 compared to Jan. 2008). Median sales price statewide is flat in Texas for the entire year 2008 compared to 2007*
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Average sales prices dropped $130,000 in one year |
That number is from Arizona (Actual number is $133,072 from Jan. 2008 to Jan. 2009). Average sales price in Texas is down $7,400 (from Feb. 2008 to Feb. 2009)*
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Home prices are the lowest in six years and it takes three quarters of a year to sell a house (Reuters, Jan. 2009) |
Over the last seven years, home prices in Texas have increased 10.2% in value (median home prices from Jan. 2002 to Jan. 2009) and in that time have averaged less than 7 months, sometimes much less, to sell.
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*Source: Real Estate Center at Texas A&M University
Statewide facts
· Texas real estate remains a strong long-term investment. The average sales price of a home in Texas increased $15,200 from January 2004 to January 2008. Over the same four-year period, the median sales price in Texas increased $10,900.
· Texas has a balanced market. At the end of 2008, Texas had 6.4 months of inventory of homes for sale. Economists at the Real Estate Center at Texas A&M University say that approximately 6½ months of inventory is a balanced market, when homes are selling and prices continue to increase at a moderate pace.
· Steady, positive price appreciation. Unlike states such as California, Florida, Nevada and Arizona that experienced dramatic spikes in home prices in years past, home prices in Texas have appreciated steadily. That’s one reason the state hasn’t seen the dramatic drops in value. In fact, home-price appreciation in Texas has not fallen below zero in the last 16 years.
· Texas homes are more affordable. According to the Real Estate Center at Texas A&M University, Texas homes are substantially more affordable than national averages. Using the correlation between home values and personal salaries, the typical Texas family can purchase a median-priced home for twice the median household income in Texas. In contrast, the typical U.S. household requires three times the annual household income to purchase a median-priced home.
· Lowest mortgage interest rates in history. As part of efforts to stimulate the U.S. housing market, the Federal Reserve has decreased interest rates to some of the lowest in history. According to Freddie Mac, on March 27, 2009, the rate on a 30-year fixed-rate mortgage was 4.85 percent, the lowest since the organization began tracking rates in 1971.
· First-time homebuyer incentives. Most first-time homebuyers can now qualify for an $8,000 income tax credit on the purchase of a first home that does not require repayment.
· Most borrowers are approved. Despite perceptions to the contrary, research by the National Association of REALTORS® indicates that 91 percent of buyers in Texas were not rejected by lenders in 2008.
Additional resources
· Real Estate Center at Texas A&M: www.recenter.tamu.edu
· TexasRealEstate.com (Inside the News): www.texasrealestate.com//web/3/31/
