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Home prices are starting to level off after a year of exponentially skyrocketing prices. (Courtesy Compass RE Texas LLC)
Property prices and supply are starting to return to more stable levels after years of hectic property market climate with skyrocketing prices and low supply, experts said.
A number of indicators show the frenzy in the Texas real estate market is over, said Luis Torres, a research economist for the Texas Real Estate Research Center at Texas A&M University, in a Nov. 9 press release. Factors like low mortgage rates, more people preferring to buy their homes, the pandemic’s waning impact on homebuyers, federal government transfer payments, and the ongoing suspension of debt payments on student loans keep demand strong. Home sales are increasing as supply also increases.
After more than a year of desperate buyers buying houses in a market where house prices are over 30% higher nationwide than a year ago, there is plenty of choice for home buyers, according to the research center.
The new and pending home listings show that the supply of homes for sale continues to grow, Torres told Community Impact Newspaper. Although supply begins to meet demand again, house prices and supply will balance out and increase at a more normal and healthier pace. It is very unlikely that the value of houses will fall back to pre-pandemic levels, he said.
“The heavy activity in the housing market has peaked and the market is now returning to more normal levels,” said Torres. “For example, imagine that you are traveling at 120 miles per hour. You will maximize that speed and then return to 70 or 80 mph. You are still driving fast, but you are not that fast anymore. “
One major factor that caused many people to look for home ownership so quickly and to shrink the supply was the pandemic, Torres said. Fewer commuters to work and more home workers meant that many people were looking for more spacious and comfortable living conditions and moved from apartments to houses.
“Before people rented apartments because they needed to be closer to their workplaces,” said Torres. “Now people can live further afield in the suburbs.”
Now that house prices are stabilizing, future home buyers will need to watch the market closely, said Austin real estate agent Eric Bramlett.
“With prices stabilizing for 2021, sales and appreciation in spring 2022 will be the numbers to watch. At that point we have an indication of what” [the] will be the ‘new normal’, ”said Bramlett.
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https://communityimpact.com/austin/cedar-park-leander/housing-real-estate/2021/11/10/texas-housing-market-establishing-new-normal-after-pandemic-housing-frenzy/
