Higher job levels coupled with a growing business population driven to the area through government programs, coupled with legislation enacted to protect consumers is allowing Texas to recover from the real estate crash much better than many other areas of the U.S.
In Houston, the state’s largest metro area home prices had been de-escalating since the peak of the market in 2006. But there are signs the market is beginning to find a bottom as the inventory of homes listed for sale drops. Lower home prices coupled with record low mortgage rates are driving buyers back into the market if they can qualify for mortgage financing. Houston home prices are forecast to rise a modest average of 1.8% in 2012.
A stronger job market than in many other areas of the country has strengthened the Dallas housing market, with home sales that are growing, despite the weak national economy. The inventory of homes listed on the market has shrunk and is likely to near a balance in 2012. A balanced supply is a six month inventory of homes, condos and townhouses listed for sale.
Over the past two years Dallas has see-sawed back and fourth between nearly an eight month inventory and about six months. However, home prices remain fairly weak in the region as homeowners encounter tough mortgage lending standards, and tougher appraisal requirements. Dallas home prices are forecast to increase a slight 1.4% by year’s end.
In Waco, a bloated inventory of housing and tighter economy has hampered the market from recovering as much as elsewhere in the state. Sluggish home sales and high foreclosures have hurt the region, which will take much longer to recover than most of Texas. Waco home prices are forecast to decline modestly (2.3%) for the year.
In the panhandle, Lubbock is reeling from a tough economy, while Abilene is doing much better as a result of the oil boom.
The foreclosure crisis is also making more of an impact on Lubbock, which is forecast to see average home prices decline 1.7% in 2012. Abilene, however, is projected to see values climb a modest 1.4% for the year.
The demand for deeply discounted homes is keeping home values lower in most of San Antonio, where the foreclosure crisis has inflicted a lot of pain. Home values have bounced back-and-fourth over the last two years as the market tries to reach a balance. A pent-up supply of foreclosures that will be sold-off over the next couple of years should aid the marketplace. San Antonio is forecast to sustain average home losses of 1.7% in 2012.
Insulated by high-tech prosperity and an upwardly younger demographic, Austin had been one of those rare places in the real estate downturn that
hadn’t experienced much in terms of pricing fallout. But like most places in the U.S. Austin is now seeing its fair share of foreclosures, and unless banks cooperate with hurting homeowners the community is likely to see many more pressuring home prices over at least the next year. Austin home prices are forecast to remain relatively stable for the time being, averaging just 1.2% lower by year’s end.
In far western Texas in El Paso, a military base realignment program has driven housing demand higher, despite tougher mortgage lending requirements. But the region is besieged by other issues and suffers from enormous growing pains. The housing market should see an increase in sales in 2012 as the community tries to reach a balance, with home prices forecast to rise 3.2% during the year.