When it comes to the future of the Texas real estate market, experts are looking at the global economy.
In an article (“2013 DFW real estate forecast: It’s going to be tough,” November, 2012) in the Dallas Business Journal, Asieh Monsour, head of the Americas research for global real estate firm CBRE, Inc., said when it comes to the immediate future of real estate in North Texas, “it’s going to be tough.”
According to the article, “the valuation of real estate is closely tied with the global economy, which has seen recent risk and volatility, Mansour said during a CBRE market forecast event at The Ritz-Carlton in Dallas. That volatility makes it difficult to make projections in U.S. real estate, she said.
“‘We are not out of the woods,’ said Mansour, referencing political uncertainty, a fiscal cliff and sub par economic growth in the United States. ‘Everyone has been sitting on the sidelines, so business spending is well below par and we feel it in the real estate market.’
“Next year will continue to be challenging for the national economy, but Texas markets are some of the fastest growing in the United States, Mansour said. (Still), it will likely take until 2014 before there will be any real gains in the economy and real estate market, she said.”
Others say Dallas is experiencing the best year in real estate it has in some time. An article published in December (“2013 housing forecast: More gains ahead for sales and prices in the Dallas area”) in the Dallas Business Journal read in part, “2012 is turning out to be one of the best years in almost a decade for the Dallas-area housing market.
New and pre-owned home sales are rising sharply, and the number of houses for sale is at the lowest point in a decade.
“Most North Texas neighborhoods have made up the bulk of the housing value losses suffered during the recession.
“Housing analysts expect that the spring will be strong. And 2013 should see more gains for the local housing sector. ‘As long as the local economy holds up, I think the housing market will continue to improve,’ said D’Ann Petersen, an economist with the Federal Reserve Bank of Dallas. ‘The very low level of new and existing home inventories should give rise to prices as well. Low interest rates and relatively affordable prices are a boost to those deciding now is a good time to buy.’”
James Gaines, an economist with the Texas A&M University Real Estate Center, recently changed his 2013 Texas real estate forecast to reflect better times. “‘I think it’s going to end a little bit better than I originally thought,’” he told the business journal. “‘I think 2013 for Texas is looking pretty good.’”
The article continued, “homebuilder confidence in the Dallas-area market has soared this year. The industry lost about half of the residential builders in North Texas, but the companies still in business say they can’t keep up with buyer demand.
‘We’ve sold more million-dollar houses in the last four months than in the last four years and have sold more for cash,’ said builder Rudy Rivas, a principal with M. Christopher Custom Homes. ‘Our average sales price is up by more than $100,000 this year.’
“North Texas housing analyst Residential Strategies is predicting that home starts will rise as much as 15 percent here in 2013. Home starts have already increased about 25 percent in the Dallas Fort Worth since the bottom of the market in 2010.
“‘Our expectation for homebuilding in 2013 is about 20,000 starts’ in North Texas, said David Brown, who heads the Dallas office of Metrostudy Inc. ‘This is still well below half the pace of the prior peak but will represent about a 15 percent increase over 2012. I believe supply constraints will make it difficult to significantly exceed that growth rate.’
“Because housing inventories — both new and pre-owned homes — are at such a low level, Brown foresees more price hikes in the year ahead. ‘I expect prices to increase at a faster pace in 2013 than in 2012,’ he said.”
Meanwhile, according to Realtor Cindi Darragh-Leech, Austin’s real estate market is on the mend. “The Austin housing market increased 37 percent in the last 17 months,” she said. “Nationally the market only increased 9.6 percent and statewide only 14.2 percent. The median home sales price in Austin is $199,320, while it is $178,700 nationally and $161,400 statewide.”
Tim Thornton, another Austin real estate professional, wrote the following in a December blog post: “If you have been reading my blog all year in 2012, you know that Austin is one of the hottest markets in the nation right now. That is not just my assessment – this is a widespread contention from virtually every person who keeps up with the business of real estate. … We are coming out of a year of 20 percent growth in sales volume. The coming year will most likely be as strong or possibly stronger than 2012.”
“Houston’s real estate markets – both commercial and residential – have just finished an exceptionally strong year, and conditions remain positive as we sail into 2013,” wrote Ralph Bivens in a Culture Map Houston article (“Top 5 predictions for Houston real estate in 2013: Home prices, rents and mortages will rise; more supermarkets, too,” Jan. 8, 2013). “The inventory of homes for sale is at a 12-year low and local home builders say there’s a shortage of lots to build on.
“No matter who’s doing the leasing, rental rates are way up — in office towers, in apartments, warehouses and even for people who are leasing single-family homes.
Construction cranes are everywhere as new apartment towers and office buildings are erected in the most desirable parts of town. And what makes this construction boom different is that it all seems to be justified. Unlike years past, today’s developers aren’t just building new projects to get a tax write-off or to churn activity at a friendly S&L. What’s being built, is being leased. These are real deals, backed with solid fundamentals.
“It’s basic economics: supply is low and demand is high. Fasten your seat belt, home prices are taking off.”
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