2016 Texas Housing Market and Real Estate Predictions

Texas, the Lone Star State, became the 28th state added to the United Stated in 1845. Centrally located on the country’s southern border, it is the second largest state at 268,581 square miles. These miles are covered by a wide variety of environments ranging from prairies, grasslands, and piney wood forests to mountains and coastline and coastal swamps. Less than 10 percent of the state is desert.

Texas is second in population with an estimated 27,469,114 residents. Based on numbers from 2015, the state’s population saw and increase of 9.24 percent since the 2010 census. The top employer is Texas A&M University, in fact, the state is home to 208 colleges and universities. Texas A&M is followed closely by Shell Deepwater Development Inc., MD Anderson Cancer Center, and Dell. The top industries are agriculture, petrochemicals, energy, computers and electronics, aerospace, and biomedical sciences.

Make Sure You Check Out the 2015 Texas Housing Market To Compare This Year to Last Year’s Report

Texas has a large and diverse economy. There is no state income tax, and the state and local tax burden is the 7th lowest in the United States at 8.4 percent of resident incomes. The current unemployment rate is 4.5 percent, up slightly for the state but still below the 4.9 percent national average. Recent job growth shows a steady increase, projected to continue at 0.5 percent through the end of 2016. In 2014, the projected growth rate for the next ten years was 40.5 percent.

The Texas housing market has seen home appreciation rates increase by 1.02 percent in the last quarter and 8.18 percent in the past twelve months. Texas real estate property values are $157,000 according to Zillow’s home value index, 8.1 percent higher than 2015. The values are expected to continue increasing by 4.7 percent by the end of June 2017. Zillow lists the rent index as $1420, only a few dollars less than that of the national index. The real estate market has seen major ups and downs over the past five years. However, there has been a huge increase over the past three years (since 2013) and that pattern is expected to continue. Zillow rates the Texas housing market as very healthy with a score of 9.6 out of 10. The 2016 housing market seems to be doing the best in San Antonio, Dallas, and Austin.

Texas Housing Market

Source: Zillow
The best views money can buy on the Dallas real estate market

Influencing Factors for the 2016 Texas Housing Market

  • Based on the Zillow home value index, the median home value is $157,000. That’s $13,000 higher than last year’s $144,000.
  • 1 in every 2,712 homes is in foreclosure, that is a rate of 0.04 percent, lower than the national rate of 0.07 percent.
  • Up from 2015 by 3.1 percent, the median rental price for a two-bedroom residence is $1240.
  • The current APR for a mortgage in Texas is between 3.17 percent and 3.38 percent with an average of 3.32 percent. The average is on target with the national average of 3.30 percent.
  • The current problem faced in Texas real estate is finding/creating affordable housing for rural farm workers.

Best Places to Live in Texas

The capital of Texas is Austin, about 931,830 people live there making it the fourth most populated city in Texas. University of Texas Austin is located in the city. Graduates of UT Austin partially contribute to Austin being a technology center. Just over half (53 percent) of that population are home owners, 42 percent are single, and the average age of Austin residents is 34 years. Austin real estate is currently considered a cool market but still healthy with an 8.5 out of 10 rating from Zillow. Zillow Austin lists the current home value at $252,900, that is an 8.8 percent increase over the previous year (2015) and a predicted future increase of 3.7 percent. Craigslist Austin lists a variety of home prices: a one-bedroom condominium is available for $197,000; one three-bedroom home is listed at $295,000, another is listed at $419,500; a four-bedroom house is $559,831; and yet other four and five-bedroom homes are a million dollars or more. Trulia lists 51 homes for sale that are currently in foreclosure.

Fourteen percent of Austin’s population rent their residence, and 35 percent of all housing is apartments. Students often make up a large percentage of those renting homes and apartments in Austin. Trulia Austin lists 2059 rental properties and Zillow lists a rent index of $1715 (the average list price being $1520), a 2.6 percent increase over last year (2015). One-bedroom, one-bathroom apartments, ideal for college students begin renting from about $475 dollars. Rental properties skyrocket to a six-bedroom lake property for $19,000 per month.

The third largest city in Texas and ninth largest in the country is Dallas with a population of 1,300,092. Fifty-five percent of the residents own their homes, 35 percent of home owners are single and the median age is 33 years. Dallas is well known as the home of multiple major sports teams. They host franchises for the National Football League (NFL), Major League Baseball (MLB), the Nation Basketball Association (NBA), The Women’s Nation Basketball Association (WNBA), the National Hockey League (NHL), and Major League Soccer (MLS). Another claim to fame for Dallas is that it was home to the first skyscraper west of the Mississippi River.

The Dallas real estate market is healthy earning 9.4 out of 10. Nevertheless, it is considered a cold market by Zillow. It is not cold due to some sort of economic downturn. Instead, according to economists with Nationwide Insurance, this market is too hot (or in demand) which leaves them to only hope that job growth can counter act the price increases in the real estate market supply. Zillow states the home value index is $189,500 with an average value of $211,000. This is a 12.1 percent increase over 2015 prices and is predicted to continue increasing at a rate of 5.9 percent. There is an abundance of million dollar homes featuring anywhere from four to eight bedrooms a two-bedroom home can be purchased for $50,000 to $75,000. The median list price for homes in Dallas is $400,000. The foreclosure rate is 1.78 per every 10,000 homes.

Over half, 53 percent, of residents in Dallas rent their homes. The rate index from Zillow is $1541, a 4.4 percent increase over 2015. The typical cost is $1342 for Dallas and just slightly higher at $1550 for the Dallas-Fort Worth Metroplex. Based on listings on Trulia, a one-bedroom apartment rents for approximately $500 and more elaborate homes ranging from three to five bedrooms are renting in excess of $10,000 per month.

The Houston real estate market is considered cold by Zillow despite the fact that it scores a very healthy rate of 9.4 out of 10. As the most populous city in Texas (and fourth in the United States) at 2,099,451, 57 percent of residents own their homes. Thirty-one percent of the residents are single and the median age is 33. The current home value is $172,900, 8 percent above last year (2015) and predicted to go up another 4.1 percent. The median listing price is $300,000 and Trulia lists the average sale price as $437,610. Homes for sales start anywhere from one, two, and three bedroom properties for less than $50,000 and go up as high as multi-million dollar properties with five to seven bedrooms. The rate index for renters in Houston is $1585 which is 2.5 percent higher than 2015. The median rent is $1,650. Again, there is a broad range of rental properties beginning with one-bedroom studios and apartments for less than $500 up to a five-bedroom house for $25,000 per month.

The second largest city in Texas and seventh in the United States is San Antonio, home of the Alamo. The current population is approximately 1,436,697. San Antonio real estate is considered a hot market right now. Zillow’s current home value is $152,300 with an average list price of $201,000. These numbers reflect an increase of 7 percent over 2015 and a predicted further increase of 4.1 percent. A large number of San Antonio residents, 65 percent, own their homes. Twenty-nine percent of homeowners are single and the median age is 34. The median sale price is $259,000 with a median listing of $235,000. A modest two or three-bedroom home may sell in the vicinity of $45,000 while higher end properties sell for just short of $10 million. The foreclosure rate in San Antonio has dropped 23 percent since June 2015. The median rent is $1400; Zillow’s rent index is $1246 (a 2% change from 2015). Based on Trulia listings, a studio apartment rents for $450 whereas a four-bedroom houses rents for $6500.

Frisco population of 155,835 is 18th in Texas. A more affluent part of the Dallas-Fort Worth Metroplex, it is probably best known as the home of the NFL’s Dallas Cowboys headquarters. It is also home to the NHL’s Dallas Stars headquarters. The Frisco real estate market is healthy, 9.8 out of 10, but still considered a cool market. The current home value is $366,500, 7.7 percent over 2015 and expected to continue upward at 5 percent. The average list price is $528,037 with a median sale price of $486,000. The foreclosure rate is 0.03%, lower than both the state and national rates. Eighty-nine percent of residents own their homes leaving a smaller population to rent. Rental properties start as low as $650 for a one-bedroom apartment up to three to five bedroom houses for $3000 to $5000.

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