Is there a housing bubble in Texas? Is it a good time to sell, buy or wait out the market?
So, are we in a housing bubble?
I get one form or another of this question several times per week. Sometimes it is not in the form of a question but rather a solidly convinced statement from the person I am talking to.
Then there are the times that I am simply asked:
- So when is the bubble going to burst?
- Is this still a good time to sell my home?
- Is it still a good time to buy a home?
- Where will I move if I sell my home now?, etc. etc. etc.
I would love to tell everyone of you what my magic crystal ball is showing. But obviously it doesn't work that way. However, we can look at various items and signs to predict if this is indeed a bubble and possible timing of a change.
The first thing is the housing market itself. I am not going to generalize and say that the market is the same in every part of the country - because it isn't. I will even say that as I talk about North Texas, what I say will be true for MOST areas, but there are a few small pockets that do not follow the same patterns as the majority of our market. We simply do not have enough homes for the number of people that would like one. Will this end? Someday, yes as real estate has historically gone through cycles and will continue to do so. Will this demand end in 2022? Not likely!
New home construction has not been able to keep up with demand and we still have many people waiting a great deal of time for the home they contracted on to be built. There are many others that are on waitlists for lots that have yet to be released due to development timeline limitations. Quite simply, we still have more demand than we have upcoming houses. The demand for pre-existing homes is equally high with many prospective buyers for every home that comes on the market and often multiple offers being received. Typically when we see a home that does not receive this kind of interest, that home has either optimistically been overpriced or is not in top condition to command a high price. Many buyers right now are willing to pay top dollar for a home that is in great condition, or they are willing to pay a "fair" price for a home that is going to need some work. When a home seller is feeling like the market is going to over pay for their home and set their initial price very high, that is where we see a home that sits an extended period of time or comes back on the market due to a failed sale.
As Texans we were spoiled by low housing prices for a very long time. Even with the surge in home values we have seen over the last couple of years we still don't match the housing prices up and down the entire west coast or the northeastern states. Even some larger cities in the midwest have historically higher prices which Texas is just starting to catch up to. The Dallas and Fort Worth metropolitan area was already the 4th largest metro population in the country prior to this surge. Now, there are announcements on a regular basis of another major company moving some part of their operations to one of the major Texas cities. The business movement creates jobs. No matter how many existing employees those moves may bring with them, there are more new residents coming to Texas cities. We are also seeing many people that have been able to move to a long term work from home lifestyle decide that Texas is a good place for them to work from home verses where they currently live. Also a number of local residents that have decided a comute to work is no longer a factor, so they are deciding to move to suburban master planned communities with many activiites to do right in the neighborhood.
So to answer the initial question I posed in this rambling.... Do not expect the demand for housing in North Texas to slow down in 2022. Therefore do not expect housing prices to come down either. Whether it is a good time for you personally to buy or sell a home involves more evaluation of personal needs which we would of course be happy to help you assess. So give us a call, send a text or email, or fill out a "contact us" form on our site for a no cost and no obligation consultation. One thing I can say is that if you are "waiting out the market" for houses to become more affordable... While you are waiting, the prices are continuing to go up every month (they are actually going up more frequently then every month). So the house you might consider today, will cost you more by the end of 2022 and you will have spent another year putting money into your current living situation. That may be fine for you, I'm just saying don't expect the market to turn down and housing prices to be lower than they are today.