Whether you’re looking to buy a home or planning to sell, it’s important to have a deep knowledge of your real estate market. Knowing the trends and the state of the market can make all the difference when it comes to achieving your real estate goals.
When it comes to Texas real estate sales, the market is constantly evolving. What was true the last time you sold a home may not still hold true today. Getting the best price for your home depends so much on the current trends of the market. As a seller, you need to be aware of those trends and how they could impact you.
Getting the best price for your home depends so much on the current trends of the market. As a seller, you need to be aware of those trends and how they could impact you.
If you’re considering a sale or know that you’ll be putting your home on the market soon, then this guide is for you. Read on to learn everything you need to know about the trends affecting Texas real estate sales.
1. North Texas Real Estate Sales are Hot — And Staying That Way
In May 2017, the median price of North Texas real estate sales hit an all-time high of $225,000. Looking at the area a little closer, it’s not hard to understand why.
Jobs Contribute to Growth
Jobs in North Texas are booming, particularly in Dallas. The Dallas metro area has experienced growth of almost 20.6 percent since 2011 and is currently the number one city for jobs according to Forbes.
The North Texas Climate is Surprisingly Mild
Texas is known for its hot temperatures, and that’s just as true for North Texas as it is for the rest of the state. But a lack of humidity makes even the hottest temperatures feel more manageable. And the North Texas area experiences all four seasons, so there’s relief from the summer heat once fall rolls around.
There are Many Educational Opportunities
Throughout the North Texas area, there are excellent schools catering to children at every level of their education. The school district has options for all ages and types of learners. That makes it a desirable spot for families.
You Get a Balance of City and Small Town
The North Texas area has all of the amenities of a big city, but living there never feels overwhelming. The infrastructure of the area is easy to navigate, and there are friendly neighborhoods throughout. That gives the place a small town feel, but anything you want is available to you, which is one of the biggest perks of a city.
There are also a number of outdoor activities easily accessible. When you want to embrace the natural beauty of the area consider a bike ride, kayak or canoe.
Home Prices Will Continue to Climb
Looking at all the factors that make up the personality of the North Texas area, it’s easy to understand why it’s such a desirable place to live. Demand for homes is strong, but there is a shortage of affordable, well-located homes that are going up for sale.
Because the demand is outpacing the supply, homes that do go on the market are likely to continue to sell at record high prices.
2. Texas Will Continue to Be an Attractive Market for International Homebuyers
Texas real estate sales will always be of interest to residents, but in recent years more international homebuyers have been paying attention as well.
The most recent Texas International Homebuyers Report, published in September 2016, provides details on the extent of international interest in the Texas market. According to the report, international homebuyers were responsible for adding more than $10 billion to the Texas economy from April 2015 to March 2016.
Perhaps unsurprisingly, the majority of international homebuyers were from Latin America, including Mexico. But the exact breakdown of countries represented is worth noting.
Where Texas International Homebuyers are From:
- 36% of international homebuyers were from Latin America, including Mexico
- 34% of international homebuyers were from Asia/Oceania
- 12% of international homebuyers were from Europe
- 8% of international homebuyers were from Africa
- 4% of international homebuyers were from Canada
Overall, Texas real estate sales to international buyers accounted for 10 percent of all international home sales in the United States from April 2015 to March 2016.
Despite certain changes in the economic and political climate, this growth is not likely to slow down anytime soon. All of the factors that make Texas a desirable place to live — low unemployment, diverse industry, excellent schools — are appealing to international buyers as well.
3. Mortgage Rates Are on the Rise
At the end of 2016, mortgage rates rose sharply and have continued to do so throughout this year. These higher rates won’t necessarily cause Texas real estate sales to slow, but if you’re considering buying a house, it could impact your timeline.
If you’ve been putting off buying a home until the end of the year, you may want to rethink your strategy. If the rates rise as predicted — and as they did last year — you may end up paying more for both your home and your loan.
A hot market can make it difficult to find your dream home on an accelerated timeline, but waiting too long could put that home out of your price range altogether. Working with an experienced broker now is the best way to ensure that you find the home you love as soon as possible, while you can still afford it.
Current borrowers who are interested in re-financing should also consider trying to get that done as early as possible.
4. Mortgages are Easier to Get Than Ever Before
An increase in mortgage rates is not actually impeding people from getting mortgages. That’s good news for Texas real estate sales, for both buyers and sellers.
Mortgage standards are still quite lenient, and banks are willing to work with buyers — especially first-time buyers — on a more personal level to help them get the mortgage they need.
The rise of alternative mortgage lenders is also contributing to the ease with which potential homebuyers are getting mortgages. Alternative mortgage lenders are non-bank companies that can make the process of getting a mortgage more efficient by handling it almost entirely online.
Non-bank alternative mortgage lenders can be particularly helpful to buyers with less than perfect credit.
National banks are more likely to give mortgages to the borrowers with the best credit scores. Because smaller, alternative lenders face less federal regulation, they are more likely to welcome potential homebuyers regardless of their credit history.
Whether it’s with a bank or an alternative lender, the more available mortgages are, the more confidence people will have in purchasing a home.
5. Smaller Homes are More Desirable Than Ever
Texas may be infamous for its size, but when it comes to Texas real estate sales trends, smaller might actually be better.
Small doesn’t mean tiny — these are Texas real estate sales we’re talking about, after all — but many of the new homes being built now are a far cry from the McMansions of the past. That’s partly thanks to millennials, who, in addition to becoming first-time home buyers, are known for prioritizing experiences over things.
Smaller homes allow buyers to be closer to cities, where they can experience the best in nightlife, dining, and entertainment. Downsizing on your home also necessitates that you downsize in the number of things you own.
There’s also the idea that a smaller home is easier to leave for long stretches of time. This is particularly attractive to a new generation of first-time homebuyers, who want to have the freedom and flexibility to travel without having to worry about the maintenance of a large home while they’re away.
6. Renting Could Soon Overtake Buying
Throughout Texas, the inventory of available, affordable homes is low. Looking ahead it could get even more difficult for buyers to find the property that they want within their price range.
If that happens, many will turn to renting. Because incomes are not likely to rise at the same rate as home prices, buying will be become too expensive and renting will be the practical alternative.
But what does that mean for Texas real estate sales? Investing in a rental property now is likely to pay off in the future. If you purchasing a second home or apartment now — while mortgage rates are still reasonable and affordable options are still available — you could be making money off of it sooner than you think.
As the tenant market grows, you could be in a position to rent out your property for the cost of your mortgage or more. Home sales are not likely to decrease soon, so if you’re able to invest in another property now, it’s a move that you could benefit you for many years to come.
7. There Will be Fewer All Cash Buyers
Following the recession, the number of homebuyers making all-cash purchases of property reached a peak. Buyers who were not in a position to make that type of offer were at a disadvantage and many missed out on homes that they were otherwise qualified to own.
As we’ve moved further away from the housing market collapse, the amount of all cash buyers has been on the decline.
That’s good news for any buyer who requires financing. Just a few years ago, needing financing would have made it difficult to compete in bidding wars against buyers who could make cash offers.
Now that the majority of homebuyers are relying on financing again, the playing field has evened.
8. Energy Efficient Homes are Becoming More Popular
Smart technology and energy efficient homes were once thought to be futuristic. But environmentally friendly technology has advanced beyond what most of us could have previously imagined.
Incorporating smart features into your home no longer seems out of reach, and in certain Texas real estate markets, that technology is in high-demand among home buyers.
Even if you didn’t buy your home with that type of technology installed, you may want to consider it as a smart investment if you plan to sell in the near future. And it can be incorporated into your home slowly. It doesn’t have to be an all or nothing proposition.
The next time you upgrade your air conditioning system or are in the market for a new refrigerator, do some research to determine if there are any environmentally friendly options within your price range. These items are more affordable than ever, and there is often a range to choose from.
Particularly in the kitchen — a room that all potential homebuyers look at closely — energy efficient appliances and smart technology will be a major selling point. A few small upgrades can go a long way in impressing potential buyers.
9. Fixer Upper Homes Attract Younger Buyers
First-time homebuyers, especially those in the millennial demographic, are looking to stay clear of the “cookie-cutter” houses that so many suburban neighborhoods are associated with.
These buyers want a house that truly reflects their personal style, with a layout that fits their exact needs. Because of this, fixer upper homes and home needing major renovations are becoming popular fixtures of Texas real estate sales.
Buyers who are attracted to these types of homes prioritize character and charm, and would rather invest their money in personal touches, rather than move-in ready convenience.
10. There is a New Emphasis on Marketing Your Home
Every industry relies on marketing, and real estate has always been the same. But as the market becomes more competitive, promotion and marketing are becoming more popular. Texas real estate sales have been booming, and sellers are looking for ways to stand out.
You should take advantage of marketing when you’re preparing to sell your home, but in order to do so successfully, you need to know the etiquette of doing so. It can help you sell your home faster than you would have expected.
Want to Know More About Texas Real Estate Sales?
It doesn’t matter if you’re looking to buy a new home or preparing to sell yours — the real estate market can be confusing. Being up-to-date on the Texas real estate sales trends and the forecast of prices can help you plan correctly.
Being informed, and working with a broker who is as well, is your best chance to get the house you want at a price you can afford. Or, if you’re a seller, to get the price you deserve for your property.
For more information or to begin your real estate journey, please contact us at any time.