Buoyed by a record-breaking third quarter of 2020 in which home sales increased 18.4 percent in Texas, the Lone Star State looks set to remain a seller’s market for quite some time. With the worst of the pandemic disruption and job hopefully over — touch wood — any Texas homeowner may rightly be asking, “Should I sell my house now?” A number of factors, including high demand, low borrowing rates and quirks in Texas real estate inventory suggest that the answer is a resounding “yes.”
Texas real estate market forecast: Sunny
The conditions are currently perfect for a quick, profitable home sale in Texas. For a start, interest rates remain historically low, dropping to 2.8 percent in 2020. Less costly borrowing fuels activity in the housing market as buyers can lock in loans that allow leeway for whatever surprises the economy has in store. Add to that a persistently limited inventory in Texas, particularly among homes priced below $300,000, and there’s only one direction for prices to go.
Feel the boom
- Single–family home sales are projected to increase by 8.4 percent in 2021.
- The median house price in Texas hit a record $274,800 in November 2020, up 12 percent on the previous year.
- The average number of days on the market fell to just 44 days in November 2020, and it’s even lower in Austin (32), Fort Worth (33) and Dallas (35).
With limited inventory cooling sales among the lower price ranges, the conditions are perfect for homeowners to move up the ladder into higher–priced properties or areas.
Influx is driving demand
More than 100,000 new residents relocated to Texas in 2019, primarily from California and Florida. Given that the median house price in California comfortably crossed the $700,000 threshold in 2019, there’s some serious buying power flooding across state lines into desirable areas such as Houston, San Antonio, Dallas and Fort Worth. Likewise, the ongoing migration from Silicon Valley to Silicon Hills has seen the median price of homes in Austin rise to $370,800. As long as the Texas economy and job market remain buoyant, demand for real estate will outstrip supply. The stories of up to 30 offers being made on a single home in the Dallas-Fort Worth area have some time yet to run.
Millennials are powering price rises
Texas homeowners who put their properties on the market in 2021 are more likely than ever to find themselves exchanging contracts with millennial buyers. This demographic now comprises the largest share of homebuyers in the U.S., and they’re not looking for fixer-uppers. They’re tech-savvy and wield considerable financial clout, thanks to high earnings and wealth inherited from baby–boomer parents. Millennials are driving up the demand for high-end real estate in areas such as Austin and Dallas, in particular.
Desirable areas where sales are high
Limited inventory triggered a decline in sales to the end of 2020 in North Texas, with sales down 2.9 percent in Dallas and 1.2 percent in Houston. But these are buyer problems: At the same time, the median house price in North Texas rose 11.9 percent in the last year, hitting an impressive $328,200 in Dallas and $278,600 in Fort Worth. These metro areas, along with San Antonio (2.2 percent sales increase), benefit from a robust job market and stable economy. Overall, home values are expected to grow by 5.3 percent in 2021 for Dallas-Fort Worth, a strong signal to sell — if any were needed.
Looking to sell your Texas home in 2021? Get solid, reliable advice from our team of friendly and experienced agents.