What can we expect from the Texas real estate market in 2021? The coronavirus pandemic has certainly made real estate market predictions more difficult, but potential homebuyers can still take encouragement from several consistent trends that predated Covid-19. Topping the list? Texas real estate remains hot property, particularly for buyers from out of state. What remains to be seen is the degree to which pandemic uncertainty affects the general momentum. Here is our take on the Texas real estate market now  and our predictions for 2021. 

Slowdown Possible...

The bad news is that even the Texas Association of Builders expects a national economic slowdown to make its presence felt in the Lone Star State in the year ahead. Nationally, the GDP is not expected to return to its 2019 peak until at least 2022, so there might be belt-tightening ahead. The good news is that Texas has every possibility of faring better than other states. Historically, Texas boasts one of the nations most dynamic markets based on sales, median prices and building permits issued, so whatever hit the state takes, the bounce-back should be swift. 

...and Boom Probable 

Nobody promised that 2021 would make any more sense than 2020. Even though this year will pose its own unique challenges, were not facing a pall of economic gloom falling across the state, by any means. In fact, North Texas will continue to see a surge in house prices. Consider that sales increased 6% in 2019 and that median house prices have reached an all-time high of $290,000. Lets not confuse the pandemic with the 2008 housing bubble. Conditions are challenging, but confidence remains high. 

House Prices Continue to Rise

Were in a sellers market, buoyed by historically low interest rates. That likely wont be changing in the near future. House prices have been increasing steadily for quite some time, and the freeze on new construction  also called new builds, in our business  brought about by the pandemic (i.e., lack of construction materials, labor shortages) has compounded fierce competition for a limited housing stock. These factors point to a steady rise in house prices. Bear in mind that regional variations apply. Sought-after metropolitan areas will be the big winners, though. As an article in Texas Monthly notes, even Houstons lowest-priced offering a foreclosed home in Houston Heights marketed as a teardown rose from an appraised value of $36,000 in 2011 to $248,000 in 2020.

Keep an Eye on Oil

Because were talking about Texas, oil will inevitably be featured in the discussion and theres no avoiding the fact that prices are plummeting. In simple terms, historically low oil prices (they went negative in April 2020) and high house prices cannot live together for long. If oil prices dont recover, the Texas housing market loses a steady financial lifeline. Budgets could be cut, projects put on hold and oil-dependent cities such as Houston will feel the pinch. At the same time, Texas in no way runs exclusively on oil. In cities such as Austin, for example, where the support of the Tech sector is strong, growth can continue unimpeded in 2021. 

Happy Days in the Sun Belt

First came the pandemic, then came remote working, and now the news channels and style guides are heralding the Great American Move. Texas stands to reap the rewards of a rush for the so-called Sun Belt, as workers seize the opportunity to locate to regions with more space, a better work/life balance and more competitive prices per square foot. The Dallas/Fort Worth real estate market is hotter than ever, with other cities such as Houston and San Antonio also at the top of many buyers wish lists. Cities such as Austin, dubbed 18-hour cities for their active downtowns, are also likely to attract remote workers, millennials and young families in increasing numbers. 

Weve only scratched the surface here, especially given the size, scope and range of Texas. For a deeper dive of insight, get in touch with any of the expert agents at Briggs Freeman Sothebys International Realty. They have ground-level perspectives on what to look out for as you look to buy or sell in Texas.

Pictured at top: A historic East Dallas estate at 5016 Gaston Avenue Dallas, Texas is available for $799,000.