What's in store for the housing market in 2011? Since 2006, the number of homes sold has fallen each year in Texas. Sales for 2010, however, hovered closer to 2009 levels. Does this mean the beginning of the end of the market slump? Economists Mark Dotzour and James Gaines from Texas A&M University weigh in.
JOB GROWTH
According to Dotzour and Gaines, Texas needs at least a 2% job rate increase to stimulate new households and encourage buyers to the market.
PRICES
The median home price in Texas did well in 2010 compared to the rest of the country. Dotzour and Gains predict that median will increase slightly by the end of 2011.
INTEREST RATES
Rates should stay relatively low to stimulate economic activity. As the year rises, though, we should notice a rate increase. If buyers expect rates to increase, they may feel pressure to buy sooner rather than later.
LOCAL MARKETS
There is little risk of overemphasizing that real estate is a local market. Even within Texas, housing has performed differently. When looking at the DFW area, many neighborhoods have fared better than others during the past few years. It's important that as a buyer or seller, you seek reliable data from a real estate professional who is well acquainted with the sales performance of your particular neighborhood. Foreclosures and distressed sales have significant impact on price per square foot, as does new construction.
BUYER EXPECTATIONS
Consumer attitude plays a substantial role in housing. Today's buyer expectations are as fragile as our recovering economy. Whether realistic or not, buyers' views on pricing, condition, interest rates, and loan availability will ultimately determine the 2011 market.
In Dallas, expect modest increases in home sales and prices. Economic indicators point toward a slow overall improvement in the economy and relatively stable interest rates. Home ownership has always proved beneficial in the long run.
Source: Texas Realtor Jan/Feb 2011
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