Real estate markets across the state of Texas have been sizzling in 2021, and housing predictions for 2022 predict more of the same.
Recent home-price forecasts issued by Zillow suggest that real estate markets across Texas could see continued price growth into 2022. And that’s not surprising, when you look at supply and demand conditions in cities like Austin, Dallas and Houston.
Positive Housing Market Forecasts for Texas Cities
Texas real estate markets like Austin, Dallas and Houston have been highly competitive throughout 2021. But it actually goes back to 2020, when the coronavirus pandemic spurred a nationwide surge in home-buying and relocation activity.
Suddenly, a lot of people from around the country were moving to relatively affordable cities like those in Texas. These and other factors led to a sharp increase in home sales and prices. They also pushed inventory levels top record lows.
Recent forecasts for the major Texas housing markets predict the upward trend of home prices will continue into 2022. As of August 2021, the real estate data company Zillow was offering positive predictions for major metro areas like Austin, Dallas and Houston.
Here’s a look at their latest data and forecasts, broken down by metro area:
Austin – Round Rock – San Marcos
What can we say about the Austin real estate market we haven’t already said. The housing scene in and around Austin has been stuck on ludicrous speed for well over a year now. Significant population growth and limited supply have boosted competition and home prices alike.
In August, Zillow issued a strong forecast for the Austin-Round Rock-San Marcos real estate market extending into 2022. They predicted that home prices in this metro area would rise by 17.8% over the next year.
Over the past 12 months, the median home value in the Austin / Round Rock area rose by a whopping 41% according to Zillow. When this story was published, in August 2021, the median price point in the area was approaching half a million dollars. It will likely exceed that threshold by the end of 2021 (as it already has within the city of Austin).
Dallas – Fort Worth – Arlington
The DFW metro area has also seen steady home-price growth over the past year, partly due to population growth. According to Zillow, the median home price for the Dallas-Fort Worth-Arlington metropolitan area rose by 19.4% over the past 12 months.
Looking forward, the company offered a double-digit price forecast for the Dallas area real estate market into 2022. At the end of August 2021, they predicted the median home value for this market would rise by another 14.5% over the next 12 months.
The median price point for the Dallas metro area was around $313,000, when this story was published.
Houston – The Woodlands – Sugar Land
The Houston-area real estate market has also seen double-digit home price growth over the past 12 months. It also received a positive forecast extending into 2022.
The research team at Zillow predicted that home values in the Houston metro area would rise by around 12.9% over the coming year. That particular forecast extends into late-summer of 2022. The median home value for this real estate market rose by around 15% over the past 12 months.
San Antonio – New Braunfels
There’s a double-digit theme happening here, regarding home-price growth in the major Texas real estate markets. And the San Antonio metro area is no exception. Home prices there rose by approximately 17% over the past year, based on Zillow’s data.
Their forecast for the San Antonio real estate market predicted a continuation of this trend into 2022. The company predicted that home values in the area would rise by around 13% over the next year.
Common Thread: Low Supply and High Competition
The bottom line here is that all of the major real estate markets in Texas have received positive home-price forecasts for 2022. But that’s not all these cities have in common. Let’s shift gears and look at the supply and demand dynamics that are driving these positive trends and forecasts.
1. Not enough homes for sale to meet demand
Housing market inventory in cities like Austin, Houston and San Antonio have plummeted over the past 18 moths or so. The short version is there aren’t nearly enough homes for sale to satisfy the demand from buyers.
As of July 2021, all of the cities and metro areas contained in this report had less than a two-month supply of homes for sale. That’s well below historical averages and points to a highly competitive real estate market.
2. Significant population growth in recent years
Major cities across Texas have experienced significant population growth over the past decade. This trend brings more home buyers into the market, fueling competition and boosting prices. Cities like Dallas, Austin and Houston all experienced double-digit percentage gains in population from 2010 to 2019, higher than the national average.
Growth has been especially high in and around Austin, Texas. In fact, several cities within the Austin metropolitan area experienced population growth greater than 30% during the nine-year period mentioned above. Cedar Park, Round Rock, and San Marcos fall into that category.
This is partly why these Texas real estate markets are receiving strong forecasts stretching into 2022. All of those new residents need somewhere to live, after all. And many are entering the real estate market in search of homes to buy.
3. Stiff competition among buyers
Due to the supply and demand conditions mentioned above, Texas real estate markets have experienced a high level of competition in 2021. Predictions for 2022 suggest we could see more of the same next year.
Housing markets in Dallas, Austin, Houston and San Antonio also have a high percentage of homes that are selling above the list price. This is especially true in the Austin metro area, where roughly 70% of homes sold above the list price during the month of July 2021.
Similarly, many of the homes listed for sale in these housing markets end up selling in less than two weeks. Stiff competition among buyers is the driving factor behind these trends.
Given all these factors, it’s no surprise to see these Texas real estate markets receiving positive home-price forecasts for 2022. We might see a slight slowdown in price growth, going into next year. But it’s almost certain that house values will continue to climb to some degree.
Disclaimer: This report contains predictions for housing markets across the state of Texas. Those projections were issued by third parties not associated with the publisher. The Home Buying Institute makes no claims about future economic or real estate trends.