Home prices in most major Texas cities rose in 2012, according to Realtor.com. The median price rose by double digits in Abilene, the largest gain among the big cities. Dallas and Corpus Christi also saw significant gains.
The list below is derived from housing data provided by Realtor.com. The percentage beside each city represents the change in median home prices from the third quarter of 2011 to the third quarter of 2012. The number in parentheses is the last reported median price, as of November 2012.
Median home price changes in 2012:
- Abilene: +12% ($135,700)
- Amarillo: +6.9% ($140,000)
- Austin – Round Rock: +6.7% ($207,900)
- Corpus Christi: +8.1% ($146,600)
- Dallas – Forth Worth – Arlington: +8.8% ($165,200)
- El Paso: +4.7% ($124,100)
- Houston – Baytown – Sugar Land: +5.0% ($167,500)
- San Antonio: +3.6% ($161,900)
Texas real estate prices are expected to continue rising in 2013, the result of growing demand and increased economic stability.
Texas Real Estate Stability, Then and Now
From 2005 to 2012, the trend line for most Texas cities could be described as mostly flat with minor appreciation during the boom years. The Lone Star State avoided the kind of rampant speculation that fueled boom-and-bust cycles across much of the country. As a result, home prices in Texas rose modestly — and sustainably — in the early to mid 2000s, while prices were skyrocketing elsewhere. This insulated the state from the worst effects of the housing crisis.
Texas real estate prices fell a bit during the housing crisis, but not nearly as much as in other parts of the country. This can be seen in the table below. This is the 20-city index of the S&P/Case-Shiller Home Price Index. These numbers were reported in October 2009, when the housing crisis was wiping out home prices across the country. But notice the difference in the “1-Year Change” category between Dallas (which loosely represents Texas as a whole) and the other major U.S. cities. Real estate prices were only down by -1.2% in Dallas, compared to the much steeper declines in Atlanta, Chicago, Detroit, Los Angeles, Minneapolis, etc.
Now flash forward three years. Today, housing inventory is a major factor in pricing trends. Inventory dropped in all Texas real estate markets in 2012. The most significant reductions occurred in Dallas, Corpus Christi and Houston, where the number of homes for sale on Realtor.com fell by more than 20% over the last year or so.
Employment is another area where Texas has outpaced the rest of the country. All major cities have added jobs over the last year. In October 2012, the U.S. unemployment rate sat at 7.9%. Texas cities were performing much better (5.3% in Austin, 5.8% in Corpus Christi, 6.0% in San Antonio, and 6.2% in Dallas). This puts more people in a position to buy a home, increasing demand and home prices at the same time.
Housing Forecast for 2013
Texas did not have the kind of speculation that drove price bubbles in most other states. Real estate prices did not swell in the early to mid 2000s, so they didn’t have far to fall when the market crashed. Today, home prices across Texas are well supported by growing demand, population growth, and infrastructure development. As a result of these and other factors, it is likely that Texas real estate prices will continue to rise in 2013.
Mortgage rates should remain attractive for most of 2013. During the first week of January, 30-year mortgage rates averaged 3.34%. According to Freddie Mac, rates are “near their all-time record lows helping to keep homebuyer affordability high and aiding the ongoing housing recovery.”
Low rates, combined with a steadily improving job market, will bring more buyers into the Texas real estate market in 2013. As a result, we expect to see modest appreciation of home prices in most areas of the state.
Disclaimers: This story contains forward-looking remarks about property values, mortgage rates, and other economic conditions. This information is provided for educational use only and does not constitute financial advice. We make no guarantees about the future of this or any other housing market.