Texas is the place to be for economic prosperity and job growth, which in turn has made our real estate market one of the best in the nation, according to the 2014 Texas Annual Housing Report, released this week by the Texas Association of Realtors.
Nearly every area of real estate in the Lone Star State continues to get bigger and better, some of it astoundingly so, the report shows. Most notably, growth has happened in luxury home sales, international home buying, relocation activity, condominium sales, and remodeling trends.
“It’s a great time to live in Texas. The high demand for Texas real estate is not being fueled by speculation and investment activity—it’s driven by the thousands of people who move to the Lone Star State daily,” said Dan Hatfield, chairman of the Texas Association of Realtors. “People are moving to Texas from across America and around the world to take part in our state’s booming economy, business-friendly environment, and quality of life.”
The Dallas-Fort Worth area is one of four major metro areas in Texas, and the statewide trends are certainly true here, said Becky Connatser, Dave Perry-Miller InTown office manager and regional vice president for the Texas Association of Realtors.
“We continue to have more people moving into Texas than any other state in the nation,” Connatser said. “International homebuyers moving into Texas are contributing more than $11 billion to our economy, for example, and that’s helping us in North Texas.”
More than 584,000 people moved to Texas from out of state in 2013, according to the report. Of the top 10 Texas counties with the most people entering the county, four are in the Dallas-Fort Worth area: No. 2 Dallas, No. 3 Tarrant, No. 5 Denton, and No. 7 Collin.
Many of those people are buying in the luxury market, Connatser said, which is defined as million-dollar-plus houses.
“There are people moving into our North Texas market from other states, like California and New York, where the prices are significantly higher, and our property values seem to be pretty darn reasonable,” she said. “They can buy more house here.”
In the North Texas area, there was a 22 percent increase in luxury home sales in 2012, with 809 houses selling, making up 1.1 percent of the total housing market. Compare that to just one year later, when there were 922 active listings for luxury houses in DFW, making up 4.1 percent of all active listings on the market.
“The luxury area has been a growing market in the past few years in Texas, and a significant growth market in North Texas,” Connatser said. “Based on the good economy, people are feeling good about buying properties again and see that it is a viable way to invest their money. Texas luxury sales saw a 35 percent increase year-over-year growth in 2013.”
Another area of growth highlighted by the report is Texas condominium and townhome sales, which was the fastest-growing segment of the housing market, increasing an average 10.5 percent in Texas’ four major metro areas in the first half of 2014.
“People are looking around and seeing that the single family market is so tight, inventory is so low, and they’re not going to get that great interest rate of five years ago, so they’re opting for condos and townhomes,” Connatser said. “At Dave Perry-Miller InTown, we have a lot of condo and townhome sales, so we know that it’s a growing market in our neighborhood, but it was intriguing to see that’s not just in Dallas, but across Texas.”
Because of the competitive nature of the market, tough lending standards, and low house inventory in North Texas and statewide, some homeowners are opting to remodel instead of move. Most popular are smaller, functional projects that boost curb appeal.
“A lot of people are looking a the competitive market and trying to purchase a home, and deciding not to fight that battle, to stay where they are and remodel, instead,” Connatser said. “It allows them to keep their low interest rates and build equity in the houses they already own.”
So what’s the forecast for 2015? Continued growth, according to the report and Connatser.
“We know that the job market continues to be strong, as well as the economy,” she said. “It should make you feel really good about Texas and the housing market not just or 2014, but going into 2015.”