Is it 2007 Again in the Texas Housing Market?
There’s a lot of talk about today’s housing market being like 2007. In fact, many news outlets have shared sensationalized stories about the doom and gloom that’s to come.
At the Sales Team Realtors, we like to take a different approach. We provide market analysis based on three things: facts, data and insights from respected economists.
So, before you throw yourself into a panic over 8% interest rates and a possible market crash, let’s look at what the stats are showing us about the current Texas market.
Here’s a snapshot of the different markets we serve in Midland-Odessa and the Greater Fort Worth Areas:
If reading charts and graphs makes you fall asleep, here’s what’s significant about these numbers:
1 . Home prices aren’t dropping much (if at all)
In some markets like Parker and Johnson County, we’re actually seeing year-over-year appreciation in the 6% range. That’s huge! Most places in the country aren’t seeing appreciation like this. In other areas like Midland and Tarrant County, we’re seeing a slight dip in the -3% range year-over-year. While no one wants to see their equity drop, this is very far from what we’d consider a crash. Overall, houses are selling for over 95% of their original list price which is another indicator that prices aren’t dropping. In the aftermath of 2007, home prices plummeted 27% and no one is predicting that will happen any time soon.
2. Inventory is rising, but not enough to keep up with the demand
One thing that is REALLY different about today’s market is inventory is not building up like it did in 2007. While listings and inventory are up in the Greater Fort Worth Area, new construction has slowed and there are still a large number of sellers that have pulled back from listing their homes. This is the opposite of what we saw between 2005 and 2008. In fact, when prices peaked in August 2005, housing supply literally tripled in one year in many places. Prices weren’t all that impacted the first year, but in the background, there was a tidal wave of supply building.
3. Sales volume is down, but the right homes are still selling quick
With so much talk about the housing market slowing, I think it’s important to recognize things have still been moving historically fast, in Texas at least. It’s just not a 2021 speed. Keep in mind if interest rates start to dip (which they are predicted to do), we could see a sharp increase in the market speed. These graphs show us that sales volume is down but homes that are priced right and well maintained are still selling quickly and for full list price.
Tips to capitalize on the current market…
Buyers, waiting might cost you
Traditionally the fall months see a decline in the number of buyers actively searching for homes. However, the holidays combined with higher mortgage rates offer current buyers an edge in the market—less competition. Acting strategically and seeking expert advice can help buyers secure a home without competition driving listing prices through the roof. More buyers will flood the market once there’s any hint of mortgage rates dropping.
Sellers, benefit from low inventory and high demand
The Texas real estate market still has historically low inventory and high demand. So if you’re thinking, “I need to sell my house fast,” this is good news for you. A limited supply of homes coupled with high demand puts you in a strong position to sell your property quickly and potentially at a higher price.
You’ve sold your home—as well as your 3% mortgage rate. What now?
This is a common concern for people hesitant to list their home. If you sell now, how can you afford the payments on a new property? There are various programs and financial options that can ease the process of buying your home. The Sales Team Realtors will help you come up with a win-win strategy. When it comes to homes for sale in Midland, Odessa, and Fort Worth – we have you covered!
Closing thoughts
The current market may feel like 2007 with volume, but it’s an entirely different beast with low supply, intense competition, and very few foreclosures. Ultimately, it’s not accurate to call this 2007 because it looks and feels so different.
It’s also important to note that although people reference 2007 when there is any downward cycle, this isn’t the formula for every future market shift.
Yes, we have a market that feels stuck with a good chunk of sellers and buyers on the sidelines, but it won’t be this way forever. Our agents are here to guide you through every step of the journey. Reach out today to get connected to an experienced real estate agent at the Sales Team Realtors.