The State of Real Estate
Luxury home and condo sales drive banner year in Texas real estate
According to a year end report from the Texas Association of Realtors, Texas’ economic and population growth yielded significant gains in all areas of real estate over last year. The 2014 Texas Annual Housing Report shows these boosts were powered by international homebuyers, as well as increases in luxury home sales and condo and town home sales.
In Austin, the luxury housing market grew twice as fast as the housing market at large.
For starters, Texas gains more out-of-state residents than any other place in the country, and it’s near the front of the pack for international buyers, particularly from Mexico. More than 584,000 people moved to Texas from other states in 2013, for a net gain of 138,057 people, while international homebuyers are at a five-year high, contributing more than $11 billion to the economy in a 12-month period.
“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,” Dan Hatfield, chairman of the Texas Association of Realtors, said in a release. “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.”
Luxury homes priced over $1 million were a significant portion of the market’s growth. January 2014’s Texas Luxury Home Sales Report showed an average 35 percent year-over-year increase for luxury home sales in Texas’ four major metros: Austin, Dallas, Houston and San Antonio. In Austin and Houston in particular, the luxury housing market grew twice as fast as the housing market at large.
A lack of inventory — below the Real Estate Center at Texas A&M University’s balanced housing market level — drove up prices 5 to 10 percent, depending on the market, but housing development increased quarter-to-quarter in the second and third quarters of 2014. That’s the first time it’s done so in three years, and home sales should continue to grow in 2015 thanks to growth in stock.
With those high prices, however, condo and town house sales were the fastest-growing sector in 2014, growing 10.5 percent in the first five months compared to the same time period in 2013. They also spent 14 fewer days on the market compared to 2013 in the four major cities.
Even with the sub-optimal inventory, 2014 is on pace to outperform 2013 as the second-best year in home sales for the state.