COLLEGE STATION (Real Estate Center) – According
to recent figures from the Office of Federal Housing
Enterprise Oversight, home prices in Texas increased
6.9 percent during first quarter 2007, well above the
4.3 percent national average.
“Despite the national slowdown,
Texas is still strong,” said
Dr. James Gaines, research economist with the Real Estate
Center at Texas A&M University. “There’s
no reason prices shouldn't continue to rise despite the
increase in foreclosures and the slowdown in transactions,
construction and new home starts.”
By comparison, home appreciation slowed
to 1.2 percent in California and 3 percent in New York.
Nevada price increases virtually disappeared at just
.6 percent. Even rapidly growing Florida and Arizona
reported value increases of 4.3 percent and 5.2 percent,
respectively.
Within Texas, there is a wide variation
in appreciation rates in the 25 metropolitan areas. Combined
with low interest rates, strong job growth and limited
supply on new housing in many markets, Gaines says some
of the appreciation rates are astounding.
“Among
the state’s large metro areas, Austin
and San Antonio are seeing the strongest rate increases
at more than 10 percent,” he said. “With
low levels of inventory and building permits off by over
20 percent in each community, it’s easy to see
why these two markets are humming.”
Meanwhile, the
energy industry is fueling strong housing markets in
some smaller metros. Home prices are up more than 21
percent in Midland and 16 percent in Odessa. Victoria
prices are up 8.3 percent.
Gaines said some border communities
are on fire as well, thanks to a surge in government
hiring and business activity. Laredo is up 16.6 percent,
while El Paso is up 11.2 percent.
While Texas seems to
be bucking the national trends in home price appreciation,
the Lone Star State shares the national phenomenon of
increasing foreclosure rates.
“Texas is no longer
making headlines as having the most foreclosures in the
country,” Gaines said, “but
rising foreclosures is still a source of concern for
all industries related to the housing market.”
The
Real Estate Center (recenter.tamu.edu) has been providing
solutions through research for 35 years. Funded primarily
by Texas real estate licensee fees, the Center was created
by the state legislature to meet the needs of many audiences,
including the real estate industry, instructors, researchers
and the general public. |
