Texas continued to be a national leader in economic, population and housing market growth in 2014, yielding significant growth in all areas of Texas real estate over the last year, according to the 2014 Texas Annual Housing Report released today by the Texas Association of Realtors.
“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.”
Texas currently gains more out-of-state residents than any other state and is a leader in home sales from international buyers. The 2014 Texas Relocation Report released in October showed that more than 584,000 people moved to Texas from out of state in 2013, whereas September’s 2014 Texas International Homebuyers Report showed that home purchases by international homebuyers reached its highest level in five years, contributing more than $11 billion to the Texas economy in a 12-month period.
The Lone Star State’s rapid economic, job and population growth had a positive impact on multiple segments of the Texas housing market over the last year. The 2014 Texas Homebuyers and Sellers Report released in March reported that Texans’ median household incomes rose significantly in 2013, increasing 9.6 percent year-over-year to $91,700. This is nearly double the nationwide increase of 5.6 percent to $83,000 during the same time frame.
“Virtually every segment of the Texas housing market has benefitted from our state’s continued growth,” adds Hatfield. “Over the last year, however, we saw several areas of Texas real estate that were still recovering from the recession in 2012 really begin to take off in 2013 and 2014, including luxury home sales and housing development.”
Luxury home sales surged to become one of the fastest growing price classes ($1 million or more) within the Texas housing market. January’s 2014 Texas Luxury Home Sales Report reported an average 35 percent year-over-year increase for luxury home sales in Texas’ four major metros in 2013. Small land sales in Texas – many of which were used for ranchettes, vacation homes and recreational uses – were also strong, with 4,189 small land sales statewide in 2013, according to April’s 2014 Texas Small Land Sales Report.
Housing development picked up significantly over the last year, with new home sales in Texas outpacing those nationally by more than half according to the 2014 Texas Homebuyers and Sellers Report released in March. While the 2014-Q1 through 2014-Q3 Texas Quarterly Housing Reports continue to show statewide inventory levels that are approximately three months below the Real Estate Center at Texas A&M University’s balanced housing market level of 6.5 months, Texas homes sales in 2014 have kept pace with last year’s strong levels, putting 2014 on-pace to surpass 2013 as the second-best year in Texas real estate.
In addition, low inventory levels also drove Texas condominium and townhome sales to be the fastest-growing segment of the housing market, increasing an average 10.5 percent in Texas’ four major metros in the first half of 2014. As reported by the 2014 Texas Condominium Mid-Year Sales Report, condominiums were also a popular choice due to rising home prices statewide, which steadily increased between five and 10 percent during the year.
Despite this rapid market growth, tough lending standards and a competitive homebuying market caused some Texas homeowners to remodel their current homes instead of entering the market. The 2014 Texas Remodel Valuation Report showed that remodeling projects became increasingly more popular and profitable over the last year, with smaller, functional projects that boosted a home’s curb appeal yielding the most recoup costs statewide.
Hatfield concluded, “The Texas housing market will likely continue to be highly competitive in 2015, but rising housing development and inventory levels as well as greater access to homebuyer education programs like those promoted through Get Ready Texas will help make the dream of homeownership attainable for all Texans. This has been a glowing year for Texas real estate, and 2015 is on-pace to be just as bright.”