A stable Texas market
Web Posted: 01/18/2008 05:37 PM CST
Jennifer Hiller
Express-News Business Writer
Real estate is a mess nationally.
Perhaps you've heard. But in Texas, things look much tidier. The state warmed the bench while housing prices shot skyscraper high in states such as California and Florida between 2000 and 2006. But now, missing out on playing time in the big real estate game seems like a major victory for Texas instead of a disappointment. Home prices now are dropping in those states, but they're rising here. And thanks to job growth, population growth and affordable homes, Texas may be able to skirt the country's larger economic woes. "It's viable that if there's a national recession, Texas could take a pass," said James Gaines, research economist with the Real Estate Center at Texas A&M University. "That's what happened in the 1990s. There was a national recession, but Texas didn't feel the worst effects of that. So far Texas — knock on wood — has been doing so well." That's good for the stability of the state's housing markets, Gaines said. Although the number of real estate sales dropped about 7 percent statewide in 2007, Texas home prices rose about 3 percent. And the major cities in Texas saw housing prices rise between 2 percent and 7 percent, except for Fort Worth, where prices were flat between 2006 and 2007. While that's not spectacular performance, local real estate professionals are pointing to markets such as Riverside, Calif., where home prices are falling, and breathing a sigh of relief that the same hasn't happened here. "I think we're lucky to be in Texas," said Travis Kessler, CEO of the San Antonio Board of Realtors. "All real estate is local. The markets around Texas are performing well compared with different parts of the country." Across the state Housing statistics from Texas' big cities — Houston, Dallas-Fort Worth, San Antonio and Austin — dwarf the numbers from the smaller markets. That means that statewide statistics mostly reflect what's happening in the state's largest markets, Gaines said. But many of the small to midsized Texas cities also continue to have strong real estate markets. "They're not all doing the same thing," Gaines said. "But I think all of them have managed to show a positive price increase. We've gotten reports that some of the midsize towns: Wichita Falls, San Angelo, Odessa-Midland, Marble Falls and Abilene, had their best years ever in 2007." A strong energy market could continue boosting real estate prices in West Texas, but Gaines said that overall, Texas won't set any real estate records in 2008. He expects sales volume will slide about 5 percent statewide because fewer people can qualify for a mortgage loan now and many are worried about the national economy. "You're being bombarded every day by the national press about how bad things are," Gaines said. "There's a big psychological impact on the market. People are saying, 'I wanted to buy a house, but maybe I'll sit back and see what it's like in six months.'" Prices changing Despite the lower demand, the median home price in San Antonio reached $150,100 at the end of 2007, according to SABOR. That's the point at which half the homes sold at a higher price and half sold at a lower price. Last year, nearly one-quarter of all the homes sold in San Antonio cost between $120,000 and $160,000, Kessler said. "It's a very affordable price range for a large Texas city," Kessler said. New-home prices, too, have hovered in that range. More than 5,200 of last year's 12,600 new housing starts were for homes priced between $125,000 and $175,000 — by far the area's most popular price point, according to the housing research firm Metrostudy. And many home builders are targeting that market. Baron Houser, division president of Be Homes, is getting close to opening the Parc at Escondido on the Northeast Side of San Antonio, with prices from the $130,000s to the $180,000s. The 128-acre neighborhood will include a 28-acre park with basketball and volleyball courts, as well as a pool and fields for baseball and soccer. All of the homes will feature universal design, a building concept that makes homes accessible to people of all ages and abilities. "It is a lifestyle," said Houser, who is confident that the neighborhood will appeal to a range of buyers. "I think it will be the best investment we ever made."