There is uncertainty in the stock market, there is uncertainty in the economy, there is uncertainty in the Administration’s handling of the debt and the budget, and there is uncertainty in the likelihood of a military crisis. There is, however, a certainty with housing: People will always need a place to live, there will always be buyers, and always be sellers. Many of you reading this letter keep a watchful eye on our housing market because you own property, or plan to buy or sell. The devastation following the hurricane factors into our central Texas market in some predictable ways.
Pre-hurricane, home prices have been on the rise, due to reduced levels of inventory and continued demand in our area. We see many buyers struggling to find affordable homes, and builders rushing in to try to fill in for that starter home demand. Prices of resale and new homes have been on the increase across most price ranges. And yet, people still believe in both the vision of homeownership, and the quantifiable benefits, like healthier families, more stable communities, and building equity; so they continue to seek ways to buy. Innovative loans, ownership structures, and denser, mixed-use developments are all part of the adaptive mix we use to increase opportunities for homeownership.
Much of this will not change post-hurricane, but rather put more pressure on the systems we have in place now. We anticipate upward pressure on home pricing because there will be competition for good contractors and subs, which will slow builder schedules in the area. After Katrina, there were shortages of sheetrock that required builders to ship it all the way from Australia, for example. Lumber and concrete prices went up, and these became pass through costs because demand was high enough to warrant those increases. With people leaving hurricane-ravaged coastal areas, both temporarily and long-term, it seems reasonable to expect that central Texas will see and an influx of renters and home buyers.
After the fires in Bastrop, and the flooding following Katrina and Rita, we’ve observed that some people will stay in their damaged hometowns and try to rebuild, but many will not want to be part of that drawn out process. If people are relocating to start over, they tend to head to urban centers where jobs are available, so Dallas/San Antonio/Austin areas are all likely to see an influx of people. They will be across all socio-economic strata because some will move because they have to, and some because they prefer to.
Some particular takeaways we see are:
There are opportunities for investors purchasing or developing single or multifamily properties because demand for leasing will remain high.
If you are planning to buy a new home, sooner is much, much better than later, as your competition for properties will only increase, and your build times will extend. Additionally, rates have been low for an astonishingly long period, and the odds of them being much higher in the not too distant future is likely.
If you are looking to sell a home or investment property, this is an excellent time to give your property a wide base of exposure to the market. An active market like ours is ideal whether you are leaving the area, or maximizing your return on your sale and buying in a different location within the area.
Opportunities abound, so reach out to your Stanberry real estate professional to discuss the specifics of your situation with an educated advisor to help you make the best decisions for yourself.