What to Expect from Real Estate in South Texas
The real estate market in South Texas bears the aftershocks of a pandemic. It has been further affected by recent international affairs, fluctuations in the economy, and a tense political situation at home.
However, this does not mean that investments in real estate have fallen beyond recovery. Before you jump at the first chance to pick a house, take a quick look at the real estate scene.
We have summarized the present state of real estate in South Texas in five prominent trends as you can see below:
1. A growing population in an uncertain job market
Unlike New York or San Francisco, the cities of South Texas are witnessing a steady rise in population. Encouraged by job creation, these areas are acquiring residents in thousands. For instance, the job market in McAllen has more than doubled.
This is a piece of comforting news for investors for more people means more housing opportunities to invest in. But two to three months into 2020 has the population grappling with cuts in salaries and a volatile local market. Looks like real estate might just be a bit slow to pick up, now that the second wave of the pandemic has crashed upon the state.
2. Affordable housing
In spite of being among the best performing real estate markets in the US for 5 years in a row, housing has still been affordable. House building has been at an all-time high with the state getting the maximum number of permits in 2019 alone.
This was a boon for home builders, renters, realtors, movers, and a host of related professions. In the present scenario, the market is, however, showing signs of deceleration, with more and more people opting out of investing in new homes. This is not to say that people are not buying properties. With the right builder, you can still cut a fitting deal in the valley.
3. Declining in property listings
In the post-pandemic world, few people are listing their homes for sale. South Texas is staring at a decline of around 2 percent per month in home sales. Covid-19 has further increased the number of houses pulled back from the market.
Many homeowners have been unable to include their homes into the sales channel, on the other hand. In addition, the demand for new homes has fallen. The trend is seen in both single-family house sales as well as multiple-family properties.
Customers are wary of visiting homes and this soft demand has led to a crash in sales figures. Virtual showings have gained traction but sellers do not seem to be in the mood to hold open houses. There is a general air of gloominess among both buyers and sellers.
4. The rising rate of employment and the threat of recession
Experts predict that the rate of joblessness might push the double digit mark if the economy continues to fall. At this rate, South Texas could see a surging wave of recession. With faltering cross-border commerce, areas like the Rio Grande Valley may be forced to accept a sharp decline in house prices.
It remains to be seen how long residents can cope with a lack of jobs since being without one directly affects their spending power. Even after businesses pick up, homeowners would still have to deal with heavy mortgages. In such a situation, owners might try to sell off their properties at whatever prices they can manage and that’s when prices might actually begin to plummet. Otherwise, property prices tend to swing within a fixed range.
5. The Effect of Covid-19
One of the biggest factors affecting real estate is public health. The extent of the pandemic is yet to be measured and it might have far-reaching consequences for homeownership. With social distancing and related protocols in place, the general mood is discouraging to builders and investors.
Yet, Texas house sales figures are better than the national average in spite of a sluggish market. The final deciding factor is jobs after the population recovers. How quickly and steadily trade picks up will determine the future of real estate in South Texas.
While everything seems to be going south, an experienced realtor and builder should be able to find the perfect home for you. Whether you want to rent or build, we can connect you with the right property in the market that fits in with your style and finances.