Do Texas homebuyers believe everything that they read? Let's hope not, or they might sit on the sidelines while waiting for the real estate bubble to pop.
Though many media sources have widely reported a residential real estate bubble that cound burst any day now, most real estate experts agree that property values are precariously high only in certain parts of the country. Arizona, California, Florida, Washington D.C., and a handful of other areas make that list. Texas, though, does not exhibit signs of an overheated market. For one thing, home prices have not jumped as dramatically as in some parts of the country; they have risen at about the same rate for more than a decade now. Also, the available inventory of homes for sale in the state has remained balanced and stable. (That's not to say there isn't some variation - just not wide swings; see Go Figure on the right side of this page.)
Many people, it turns out, have lost no sleep over the possibility of a |
real estate bubble. About three out of four homeowners in the U.S. who participated in a survey by ING Direct were not worries about a drop in home values during the next year. Those respondents predicted that their homes would appreciate, on average, 4% over the coming year. Another survey suggests that Americans do think a decline in housing prices is coming - just not in their area. The Experian-Gallup Personal Credit survey found more than 70% of people expecting a downturn, but more than half saying it won't happen in their backyard.
What to do if you run into prospects and clients worried about the health of the Texas market? Show them numbers and reports to the contrary. You can find such support from the Real Estate Center at Texas A&M (in their April 2006 Tierra Grande, for example), other real estate publications (such as this one), and even in some of the same newspapers that have so widely reported that home prices are overinflated.
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Go figure
Anyone who needed convincing that statistics vary widely from one part of Texas to another need only take a look at the months of inventory across the state.
+20%
Increase in months of inventory in Corpus Christi between May 2005 and May 2006
+1%
Change in months of inventory in Irving between May 2005 and May 2006
-33%
Decline in Months of inventory in Beaumont between May 2005 and May 2006
-14%
Decline in months of inventory in the entire state of Texas between May 2005 and May 2006
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