2016 will be a good time to buy or sell a home in Texas, said Dr. Jim Gaines, chief economist for the Real Estate Center at Texas A&M University. While he conceded the market may slow compared to the boom it has experienced for the past few years, it only will be a cooling – not a stall.
He said low interest rates make the timing compelling for buyers but that limited inventory poses a challenge. “The only reason that it might not be a good year is some buyers may have a hard time finding what they want. We still have a shortage of existing inventory being listed for sale.”
This is indicated in Texas’ 3.1-month inventory supply as of January 2016, 3.4 months short of what is considered a balanced market.
He said, “You’ll have to work very closely with an agent or someone who is close to the market on a day-to-day basis, because in many of our markets properties are being grabbed up almost as soon as they come up for sale, often on the same day and with multiple offers.”
He said sellers probably will be able to get the prices they want, for at least the first half of 2016. “I think we’re going to see a slowdown in the housing market this year, but the market’s not going to stall.”
He believes builders will want to keep supplying new homes when overall demand slows and that this will help bring more balance to the market. Because of the evolving market conditions, “People will decide now’s a good time to buy or sell, maybe before interest rates go up. The market will end up more balanced than it’s been. Buyers will start finding that home prices won’t go up as fast and maybe some bargains will come out there.”
Read more in the “2016 Economic and Housing Outlook: Q&A with James Gaines.”