The Texas Real Estate Research Center released its 2023 Texas Economic Forecast, which points to high inflation and interest rates and a moderation of several growth indicators. The Center made clear these were “educated guesses,” given there are so many variables at play.
As far as real estate, the Center said existing home sales likely will be lower in 2023 than they were in 2022, due to higher interest rates and already-sustained price increases. The Center also pointed to a backlog of new construction homes coming on to the market that will put downward pressure on resale homes.
Home prices and rents will moderate. “The rapid pace of rent and purchase price appreciation over the last two years was never sustainable and would have been forecast to slow even in the absence of other headwinds,” stated the report.
Rural land has a similar forecast, with fewer transactions and lower demand. However, it noted prices for high-quality properties will remain steadier than lower-quality land.
The Center also stated Texas employment likely will continue a longer-trend rate of growth, following the recovery of jobs lost during the shutdowns.