Houston Housing Market Still Going Strong
Many predicted the Houston housing market would not be able to maintain its momentum with plunging oil prices and many layoffs in the energy sector. Fortunately, those predictions have turned out to be wrong, and Houston's housing market is continuing strong in 2016.
This is drastically different from the major oil crisis in the 1980's, when the tanking economy caused foreclosures to shoot up. This time around, Houston’s housing market is much more resilient with the total number of single-family home sales reaching the second-highest level of all time in 2015. Why are things different this time around?
The likely reason is Houston’s economy is far more diverse now than it was in the 1980's. During the 1980's crisis, 87% of Houston’s workforce was employed in the oil industry. Now, with a much more diversified economy, fewer than half of the jobs in Houston are tied to the oil industry. So, when the oil industry is in a slump, the impact is found mostly within the industry -- not in the economy as a whole.
A Slight Slump
The oil slump in 2015 did slow things down in Houston’s housing market a little, but only enough to stabilize it, which is actually a good thing. Before the slump, demand had been going at a pace that new home builders just couldn’t keep up with. Now the market is better for both homebuyers and new home builders with a much healthier balance of supply and demand.
Houston Job Growth
The good news for Houston is that job growth is still going strong, which means more people can afford to buy. With current employment at 2.78 million, the highest in Houston’s history, the housing market will only continue to expand.
Pent-Up Housing Demand
With nearly half a million new jobs coming to the area over the past five years, Houston experienced a big population growth. Having fully settled in the area, many of these people are now getting ready to buy new homes, which is increasing the demand on new home builders.
To meet the demand of this type of growth, the area should have been building about 33,000 new homes per year, but was actually building about 26,000. So, demand is naturally still very high.
Home Builders Responding
New home builders are meeting the demand by building homes priced in the lower end of the market. While affordable new homes in the $150,000 - $250,000 price range are going fast, there are still a lot of options to choose from in this price range in new home communities throughout the Houston area. Homes priced at $250,000 or more are selling at a more reasonable rate in the Houston and surrounding area.
Like always, get your ducks in a row before you purchase a new home. Make a list of what you want, get your finances in order, and research local new home builders until you find the one that works best with your needs and wants.