Experts are Expecting Another Banner Year for the DFW Market
Featured image: Ryan Michalesko / Staff Photographer for DMN
The Texas housing market had a “banner year” in 2019, and looks to be heading for another one, a top economist said at a recent seminar at the Federal Reserve Bank of Dallas.
Nine years after the housing market’s downturn, housing sales in Texas have returned to their pre-recession peak, said Jim Gaines, chief economist at the Real Estate Center at Texas A&M University.
“That prior peak was back right before the Great Recession,” Gaines said. “It was very artificial. It’s pretty easy to have a lot of home sales when anybody who could walk into a bank and fog a mirror got 110 percent financing.”
The Real Estate Center is predicting an increase in home sales in Texas of about 6 percent in 2020, which would beat the 4 percent increase in 2019, Gaines said. Home prices statewide are predicted to rise 5 percent to 6 percent in 2020, after increasing about 3 percent in 2019.
“We’ve had an outstanding decade, and the market is still really strong,” he said.
Population projections for the next 10 years call for the addition of 5.2 million Texans, including 1.6 million in Dallas-Fort Worth, 1.7 million in the Houston metro area, 622,000 in Austin and 563,000 in San Antonio, and the population and job growth are driving the housing market, Gaines said.
Last year, job growth weakened slightly in Texas, from 2.4 to 2.2 percent, as the energy industry declined and labor market constraints continued to suppress job growth, Gaines said. This year, less trade uncertainty is a positive, although the energy sector will remain a drag, he said. Election uncertainty may restrain business investment, he added.
Texas unemployment is at 3.5 percent, a tick lower than the 3.6 percent national rate, Keith Phillips of the Federal Reserve Bank of Dallas said at the seminar. The low national rate is making it harder for Texas companies to lure workers from other states, Phillips said.
“It’s a great time to be a worker,” Phillips said. “Not so much to be an employer.”