Are You Prepared for Houston’s 2021 Real Estate Market?
With the COVID-19 pandemic looming and its accompanying economic uncertainty, economists weren’t sure what to think about how real estate would look after the dust settled, but the Houston real estate market has remained strong. And in 2021, markets across Texas, especially in Houston, are forecasted to continue that momentum. With demand steadily increasing, low-interest rates motivating buyers, and rapidly rising home sale prices, real estate agents all across H-town should gear up for another scorching year.
2021 Houston Real Estate Outlook: Hot
As of December 2020, the average home in Houston was valued at $201,276, a 6.3% increase year-over-year. That figure is expected to increase as Zillow predicts the market will accelerate and rise another 9.9% within the next year. Rising prices, despite 2020’s challenges, are a promising sign that 2021 could be profitable for agents and sellers alike.
Additionally, home sales across Texas grew 5.1%, pushing the number of transactions to all-time highs. Meanwhile, the number of days properties spent on the market fell to a record low of 48 days. Thanks to historic low-interest rates and continued strong demand, Houston will likely be a seller’s market as 2021 unfolds.
Rent prices in Houston, on the other hand, have decreased -1.0% year-over-year but still remain affordable when compared to the rest of the country. A total of 1.1% of Houston mortgages were reported as 30-89 days delinquent. So, while new transactions continue to boom and Texas attracts many out-of-state residents, current homeowners will thrive as well.
2020 Houston Real Estate Market Data
|Zillow Home Value Index||$201,276|
|1-Year Change on Home Values||+6.3%|
|1-Year Change on Rent Prices||-1.0%|
|Homes With Negative Equity||1.6%|
|Delinquent on Mortgages||1.1%|
|Buyer’s or Seller’s Market||Seller's|
Market Insights for Houston
In November 2020, the Bureau of Labor Statistics reported that Houston’s unemployment rate was 8.9%, down from 9.5% in July. As it sits, Houston remains quite a bit higher than the national unemployment rate of 6.9%, but that’s likely to change as tourism and hospitality return to normalcy. Economic activity often correlates with growth in the real estate industry, and narrowing unemployment rates along with low-interest rates are a positive sign for agents the year ahead.
H-town also sports other attractive features that could positively impact their respective markets. Not only does Houston have one of the best dining scenes in the country, but the Lone Star State is also a hot spot for those with new remote work positions looking to escape the high taxes, hustle and bustle, and harsh winters of large northeastern cities. Expect inventory to stay steady while demand increases, which will keep prices high. Houston real estate, while still a great investment that affords its homeowners a high quality of life, will play out to be a strong seller’s market in 2021.;
With hopes that the vaccine, along with mask-wearing, can help stop the spread of COVID-19, and major investments from companies like Hewlett Packard Enterprises — who just moved their headquarters to Houston —- Houston real estate agents will need to be at the top of their game this year. Though Houston has a good supply of housing, buyers should still prepare for bidding wars. However, more buyers are looking to make Houston their permanent residence and are thus likely willing to pay more, which could push the market to new heights. With a myriad of opportunities on the horizon, there has never been a better time to help your fellow Houstonians find the property of their dreams.;
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