Home Prices Continue to Rise in Texas
Texas has a reputation as being a place of opportunity where families can live well for less. However, rising land prices are contributing to higher home prices throughout the state. In the past, Texas was known for having comparatively low housing prices, namely because of the supply of affordable land. With this, the permitting and platting process has always been fast and efficient, making buying land and buying a home in Texas an attractive option for many.
Land is a contributing factor to a home’s overall price, which is why the tides are turning; land price growth is now exceeding home price growth, resulting in higher home prices and a very competitive market.
Over the last five to 10 years, there has been increasing demand for single-family homes in Texas. In fact, homebuilders have had a difficult time keeping pace with this increasing demand.
Not only is supply limited by the availability of land and labor constraints within Texas’ home construction sector, but more people are moving to the state than ever before. In Frisco, Plano, Dallas and the surrounding cities, numerous large corporations have moved in (such as Toyota).
This is great for the economy, but tough on the housing market. Furthermore, since 2012, Texas housing prices have risen faster than incomes. Let’s take a look at some other statistics to get a better idea of how the economy, housing boom, and rising land prices are contributing to the higher price tag on Texas homes:
- During the housing recovery, home prices in Texas exceeded the rest of the nation
- This pushed home prices to a record high
- Housing prices rose 43.8 percent in the second quarter of 2017
- Supply and demand has resulted in Texas’ rising home prices since the Great Recession
- Land accounted for 20.4 percent of the cost of single-family homes in Texas in 2016
- This is less than the nation’s 33.5 percent
- This number rose in the aftermath of the Great Recession
- Dallas has the largest share of land related to home cost (29.4 percent)
- Houston (25.1 percent), Fort Worth (22.4 percent), and San Antonio (15.2 percent) followed
Buying a Home in North Texas is More Difficult Than Ever
Over the last decade, trends have changed and we are now feeling the effects. While Texas was always known for having some of the cheapest land and housing in the nation, this is no longer the case. When land price growth exceeds home price growth, land price has more of an impact on the overall price of a home.
If you are trying to buy or sell a home in North Texas, but aren’t sure how to navigate the evolving market, please contact The Cheney Group. As the Mayor of Frisco, Jeff Cheney and his team of real estate agents know firsthand what changes are taking place within the economy, and how they are directly affecting home prices. To check out our current listings or learn more about how land prices are impacting the buying and selling process in North Texas, please give The Cheney Group a call today.