With the overall U.S. housing market slowing down over the past few months, most major markets have cooled slightly. But prices and demand are still firm in some of the country’s hottest real estate markets. At their peak, these cities had more than 10,000 closed monthly sales.
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In addition, the recent surge in interest from foreign investors has helped many hot real estate markets see even steeper price growth over the last year or so. As long as supply remains tight and interest rates remain low, there’s no reason why prices can’t continue to skyrocket for years to come. We will take you through the top 7 reasons why the Houston real estate market is scorching hot.
Homes are Getting More Expableday
In the first quarter of 2021, the median home price in Houston rose by 14.4% from the same period in 2019. That’s the largest annual increase among all the major markets in the country. It’s also the biggest increase in home prices since 2019, when the real estate market crashed. This year, home prices have continued to rise at a steady pace.
The median home price in the Greater Houston area rose by 4.7% in May, according to the latest Houston Association of Realtors data. By contrast, home prices in nearby Dallas grew by just 0.8% over the same period, while prices in San Antonio rose just 1.8%. Home prices in Austin and Fort Worth, two other large Texas cities, are also rapidly growing.
Houston Has One of the Longest Housing Cycles
Over the past few years, homebuyers in many parts of the country have reached a new level of financial sophistication. They are now more likely to shop for houses with the help of a real estate agent, and they are increasingly willing to pay a hefty premium for a new home. Over time, this has helped push up home prices across the country.
For example, Houston’s average home for sale has been on the market for only 49 days. According to the latest data from RealtyTrac, this is one of the shortest homeownership times in the country.
At the same time, it’s a great time to purchase a new home since interest rates are still extremely low. So if you are planning to buy a house in the near future, save a single day on the market.
Foreign Investors Welcome to the Party
Foreign investors are flocking to the real estate market because they believe it is a good deal, and all Houston commercial real estate agent take advantage of that, even though it is risky.
After all, they can purchase real estate in the U.S. without obtaining a green card or a work visa. Instead, all they need to do is sign some paperwork and pay a small fee.
Moreover, thanks to the strong dollar, buying a home in Houston was even cheaper than it was a few years ago. For example, a $400,000 home in Houston would have cost $435,000 when the dollar was slightly more than 1.4 Mexican pesos.
But now that the dollar is worth more than 2.25 pesos, you can buy the same home for just $240,000. Moreover, you can also profit from the strong demand for new homes in the city since many first-time buyers have been priced out of the market. As a result, many homebuyers in Houston, including some foreign investors, have been interested in new homes and condominiums located in the most expensive parts of the city.
The Median Home Value in Houston is Surging
The median home price in the Houston metro area is climbing rapidly. In May, the median home price in Houston was $240,000, up from $210,000 in April. Likewise, the median home price in Austin rose from $280,000 to $290,000 over the same period. In fact, over the past year, the median home price in the greater Houston area has risen by 18.5%.
That’s the third-largest year-over-year increase in the country, behind only San Francisco and Salt Lake City. There are many reasons why homebuyer demand and home prices in the Houston area have been rising at such a rapid pace.
Also, a real estate agent in Houston has been booming for years now, thanks to an influx of retirees, foreign investors, and people from other parts of Texas seeking new jobs.
The current real estate market is unlike any other. Home prices are rising faster, interest rates are at historic lows, and foreign investors are flocking to the market. Moreover, top real estate agents in Houston predict this could continue for years. So prepare by researching the market, educating about homebuying strategies, and working on your financial plan. This way, you can ensure a plan is in place if the market downturned.