Let’s face it: 2011 hasn’t been quite the year of the Texas housing market rebound and recovery we had hoped. In fact, it looked way, way too much like 2009 and 2010.
So what about 2012? Will this year be the year when we finally see a real, robust, sustained housing recovery? We’ve seen a slew of positive signs recently, but there’s been several times in the past couple years when we thought the promised land was just over the horizon. So what could be different about this next leg of this journey through housing wilderness?
With the end of 2011 just around the corner, let’s begin taking a look at what housing markets in Austin, Dallas, and Houston might look like in the coming year.
Let’s start with the Texas A&M Real Estate Center’s monthly review of the state’s economy. According to the report, promising private sector signs indicate that a broader economic recovery might be forming:
Government job losses are slowing Texas’ employment growth rate but the state’s private sector continues to create jobs, offsetting government job losses. The state created 15.4 percent of total jobs created in the United States from October 2010 to October 2011.
The Austin-Round Rock-San Marcos metro area’s annual employment growth rate from October 2010 to October 2011 was 1.7 percent, ranking it 13th. The Dallas-Plano-Irving metro area posted an annual employment growth rate of 1.6 percent in October 2011. The metro area ranked 14th in employment growth rate. The Houston-Sugar Land-Baytown metro area posted an annual employment growth rate of 3.1 percent for the period and ranked 6th among Texas metro areas in employment growth rate.
Nationwide, CNBC notes that home prices are expected to lag behind the broader economic recovery and decline another five percent by the end of 2012. Part of this is due to the major backlog of delinquent loans that won’t be sorted out till things pick up steam again:
Prices are already on a downward trajectory, as foreclosure inventories rise. Banks/mortgage servicers are finally working through a huge backlog of delinquent loans, and as those distressed properties come to market, they will consequently lower home prices. With lower conforming-loan levels, as well as a tight lending environment and the possibility of rising mortgage rates, prices will bottom out in the fall.
Still, Texas is more primed for a robust housing recovery than most places. According to the Federal Reserve Bank of Dallas, Texas will hit its nadir early, allowing prices to begin rising more thoroughly as 2012 marches on:
Analysts at the Federal Reserve Bank of Dallas expect home prices to hit bottom by early 2012 as job growth expands in areas like Texas where comparably less overbuilding occurred in the decade leading up to the housing bust. They believe the negative impact of housing supply overhang has been overstated because the housing market is a regional business, where states with expanding job growth, such as Texas, could see a bottom soon, as economy recovers and the pace of household formation rises.
“Although the short-run outlook for the housing market is uncertain, it appears that new home construction and house prices at the national level will stabilize and start slowly recovering within the next year or so,” they said.
In other words, 2012 looks to be an uncertain year — but one arriving with plenty of cautious optimism. Whenever the time is right, we’ve got a slew of Dallas home loans, Austin home loans, and Houston home loans ready for you.
Kevin Miller, Owner & CEO of TexasLending.com. TexasLending.com provides expert service in the field of residential mortgages.