Texas Housing Market

According to Housing Predictor, the Texas housing market isn't immune to the national recession, but most areas have been much slower to see drastic drops in home values. However, Texas has more than its share of problems, including the drug wars, which could have a major impact in terms of housing values.

As the center of the U.S. oil business, Texas is experiencing more job layoffs in the energy business with less energy exploration and drilling rigs being idled due to lower prices being paid for oil. Foreclosures are rising and foreclosed properties are only projected to increase in coming years.

The fallout from the credit crunch will become abundantly clear in the Lone Star state. The drug wars along the Texas border will also impact the value of housing. In El Paso, on the extreme western side of Texas bordering Juarez, Mexico, the economy is just beginning to feel the impact from the Drug Wars in Mexico, which is expected to affect housing values on the most south west edge of the community.

Housing values could suffer as much as a 50% loss from violence associated with the drug cartels. Juarez saw 1,600 murders from drug violence last year. Job lay-offs are also affecting the economy, making it harder for many to pay their mortgages. For now, El Paso is forecast to see average housing deflation of 8.7% this year.

In the state's largest metropolitan area, Houston home sales have been on a dive for close to two years, but values in many areas of the market have held up remarkably for the time being. About a third of all home sales are foreclosures, and as foreclosures increase with the moratoriums expiring values will fall. More business failures, job losses and bankruptcies are hitting the state's largest populated area. The impact will have a devastating blow on the Houston economy, which is forecast to see average home prices deflate 9.8% in 2009.

Despite a huge drop in new home construction mortgage, the Dallas-Fort Worth area still ranks second in the country in new home sales. Houston tops the nation. But home sales are well off their record pace and home values are falling. Sales haven't slowed to a halt like in many other areas of the country, but increasing foreclosures will begin to have a more severe impact on the market over the next year.

With a loss in population in Dallas and an estimated loss of more than 300,000 residents statewide, Texas is hurting. The downward pressure will increase towards the end of 2009 and produce fewer home and condo sales. Housing Predictor forecasts that the average price of a home in the Dallas area will deflate 9.2% by year's end.

San Antonio home prices are on the way down, falling more than most areas of the state as a result of having the most over-built housing market in Texas. Increasing defaults in sub-prime and conventional remodel mortgages are troubling San Antonio, which could see the worst foreclosure rate in the state before it gets through the credit crisis.

Bargain priced properties listed by bankers are making it tough for other homeowners to sell these days. Home sales are projected to slow further in 2009 in San Antonio as fall out from the foreclosure epidemic hits with forecast deflation of 10.2% on the average home.

In some parts of Austin the market has remained fairly stable compared to other areas of the country. The rate of decline hasn't been magnified as much as areas that experienced double-digit housing inflation, bolstered by a strong high-tech business in Austin, and a youth culture that is doing everything it can to buy their first home. First-time home buyers are a large percentage of total home buyers in this area.