Norada Real Estate Investments

How to Do Real Estate Market Analysis in 2023?

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Real Estate Market Analysis

Real estate market analysis involves evaluating the current market conditions and trends in a particular geographic area to determine the demand and supply of properties, as well as the overall economic conditions that may impact the real estate market.

You can gain a better understanding of market conditions and make informed investment decisions by conducting a comprehensive real estate market analysis. Because market conditions can change over time, it is critical to update your analysis on a regular basis.

Many investors frequently make the often damaging (or fatal) mistake of buying a property with little to no consideration of the neighborhood and market the property is in. This can be one of the greatest mistakes an investor can make because if you buy in the wrong neighborhood or market, you’ll be stuck with the problems that come with it because of its location. Your only option may be to sell the property at a loss.

I’ve literally seen dozens of investors buy nice rental properties that would impress most people, but they happened to be in distressed neighborhoods with blighted properties, and in depressed markets with high unemployment and a decreasing population. It is more important to be concerned about the overall market health and its future prospects than it is to get lost in the potential cash flow and other “numbers” on the property.

They’re all important of course, but purchasing based solely on the property without considering the bigger picture of the market and neighborhood is like trying to sail a ship against strong headwinds. If you don’t start with the right market and neighborhood, over time you will experience more tenant turnover, shorter lease terms, increased late payments/defaults, and decreased or negative appreciation.

How to Do Real Estate Market Analysis in 2023?

Here are the steps to conduct a real estate market analysis:

LOCAL ECONOMICS

There are several local economic factors you’ll want to consider before choosing a market to invest in. Evaluate factors like unemployment rates, population growth, and economic indicators to determine the overall health of the local economy. This will help you understand how the local economy is affecting the real estate market.

Employment Trends

Employment is one of the most important economic factors related to the current and future health of a market. Simply put, people who have jobs have the income to afford to pay their rent. Those that don’t will be able to afford to pay their bills, and may be forced to move to find new employment which often involves moving to another city. The Bureau of Labor Statistics (BLS) and the local chamber of commerce are good places to start for local employment data and trends.

Net Migration

Study the demographic trends in the area, including population growth, age distribution, and household income. Understanding the demographics of the area can give you a better understanding of the demand for certain types of properties. Are more people moving into the market or moving out? This has a major impact on the market as demand for housing increases and decreases based on the total population in a given market.

Take for example the Dallas, Texas market:

Texas has joined California as the only other state in the nation with a population of more than 30 million, according to new data from the U.S. Census Bureau. Texas' population has grown by 470,708 people since July 2021, the most in the country. Texas consistently ranks first in the bureau's annual population updates.

Net domestic migration accounted for roughly half of that growth (the number of people moving to Texas from other states), with the other half split almost evenly between net international migration and natural increase (the difference between births and deaths).

According to The Texas Demographic Center, 10 counties in Texas are projected to have 1 million residents by 2060. Harris County, home to Houston, will remain the most populous county by far, followed by Dallas, Bexar, Tarrant, Travis, and Collin counties, all of which already have more than 1 million residents. Denton County’s population is projected to hit 1 million in 2027, followed by Fort Bend County in 2035, Hidalgo County in 2041, and Williamson County in 2058.

This increased population growth creates demand for more local housing which helps push property values and rental rates up, in addition to an ongoing need for good residential housing stock. Be sure to put yourself on the right side of the trend.

Industry Diversification

A market with a diversified range of industries offers less market volatility in harder economic times or recessions. A market driven largely by one or two industries tends to be affected harder than more diversified markets and takes longer to recover afterward. Although many investors do well in “one trick pony” markets, it’s best to mitigate your market risk by focusing on markets with a broader employment base.

HOUSING MARKET

It’s good to know the condition of the housing market you’re looking to invest in. Evaluate local zoning laws. Research the local zoning laws to understand any restrictions or regulations that may impact the housing market. For example, zoning laws may limit the type of properties that can be built in certain areas.

Look at current market trends, including any changes in property values and sales volume, to get a sense of how the market is changing. Based on the information gathered, draw conclusions about the overall health of the market, the demand for different types of properties, and any potential risks or opportunities in the market.

Market Conditions

Are you in a buyer’s market or a seller’s market?

A buyer's market is what you get when there's more supply than demand. There are more people looking to sell houses than there are people looking to buy houses. In a buyer's market, sellers may have to accept a lower price than they want to sell their property and may have to resort to providing incentives. This is the ideal situation for buyers because they can get a better deal.

A seller's market is just the opposite. The demand is larger than the supply. People have more money to spend on real estate, so sellers will often see several buyers competing to buy their property, which drives up the price. This means that buyers will have to spend more to get what they want. This is the ideal situation for sellers because they often get a better price on their properties.

Median Price Trends

The median price (the midpoint between high and low) is often a very good proxy for indicating real-time market activity. As the median price changes, this can indicate key market movements.

A rise in median price means that sellers are responding to more sales in their local area which means that the local market might be “strengthening” or getting “hotter” – favoring sellers, so they will ask more for their home. A fall in the median price might indicate the opposite – few homes selling at the current price levels which causes homes on the market to drop their price and for new homes on the market to price more aggressively.

A rise in median price could also mean that homes in the lower part of the market are selling and leaving the market. This means that the remaining homes on the market are at a higher price point, which causes the aggregated median price to rise.

Market Inventory Trends

Inventory is simply real estate lingo for “the number of homes for sale.” This stat shows you how much supply is available in the market you are researching. Inventory levels can ebb and flow frequently due to seasonal effects. There’s usually more inventory on the market in the springtime as the natural rate of real estate activity picks up during this time of year.

Alternately, there’s generally less inventory in the fall or winter as real estate activity slows. Evaluate the current supply of properties, including the number of new construction projects, the amount of available inventory, and the amount of time it takes for properties to sell. This will give you an understanding of the overall level of competition in the market.

Average Days on Market (DOM)

Simply put, the Days-on-Market tells you how long the active properties currently for sale, in aggregate, have been on the market (a.k.a. “time on market”). In other words, of the active listings currently available for sale, how long have they been for sale?

This factor is the average number of days it takes to sell a house in the relevant price range. For example, a market in which a house sells for $150,000 in three weeks is quite different from a market in which the same house sells in six months. The latter is known as a soft market.

In a soft market, sellers can drop prices, give concessions, or wait longer for their houses to sell. The vast majority of homes are owner-occupied, so there’s generally no negative impact on sellers who can’t sell their houses because they can continue to live in them unless sellers are in dire need to move because of a foreclosure, job transfer, or another firm deadline, they’re likely to hold out to get their prices.

Study interest rates:

Review the current interest rates and their historical trends. Higher interest rates can impact the demand for properties and affect the overall market conditions.

TIP:  If you’re working with a good and reputable company to help you find or provide you with investment-grade properties then they should be able to advise you on the various markets and neighborhoods as well as provide you with detailed market information such as local economic data and housing trends.

California Housing Market: Prices, Trends, Forecast 2022-2023

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Will the California Housing Market Crash?

High-interest rates continued to dampen the sales in the California housing market. A brief reprieve from rising interest rates helped California house sales break a three-month sales slump in December, but they remained below the 250,000 mark for the second consecutive month. Home sales have fallen for 17 straight months year over year, and it was the fourth time in the last five months that sales dropped more than 30 percent from the year-ago level, according to the California Association of Realtors®.

Their report showed that there was an uptick in December’s home sales as buyers took advantage of a slightly more favorable lending environment. California home sales remained suppressed in all price points but sales at higher price points are falling faster. The price segment of $2,000k+ declined the most at 53% YoY. Pending sales improved on a monthly basis, inching up across all price points as mortgage rates cooled.

The median home price in California stayed on a decreasing trend for the fourth consecutive month and has been declining for six of the past seven months. December's median price of $774,580 was down 0.4% from November's median price of $777,500. The December price was also lower year-over-year for the second straight month, falling 2.8% from the $796,570 recorded in December of 2017.

California's typical home price climbed by 4.5 percent in 2022 compared to 2021's number of $786,750 but is projected to fall by 8.8 percent in 2023. As new active listings continued to decline to the lowest level in at least the last five years, the lack of housing inventory was the key factor stopping prices from plummeting.

<<<Also Read: Will the US Housing Market Crash? >>>

California Housing Market
Source: C.A.R.

“It’s encouraging to see an uptick in December’s home sales as buyers took advantage of a slightly more favorable lending environment that provided them with a window of opportunity to enter the California housing market,” said C.A.R. President Jennifer Branchini, a Bay Area REALTOR®. “As buyers and sellers gradually adapt to the new normal, we are seeing a shift toward a more balanced market. With both sides slowly adjusting their expectations, it’s hopeful that we’ll see sales ratcheting higher as market conditions improve further throughout 2023.”

At the regional level, all major regions recorded year-over-year sales drops of more than 35 percent, with Southern California incurring the biggest decline of all regions for the third month in a row at -48.3 percent. The Central Coast was the other region in the state with a drop of over 40 percent (-45.9 percent), followed by the Central Valley (-39.3 percent), the Far North (-38.3 percent), and the San Francisco Bay Area (-37.4 percent).

At the regional level, all major regions experienced a reduction in median home prices from a year earlier, with the San Francisco Bay Area suffering the largest annual price decline of 9.6 percent. All nine counties in the Bay Area witnessed a median price reduction year-over-year, with four of the nine counties experiencing a decline of more than 10 percent. The median price in the Far North decreased at a modest rate of -7.7 percent, followed by the Central Valley (-4.4 percent), Central Coast (-3.3 percent), and Southern California (-3.3 percent) (-0.9 percent).

  • San Francisco Bay Area had the highest year-over-year price decline of 9.6 percent, with the median price being $743,180.
  • Southern California had a year-over-year price decline of 0.9 percent, with the median price being $1,084,500.
  • The Central Coast had a year-over-year price decline of 3.3 percent, with the median price being $869,860.
  • The Central Valley had a year-over-year price drop of 4.4 percent, with the median price being $430,000.
  • The Far North had the highest year-over-year drop of 7.7 percent, with the median price being $350,000.
California Housing Market Report
Source: C.A.R.

California Housing Market Forecast for 2022

A supply-demand imbalance will continue to put upward pressure on prices, but higher borrowing rates and partial adjustment of the sales mix will likely limit the median price rise. Looking at the current market shift, C.A.R. has reduced its 2022 housing prediction. The supply constraints and higher home prices will bring California home sales down slightly in 2022, but transactions will still post their second-highest level in the past five years.

The California median home price is forecast to rise 5.2 percent to $834,400 in 2022, following a projected 20.3 percent increase to $793,100 in 2021 from $659,400 in 2020. Existing, single-family home sales are forecast to total 416,800 units in 2022, a decline of 5.2 percent from 2021’s projected pace of 439,800.

Housing affordability is expected to drop to 23 percent next year from a projected 26 percent in 2021. Furthermore, as the trend of remote working continues, a change in housing demand to more affordable places will keep prices in check and prevent the statewide median price from climbing too quickly in 2022, according to the CALIFORNIA ASSOCIATION OF REALTORS®.

Latest California House Prices & Sales Trends [December 2022]

California Real Estate Market Trends
Infographic Courtesy of CAR

Here are some of the key points of the California housing market report for December 2022, according to C.A.R.

Existing-Home Sales Trends

  • December’s sales pace was up 1.1 percent on a monthly basis from 237,740 in November.
  • It was also down 44.1 percent from a year ago when 429,860 homes were sold on an annualized basis.
  • For the year as a whole, statewide home sales were down 23.1 percent from 2021.
  • At the regional level, all major regions experienced sharp declines of more than 35 percent from last year.
California home sales
Source: CAR
  • Southern California had the biggest decline of all regions for the third month in a row at -48.3 percent.
  • The Central Coast was the other region in the state with a drop of over 40 percent (-45.9 percent).
  • The Central Valley (-39.3 percent), and the Far North (-37.4 percent) also posted sales declines of more than 35 percent from last year.
  • The San Francisco Bay Area (-37.4 percent) recorded the smallest sales declines among the five major regions in California.
  • Every C.A.R. county reported a double-digit sales loss from December of last year.
  • As mortgage rates doubled in 2022, sales in 43 of 51 counties fell by more than 30%.
  • Del Norte (-65.5 percent) had the largest sales drop in December.
California home sales trends
Source: CAR

California Home Price Trends

  • Sharp decreases in housing demand continued to push down home prices in all five major regions in California.
  • San Francisco Bay Area experienced the biggest price decline from last year at -9.6 percent.
  • All nine counties in the Bay Area witnessed a median price reduction year-over-year, with four of the nine counties experiencing a decline of more than 10 percent.
  • The median price in the Far North decreased at the rate of -7.7 percent, followed by the Central Valley (-4.4 percent), Central Coast (-3.3 percent), and Southern California (-3.3 percent) (-0.9 percent).
California home prices
Source: CAR
  • In December, two-thirds of all counties continued to see negative year-over-year price growth, with the median price in ten counties falling by more than 10 percent.
  • The county with the greatest yearly decline was Lassen (-41.8%), followed by Mono (-21.3%) and Napa (-19.2%).
  • In 16 counties, the median price was more than it was a year earlier, with three of those counties posting double-digit increases.
  • The county with the greatest annual price increase was Del Norte, with a 13.8% increase.
California condo price trends
Source: CAR

California Housing Supply

California Housing Supply Trends
Source: CAR
  • Housing inventory in California continued to rise from the previous year but dipped on a month-to-month basis as the year came to an end.
  • The statewide Unsold Inventory Index (UII) was more than double the 1.2 months recorded in December 2021
  • It was down from the 3.3 months registered in November.
  • The index indicates the number of months it would take to sell the supply of homes on the market at the current rate of sales.
  • All price categories experienced a 92 percent or greater increase in UII from a year ago.
  • With the $1 million and above price group experiencing the greatest increase (154.5 percent).
California Housing Supply By County
Source: CAR
  • In 47 of the 51 counties tracked by C.A.R., the number of active listings increased compared to December of last year, as a result of the dramatic decline in housing demand.
  • Thirteen counties experienced a year-over-year increase in the triple digits, with Marin leading the pack with a growth rate of 151.3 percent.
  • Only two counties saw a fall in active listings from the previous year: Del Norte with a 22.7 percent annual decline and Plumas with a 4.8 percent decline from last December.
California Regional Housing Supply Trends
Source: CAR

Median Days & Sales Price to List Price Ratio

  • The median number of days it took to sell a California single-family home was 28 days in December and 12 days in December 2021.
  • C.A.R.’s statewide sales-price-to-list-price ratio was 96.2 percent in December 2022 and 101.2 percent in December 2021.
  • It was below 100 percent for the fifth time since June 2020.
  • Looking at sale-to-list percentages can help buyers and sellers get a sense of how to negotiate prices.
  • A higher ratio of 100% or above shows a strong market favoring sellers.
  • The statewide average price per square foot for an existing single-family home was $377, down from $382 in December a year ago.
California Housing Market is Cooling
Source: CAR

California Housing Market Forecast 2023

Here's the California Housing Forecast for 2023 released by the C.A.R. on October 12, 2022. A modest recession caused by an ongoing battle against inflation will keep interest rates elevated to suppress buyer demand and contribute to a weaker housing market in 2023, according to a housing and economic forecast released today by the CALIFORNIA ASSOCIATION OF REALTORS®. High inflationary pressures will keep mortgage rates high, reducing purchasing power and lowering property affordability for prospective purchasers in the coming year. As a result, housing demand and prices will fall throughout 2023.

  • Existing, single-family home sales are forecast to total 333,450 units in 2023, a decline of 7.2 percent from 2022’s projected pace of 359,220.
  • California’s median home price is forecast to decline 8.8 percent to $758,600 in 2023, following a projected 5.7 percent increase to $831,460 in 2022.
  • Housing affordability is expected to drop to 18 percent next year from a projected 19 percent in 2022.

According to C.A.R.'s “2023 California Housing Market Forecast,” existing single-family home sales will fall 7.2 percent next year to 333,450 units, down from 359,220 units in 2022. The forecast for 2022 is 19.2 percent lower than the 444,520 residences sold in 2021. The median home price in California is expected to drop 8.8 percent to $758,600 in 2023, after rising 5.7 percent to $831,460 in 2022 from $786,700 in 2021. Next year's median price rise will be slowed by a less competitive housing market for homebuyers and a stabilization in the mix of home sales.

According to C.A.R.'s 2022 projection, the U.S. gross domestic product of 0.5 percent in 2023, after a projected uptick of 0.9 percent in 2022. With California’s 2023 nonfarm job growth rate at 1.0 percent, up from a projected increase of 4.9 percent in 2022, the state’s unemployment rate will edge up to 4.7 percent in 2023 from 2022’s projected rate of 4.4 percent.

Stubbornly high inflation and growing economic concerns will keep the average for 30-year, fixed mortgage interest rates elevated at 6.6 percent in 2023, up from 5.2 percent in 2022 and from 3.0 percent in 2021 but will remain relatively low by historical standards.

California Housing Market Forecast 2023
Courtesy of Car.org

Let us look at the price trends recorded by Zillow over the past few years. Since the last twelve months, California home values have appreciated by nearly 4.4% — Zillow Home Value Index. ZHVI is not the median price of homes that are sold in a month within a geographic region. It is calculated by taking all estimated home values for a given region and month (Also called Zestimates), taking a median of those values, and applying some adjustments to account for seasonality or errors in individual home estimates.

It, therefore, represents the whole housing stock and not just the homes that list or sell in a given month. By this calculation, the current typical home value of homes in California is $760,644. It indicates that 50 percent of all housing stock in the area is worth more than $760,644 and 50 percent is worth less (adjusting for seasonal fluctuations and only includes the middle price tier of homes).

  • Typical Home Value in California: $760,644 as of December 31, 2022
  • 1-year Value Change: +4.4%
  • 0.996 is the Median sale to list ratio as of November 30, 2022
  • 34.1% Percent of sales over list price as of November 30, 2022
  • 50.9% Percent of sales under list price as of November 30, 2022
California Home Values
Source: Zillow

California Housing Market Continues to Slow Down in January – Weekly Trends

According to C.A.R., with prices declining, consumers' assessments of their current status and expectations for the future improved, but remain historically low. And while the real estate market remains sluggish and fewer REALTORS® than in previous years are optimistic about future listings, sales, and prices, the most recent decline in mortgage rates has continued to stimulate mortgage application activity and offer optimism that the market may have already reached its bottom.

REALTORS® start the year less confident: REALTORS® expect the market to pick up in the new year, according to C.A.R.'s monthly member poll. As the home market continues to struggle, fewer of them are confident this year. The latest survey revealed the fewest share of respondents who expect listings would be up compared to the same month of the prior two years.

Despite quadrupling from December to January, the share of people expecting more sales was the lowest in three years. However, the 2.45% of REALTORS® who thought prices will rise behind the same month a year earlier by 43.85% while being the greatest share in the recent 6 months.

Rates fall, mortgage applications rise: As rates fell, mortgage applications rose 1.2% from the week before to January 6. Mortgage applications continue to fluctuate week-to-week due to interest rate adjustments. Despite a small interest rate relief, seasonally adjusted purchase applications fell 1% from the week before to the lowest level since 2014. Due to a large weekly rate drop, refinancing applications jumped 5%. As of January 12, the 30-year fixed-rate mortgage (FRM) averaged 6.33%, down from 6.48% the week before.

Is It a Good Time to Buy a Home in California?

The percentage of REALTORS® who believe sales will increase in the foreseeable future increased to 23.5%. Members indicate reduced demand, but a lack of listings keeps inventory reasonably tight. According to C.A.R.'s, 3.4% of REALTORS® polled believe that prices will increase and 23.5% think that sales will increase in the California housing market. The proportion of responders who think that listings will increase was 39.9%, an increase of 15.8% from the previous week.

California Housing Market weekly trends
Source: CAR

Weekly Real Estate Trends and Forecast in California [January 2023]

The California housing market sizzled last year to break all records. It was a hot seller’s real estate market. According to Zillow, at the state level, California’s housing market remains the most valuable in the country, with a total value of $9.24 trillion as of last December, accounting for more than a fifth – 21.3 percent – of the national total. However, California’s overall value growth of $1.38 trillion in 2021 represents only “20.1 percent” of the overall national growth of $6.9 trillion – somewhat “underperforming” by about -5.5 percent relative to its total weight, particularly given the extreme growth seen in other states.

Here's a rundown of the California housing market demand for the week ending January 14, 2022.

California Active & Closed Median Home Prices Trends

  • Existing SFR Active Listings = 32,000
  • Year-to-Year Existing SFR Active Listings Growth = 45.8%
  • Median New Listing Price = $710,000
  • Year-to-Year New Existing SFR Median List Price Growth = 1.6%
  • Month-to-Month New Existing SFR Median List Price Growth = 3.6%
  • Median New Listing Prices Per Sq. Ft. = $400
  • Existing SFR Median Closed Prices = $695,000
  • Year-Over-Year Existing SFR Median Closed Price Growth = 0%
  • Month-to-Month New Existing SFR Median Closed Price Growth = -0.4%
  • Existing SFR Median Closed Prices Per Sq. Ft = $397

California Housing Market Competitiveness

  • % of Active Listings w/Reduced Price = 41.5%
  • Median Reduction on Reduced-Price Listings % = -5.5%
  • % of Sales Closed Below List Price = 69.8%
  • Median Reduction on Reduced-Price Sales % = -6.3%
  • % of Homes Closed Above List Price = 19%
  • Median Overage on Homes Closing Above List = 2.6%
  • Median Days on Market for Closed Sales = 38
  • Median Days on Market for Active/Unsold Homes = 70
California Housing Price Trends
Source: CAR.org

Housing Affordability Trends in California – 3rd Quarter

Housing costs have been on the rise in California, which has impacted affordability. The CALIFORNIA ASSOCIATION OF REALTORS® reported that housing affordability in California rebounded in the third quarter, with the statewide index for existing single-family home sales inching up to 18 percent from a 15-year low of 16 percent in the second quarter of 2022.

According to C.A.R.'s Traditional Housing Affordability Index, the proportion of California homebuyers who could afford to purchase a median-priced, existing single-family home in the third quarter of 2022 increased to 18 percent from 16 percent in the second quarter of 2022 but decreased from 24 percent in the third quarter of 2021. In the first quarter of 2012, California had a peak affordability index of 56 percent.

California Housing Affordability Index
Source: Housing Affordability Index By C.A.R.

C.A.R.’s HAI measures the percentage of all households that can afford to purchase a median-priced, single-family home in California. C.A.R. also reports affordability indices for regions and select counties within the state. The index is considered the most fundamental measure of housing well-being for homebuyers in the state.

  • A minimum annual income of $192,800 was needed to make monthly payments of $4,820, including principal, interest, and taxes on a 30-year fixed-rate mortgage at a 5.72 percent interest rate.
  • Nearly 30 percent (27 percent) of California home buyers were able to purchase the $630,000 median-priced condo or townhome.
  • A minimum annual income of $146,400 was required to make a monthly payment of $3,660.
  • A minimum annual income of $192,800 was needed to qualify for the purchase of an $829,760 statewide median-priced, existing single-family home in the third quarter of 2022.
  • The monthly payment, including taxes and insurance on a 30-year, fixed-rate loan, would be $4,820, assuming a 20 percent down payment and an effective composite interest rate of 5.72 percent.
  • Despite the sizable quarter-to-quarter drop in median price, the share of households in California that could afford to buy a median-priced condominium or townhome continued to slide from last year as the cost of borrowing remained high.
  • Twenty-seven percent of California households earned the minimum income to qualify for the purchase of a $630,000 median-priced condo/townhome in the third quarter of 2022.
  • It required an annual income of $146,400 to make monthly payments of $3,660.
  • The third quarter 2022 figure was down from 37 percent a year ago.

References/Data Sources

  • https://www.car.org/
  • https://www.car.org/aboutus/mediacenter/newsreleases
  • https://www.car.org/marketdata/data/countysalesactivity
  • https://www.car.org/marketdata/marketforecast
  • https://www.car.org/marketdata/marketminute
  • https://www.car.org/marketdata/interactive/housingmarketoverview
  • https://www.zillow.com/ca/home-values
  • https://lao.ca.gov/LAOEconTax/Article/Detail/265
  • https://sf.curbed.com/2020/3/23/21188781/sf-housing-market-coronavirus-covid-19
  • https://www.ppic.org/publication/new-patterns-of-immigrant-settlement-in-california
  • https://fox40.com/news/business/local-real-estate-market-slows-amid-covid-19-pandemic
  • https://www.point2homes.com/news/us-real-estate-news/experts-california-real-estate-2020.html
  • https://www.washingtonpost.com/business/2020/02/27/mortgage-rates-head-back-down-coronavirus-fears
  • https://www.cnbc.com/2020/03/18/weekly-mortgage-applications-drop-over-8percent-as-interest-rates-jump.html
  • https://www.usnews.com/news/business/articles/2020-03-25/business-fallout-companies-in-china-see-delays-in-reopening
  • https://www.dallasnews.com/business/real-estate/2020/03/25/homeowners-who-cant-pay-their-mortgages-are-getting-help
  • https://www.wfsb.com/news/businesses-considered-essential-under-stay-safe-stay-home-policy/article_53f8e0d0-6d17-11ea-a04d-57ecbb72c518.html

Los Angeles Housing Market: Prices, Trends, Forecast 2023

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Los Angeles Housing Market
Data Source: C.A.R.

Are Housing Prices Going Down in Los Angeles?

We'll discuss the recent trends in the Los Angeles housing market. The market dynamics are changing now. After a two-year housing boom spurred in large part by record-low borrowing costs, the Los Angeles real estate market is now cooling down. There has been a decrease in house purchases and an increase in the number of homes for sale. Bidding wars have become less prevalent as a result of fewer buyers and more inventory, so buyers may have an easier time bidding around the asking price.

The median price in Los Angeles County peaked in September 2021 and has been on an up-and-down roller coaster since. It fell in July 2022, which was disappointing because it typically climbs from June to July; it even rose from June to July in 2009, when all hell had broken loose, putting this drop in a unique perspective. In December 2022, the median home price dropped 3.2% from the previous year and 4.4% from the previous month.

  • Los Angeles County's median home price in December 2022 was $799,670.
  • The median home price in November 2022 was $836,630.
  • Last year, in December, the median home price was $826,500.

C.A.R.’s resale report for December shows that at the regional level, sales in all the major regions of California dipped by more than 35 percent from a year ago. In Southern California sales declined the most at -48.3 percent. In Los Angeles County, the number of closed sales dropped by 47.7%. It shows that things are continuously becoming less hot as compared to the previous year due to higher mortgage rates.

The Los Angeles Metro Area posted a decline of -49.4% year-over-year in sales of existing single-family homes. The median home price in the Los Angeles metropolitan region was $716,500, 0.5% lower compared to December 2021. It was a decline of 0.5% from the previous month's price of $720,000.

Generally, a balanced market will lie somewhere between four and six months of supply. Inventory is calculated monthly by taking a count of the number of active listings and pending sales on the last day of the month. If an inventory is rising, there is less pressure for home prices to increase. With 4.1 months of supply left, it is still short of what economists say is needed for a balanced market. Hence, the Los Angeles County housing market will continue to see upward pressure on home prices.

  • Months Supply of Inventory (SFH) for Los Angeles County is now 3.1 months.
  • Months Supply of Inventory (SFH) for the Los Angeles Metro Area is 3.1 months.

Los Angeles Real Estate Market Trends

Los Angeles County home prices are still slightly higher than last year. The following Los Angeles housing market trends are based on single-family, condo, and townhome properties listed for sale on realtor.com. Land, multi-unit, and other property types are excluded. This data is provided as an informational resource only.

Based on last month's data, Los Angeles County was a seller's real estate market, which means that there are more people looking to buy than there are homes available for sale. A balanced market typically has a total sales-to-total listings ratio between 0.12 and 0.2. Markets with a ratio above 0.2 tend to favor sellers, while markets with a ratio below 0.12 tend to favor buyers.

There are around 217 cities in Los Angeles County where Realtor.com has active listings right now. They take into account two aspects of the housing market. The market demand is measured by unique viewers per property on their website, and the pace of the market is measured by the number of days a listing remains active on their website.

  • In December 2022, the median list price of homes in Los Angeles County was $824.9K, trending up 3.2% year-over-year.
  • The median listing price per square foot was $559.
  • The median price of sold homes was $770K.
  • The sale-to-List Price Ratio was 99.04%, which means that homes in Los Angeles sold for approximately the asking price on average.
  • A seller would prefer this ratio to be 100% or more.
  • On average, homes in Los Angeles sell after 64 days on the market.

If a region’s housing market is balanced it means that there is enough demand from buyers to equal the supply from sellers. Based on the supply-demand dynamics, the real estate appreciation rate in Los Angeles is predicted to remain slightly skewed on the sellers' side. The moderate demand but tight inventory should put upward pressure on the prices. Hence, the home values in the Los Angeles housing market could continue to appreciate over the next 12 months albeit at a very smaller pace as compared to the past two years.

Some economists forecast that house prices would tumble in 2023, but few, if any, foresee declines comparable to the Great Recession. In large part, this is due to the fact that foreclosures were mostly responsible for the previous significant decreases. Now, financing criteria are much stricter, and experts say that unless they are forced to, many homeowners prefer not to sell for less than their neighbor did a few months ago.

C.A.R.’s Dec 2022 resale housing report shows that in Los Angeles County, homes are still moving fast. The median days on market is 25.5 days. But the sales of existing single-family homes are massively down 47.7 percent from the previous year. If you’re looking to buy a house in LA’s real estate market, you may still end up paying slightly more than the asking price. The average sale price to list price ratio in LA was 97.0% in December. In December 2021, it was 102.1% and in Nov 2022, it was 97.3%. High mortgage rates are leading to less number of buyers bidding up the prices of homes.

  • The single-family median price went down by 3.2% YoY to $799,670.
  • Last month the median home price was $836,630.
  • Last year at this time the median home price was $826,500.
  • Single-family sales were down 47.7% YTY but were up 3.0% MTM.
  • The condo market also showed less buyer turnout.
  • Sales of existing condos were down 49.7% YTY and 6.1% MTM.
  • The median condo price in Los Angele grew slightly by 0.8% YTY to $564,250.
  • It was down by 2.7% from November's price of $580,000.
  • Last year at this time the median condo price in Los Angeles was $568,000.
Los Angeles Housing Market Report
Infographic Courtesy of CALIFORNIA ASSOCIATION OF REALTORS®

Are Home Rents Going Up or Down in Los Angeles?

The Zumper Los Angeles Metro Area Report analyzed active listings across the metro cities to show the most and least expensive cities and cities with the fastest growing rents. Rents in Los Angeles are higher than the state median rent. The California one bedroom median rent was $2,083 last month. Santa Monica was the most expensive city with one-bedrooms priced at $3,250 while San Bernardino was the most affordable city with one bedrooms priced at $1,490.

The Fastest Growing Cities in the Los Angeles Metro Area For Rents (Y/Y%)

  • San Bernardino had the fastest growing rent, up 29.6% since this time last year.
  • Burbank saw rent climb 24.7%, making it the second fastest growing.
  • Pasadena ranked as third with rent jumping 19%.

The Fastest Growing Cities in Los Angeles Metro Area For Rents (M/M%)

  • San Bernardino had the largest monthly rental growth rate, up 10.4%.
  • Santa Ana & Santa Monica rents both increased 5.9% last month, making them tied for second.
  • Torrance was third with rent climbing 3.4% last month.
Los Angeles Rental Market Trends
Credits: Zumper

Los Angeles Housing Market Forecast 2023

Los Angeles home prices could rise but at a slower rate. Los Angeles has a track record of being one of the best long-term real estate investments due to high price appreciation. According to some analysts, home prices in Los Angeles are unlikely to drop, but the rate of increase will moderate.

In other words, prices will continue to rise, albeit at a slower rate than in the preceding two years. The analysts argue that despite the recent rise in supply and decrease in demand, there is still a severe housing shortage and a big number of individuals who can and want to purchase a home.

Let us look at the price growth recorded by Zillow, a leading real estate marketplace. Zillow Home Value Index is an adjusted measure of the typical home value and market changes across a given region and housing type. It reflects the typical value for homes in the 35th to 65th percentile range. ZHVI also represents the whole housing stock and not just the homes that list or sell in a given month.

The typical home value of homes in Los Angeles County is currently $845,596. It indicates that 50 percent of all housing stock in the area is worth more than $845,596 and 50 percent is worth less than it (adjusting for seasonal fluctuations). Using this methodology, Los Angeles County home values have appreciated by nearly 3.0% in the last twelve months.

Los Angeles County Housing Market Insights

  • Typical Home Value: $845,596 as on December 31, 2022.
  • 1-year Value Change: +3.0%
  • 27 Median days to pending
  • 1.000 Median sale-to-list ratio
  • 40% Percent of sales over list price
  • 47.5% Percent of sales under list price

NeighborhoodScout.com's data also shows that in the past ten years, Los Angeles real estate appreciated 146.06%. This amounts to an annual real estate appreciation of 9.42%, putting Los Angeles in the top 10% nationally for real estate appreciation. During the latest twelve months tracked by them (2021 Q2 – 2022 Q2), Los Angeles' property appreciation rate has been hovering around 14.34% and in the latest quarter between 2022 Q1 – 2022 Q2, it has been 3.63%, which annualizes to a rate of 15.33%.

Tight supply and steady demand from home buyers have boosted home values across the Los Angeles metro area over the last two years. Prices rose steadily over the past year, despite the economic slowdown brought on by the pandemic. A large number of millennials entered their 30s in 2020, a trend that will continue for several years.

Home prices are trending higher and are more attractive for sellers in the current phase. Higher mortgage rates will decrease home sales and the pace of home price appreciation. Zillow's forecast updated predicts that LA Metro home values will decline by 4.7% from Dec 2022 to Dec 2023.

  • Los Angeles-Long Beach-Anaheim Metro home values have gone up 3.9% to $897,894.
  • The Los Angeles metro housing market forecast ending December 2033 is a bit negative.
  • Zillow predicts that LA metro home values may decline by 4.7% between December 2022 to December 2023.
  • If this forecast is correct, Los Angeles home prices will be lower in the 4th Quarter of 2023 than they were in the 4th Quarter of 2022.
Los Angeles Housing Market Forecast
Credits: Zillow.com

Is Los Angeles Housing Market Going to Crash?

Soem of housing analysts say that home prices in Los Angeles and Orange counties will fall by the middle single digits in 2023, while home prices in the Inland Empire would fall by the high single digits over the same time period. They anticipate that prices will continue to fall on a regional and national scale in 2024, but at a considerably slower rate, followed by a little increase in 2025. Compared to last year, home sales in December 2022 were down in all six counties of Southern California, with San Bernardino county recording the highest sales decline of 54.4% YTY.

Do buyers have any advantage? Is it the right time to buy a house in Los Angles? This is a never-ending question with no definitive answer. Buyers believe it is not a very good time to buy a home in Los Angeles due to rising mortgage rates and home prices. On the other hand, it is a good time to sell so you can expect more inventory due to increasing seller optimism.

More houses are expected to be listed in the coming months which may bring down the pace of appreciation to some extent. Affordability is a big issue in Los Angeles County as nearly three in four residents can’t afford to buy a median-priced home in the area. According to HousingWire, an index that combined median income and median home prices made Los Angeles the least affordable city in the country, and several younger residents said they were concerned they will never be able to afford a house. Home shoppers are leaving Los Angeles for cheaper metros, the most popular being Las Vegas.

Is Real Estate a Good Investment in Los Angeles?

Should you consider Los Angeles real estate investment? Many real estate investors have asked themselves if buying a property in Los Angeles is a good investment. You need to drill deeper into local trends if you want to know what the market holds for real estate investors and buyers in 2023.

Los Angeles is a moderately walkable city in Los Angeles County. It is home to around four million people. It is the largest city in California and the second-largest in the United States. Los Angeles Metropolitan Area is a 5- region that includes Los Angeles, Orange, Riverside, San Bernardino, and Ventura. The L.A. metropolitan area with over 13 million people rivals New York in population as the largest in the country. However, being a huge real estate market is not reason enough to invest here.

The Los Angeles real estate market is considered one of the premier markets for both investors and homeowners. It is also touted as the nation’s least affordable housing market. If you look in the long-term, it’s always a good investment to buy in Los Angeles. It is said that you will always get your money back or you would make a profit, as Los Angeles has a track record of being a great long-term investment.

According to Neighborhoodscout.com, a real estate data provider, one and two-bedroom large apartment complexes are the most common housing units in Los Angeles. Other types of housing that are prevalent in Los Angeles include single-family detached homes, duplexes, rowhouses, and homes converted to apartments.

Single-family homes account for about 40% of Los Angeles' housing units. In April 2020, the single-family homes posted their biggest percentage gains of the year so far in the Los Angeles metro area. House prices increased by 4.9% in Los Angeles County, 3.7% in Orange County, and 5% in the Inland Empire.

The Los Angeles housing market has been hot for years. In 2018, home prices in Los Angeles reached record heights, climbing to levels far above those recorded in the years leading up to the Great Recession. If we check historical data, in Los Angeles and Orange counties, year-over-year price increases peaked at 8.2% in April 2018 and have declined every month since. In October 2018, home prices in Los Angeles and Orange counties rose 5.5% over the previous year, according to the latest available data from the closely watched S&P CoreLogic Case-Shiller index.

A big factor, according to experts, is that many would-be buyers are increasingly priced out. But real estate agents also say a growing number of people who could buy, like Saavedra, have decided they don’t want to pull the trigger at the top. Home values in Los Angeles are up less than 3 percent since last year. After years of steady escalation, home prices in Los Angeles County are tapering off, according to a new report from CoreLogic.

They find that Los Angeles county’s median home price was $579,500 in January, down slightly from December’s median price of $581,500. That’s a 2.6 percent increase over the same time last year. By this comparison, prices shot up nearly 8 percent between January 2017 and January 2018. Prices continued to rise through much of 2018 but began to drop heading into Q4 2018. In Q4 2019, home prices were still slightly higher than a year earlier, but the spread has narrowed.

2018’s FRM interest rate increase decreased the principal amount homebuyers can borrow while making the same sustainable mortgage payment. The National Association of Home Builders and Wells Fargo Housing Opportunity Index have given the title of least affordable housing market to Los Angeles. In Los Angeles-Long Beach-Glendale region, only 11.3% of homes sold during the fourth quarter of 2019 were affordable to families earning the area’s median income of $73,100.

The 2020 pandemic had its impact on the market bringing down the rent prices while houisng prices reached record highs. Los Angeles real estate market isn’t the most affordable in the country, but it’s a market with ample investment opportunities for those who can afford the median price of over 700K.

However, this number doesn't apply to every part of the Los Angeles real estate market. There are some neighborhoods where prices are much cheaper and completion between buyers is much lesser. The high rate of appreciation has not prevented real estate investors from realizing a great return on investment. Instead of flipping rehabs, you should consider investing in rental properties.

Let’s find some factors that make LA a good place to invest for wealthy investors. We’ll address the biggest factor pulling people to the Los Angeles housing market next. In this section, we're not taking into account the short-term impact of the pandemic on the economy and housing market.

Los Angeles Hidden Real Estate Deals

Distressed sellers exist in every real estate market. If you do find an ideal property in the Los Angeles housing market, the increased selection of properties means you’re far less likely to end up in a bidding war. If you’re looking for other great deals, check out Vermont Vista, Hyde Park, Wilmington, and Cypress Park, where the asking prices are below the Los Angeles median price. In December 2020, the median list price of homes in Vermont Vista was $580K while the median sale price was $566K.

Foreclosures can be a great way to snap up Los Angeles real estate at a bargain price. Foreclosure rates, though, vary wildly. Note that for every home in foreclosure with the bank, there is probably another that is approaching that point and would be sold at a discount by a distressed seller who wants to avoid foreclosure. In distressed neighborhoods, fix and flip may be an option. So is buying Los Angeles real estate cheap and renting it out in a market starving for affordable rental units?

Single-Family Rental vs Multi-Family Investment

Years of appreciation have led Los Angeles real estate investors to favor rentals over flipping. This market favors rental property owners. In the city of Los Angeles alone, renters live in more than 600,000 apartments spread across 118,000 properties, according to the city’s Housing and Community Investment Department. In late 2019, California became the second state (after Oregon) to pass a statewide rent control law. It covers all multi-family rental units built more than 15 years ago. The state law applies on top of any stricter local ordinances.

Therefore, rent control applies to Los Angeles rental properties if they are multi-family units. Single-family detached homes rarely fall under rent control ordinances. They are generally not subject to LA Rent Control. The only exception is when two or more dwelling units are located on the same lot; then rent control rules are likely to apply. The simplest solution to this is to only buy single-family Los Angeles rental properties. Never buy a property with a separately rented granny flat or upstairs apartment you could rent out, as well.

On the other hand, homeownership rates in California have been declining for years. The sea change has been the growth of renting among the middle and upper classes. For example, a third of Los Angeles residents with incomes over $100,000 rent instead of own. Baby Boomers downsizing their homes choose to rent condos and homes that others maintain. Millennials who have a good income often say their parents lose their homes in the Great Recession and choose to rent instead.

This is driving demand for the luxury Los Angeles real estate market, whether condos, apartments with concierges, or luxury homes rented instead of purchased so that the resident can easily move if they lose their jobs. Only San Jose and San Francisco have more high-income residents that rent than the Los Angeles real estate market. Although apartment prices are high and rising, they’re lower in Los Angeles than in California.

That’s one bright spot in an otherwise tough rental market for Los Angeles renters. The Military also adds renters to the Los Angeles housing market. Any military base will pump renters into a real estate market. The Los Angeles real estate market is simply notable for having a large military population but a job market so diverse that the closing of a base won’t hurt the area’s home prices overall.

The Los Angeles AirPort Base, Edwards Air Force Base, and smaller facilities dump many renters into the Los Angeles housing market. Those with families often choose to rent Los Angeles rental properties instead of life on base. On top of that are defense contractors like Raytheon in Long Beach and El Segundo who pay people a premium to live here.

Current Rent Prices in Los Angels: Before the pandemic, the average rent for an apartment in Los Angeles was $2,524, growing by 2% YTY, according to RENTCafé. The average size for a Los Angeles, CA apartment is 792 square feet. 40% of the households in LA are renter-occupied while 60% are owner-occupied. Studio apartments are the smallest and most affordable, 1-bedroom apartments are closer to the average, while 2-bedroom apartments and 3-bedroom apartments offer more generous square footage.

As of Jan 15, 2023, the average rent for a 1-bedroom apartment in Los Angeles, CA is currently $2,395. This is an 8% increase compared to the previous year. Over the past month, the average rent for a studio apartment in Los Angeles decreased by -7% to $1,698. The average rent for a 1-bedroom apartment decreased by -3% to $2,395, and the average rent for a 2-bedroom apartment remained flat.

  • The average rent for a 2-bedroom apartment in Los Angeles, CA is currently $3,190. This is a 7% increase compared to the previous year.
  • The average rent for a 3-bedroom apartment in Los Angeles, CA is currently $4,378. This is a 4% increase compared to the previous year.
  • The average rent for a 4-bedroom apartment in Los Angeles, CA is currently $5,925. This is a 4% increase compared to the previous year.

Some of the most affordable neighborhoods in LA are:

  • Jefferson Park, where the average rent goes for $1,355/month.
  • El Sereno, where renters pay $1,396/mo on average.
  • Vermont Knolls, where the average rent goes for $1,445/mo.
  • Glassell Park & Cypress Park, where the average rent goes for $1,485/month.
  • Cypress Park, where renters pay $1,396/mo on average.
  • North Hills, where renters pay $1,530/mo on average.

Construction Isn’t Meeting Housing Demand in LA

The Los Angeles housing market has seen a bump in residential construction. This has helped to satisfy some demand from renters. However, due to increasing demand, the new supply hasn’t brought prices down. The current supply of existing single-family homes is 1.4 which is insufficient to meet the demand. This also suggests that any new wave of construction will at most result in rental rates remaining steady instead of causing them to fall.

The geography of this region also limits the supply. The Los Angeles metropolitan area is perched between the ocean and the mountains. You obviously can’t build on water. There’s only so far you can build into the hills when mudslides and earthquakes limit how much you can build there. The Los Angeles real estate market is further constrained by the vast national parks around L.A. like the Angeles National Forest. These areas simply cannot be turned into residential areas.

Two of the most fundamental economic indicators are employment and income. Home sales usually are directly tied to an economy's health and rise and fall with economic activity. As economies slow, the supply of money tends to become more restrictive. What makes Los Angeles unique is the employment market. Want to work in Hollywood? Move to L.A. Want to work for a production company or in fashion? Come to L.A. If rent is too high, share an apartment or single-family home with friends. In terms of home prices, income, and employment indicate whether people can afford current and future increases.

The Golden State added 310,300 jobs in 2019, a 1.8% increase, to a total of 17.61 million, according to data released by the California Employment Development Department. The previous year’s increase was 1.6%. In Los Angeles County, nonfarm jobs grew by 67,800 to a total of 4.65 million. That was a 1.5% rise, led by healthcare and social assistance (up 28,000) and construction (up 8,500). The unemployment rate was 4.4% in December, down from 4.7% a year earlier.

Note that due to the ongoing pandemic, Los Angeles County’s unemployment rate has increased. It fell to 11% in November from a revised 12% in October amid seasonal hiring gains in retail and logistics, according to the State Employment Development Department. It was 19.6 percent in April 2020. Every major sector of the county’s economy suffered significant job losses during the past 12 months, led by accommodation/food services, which shed 120,000 payroll jobs.

How to Invest in Real Estate in Los Angeles?

In any property investment, cash flow is gold. California has the 6th largest economy in the entire world. This is largely driven by its innovative production, the heavy tech sectors in the state, and more. The Los Angeles real estate market has many points in its favor beyond its sheer size. The strong market fundamentals make the Los Angeles housing market a good place to invest if you’re looking at buying real estate in California.

How good is it to buy a Los Angeles investment property? Not every real estate investor wants to enter the most expensive and competitive Los Angeles real estate market. For buyers, the affordability is dropping and only 30% of LA county residents own a home. Home Prices are so high and out of reach for many buyers – many consider LA homes grossly over-priced.

While Los Angeles home prices may be increasing slightly over the next year, the fact remains that there are many homes available at fair prices. Growing household formations, ongoing job creation, and rising wage growth are fueling housing demand,” said NAHB Chief Economist Robert Dietz. “But a record-low resale inventory, coupled with underbuilding as builders deal with supply-side constraints, continue to put upward pressure on home prices even as interest rates remain at low levels.”

There’s still a strong opportunity for rental property investment in Los Angeles. There is a strong and continuous demand for apartments for rent in LA. This is fueled by always tight inventory, severe competition from tenants, rising wages, and a good economy. Therefore, for a great opportunity for rental income for investors. Good cash flow from Los Angeles investment properties means the investment is, needless to say, profitable.

A bad cash flow, on the other hand, means you won’t have money on hand to repay your debt. Therefore, finding a good Los Angeles real estate investment opportunity would be key to your success. If you invest wisely in Los Angeles real estate, you could secure your future. The best investment is now looking for a rental property that will generate good cash flow. Your best tenants would be the retirees who intend to relocate to Los Angeles and want to purchase property to rent out.

The running costs for owning and managing a Los Angeles rental property should not be high. While hiring a property management company you should expect to give up roughly ten percent of the rent for each property they manage. Remember to factor this loss into your calculations when budgeting for a new rental property. The three most important factors when buying real estate anywhere are location, location, and location. The location creates desirability. Desirability brings demand.

There should be a natural and upcoming high demand for rental properties. Demand would raise the price of your Los Angeles investment property and you should be able to get a good return on your investment over the long term. The neighborhoods in Los Angeles must be safe to live in and should have a low crime rate. The neighborhoods should be close to basic amenities, public services, schools, and shopping malls.

A cheaper neighborhood in Los Angeles might not be the best place to live in. A cheaper neighborhood should be determined by these factors – Overall Cost Of Living, Rent To Income Ratio, and Median Home Value To Income Ratio. Los Angeles real estate prices are well above average cost compared to national prices. It depends on how much you are looking to spend and if you are wanting smaller investment properties or larger deals such as duplexes and triplexes in Class A neighborhoods. The inventory is low, but opportunities are there.

Even as Los Angeles home prices have reached new heights, the market remains attractive to residential real estate investors. As they continue to compete for potential investment properties at the lower end of the market, the challenges for first-time homebuyers will remain. The homebuyers won’t be able to outbid real estate investors and would end up renting.

Home prices in Los Angeles are well below the national average for all cities and towns in the United States. According to Realtor.com, there are around 107 neighborhoods in Los Angeles. Bel Air has a median listing price of $4.5M, making it the most expensive neighborhood. Downtown Los Angeles is the most affordable neighborhood, with a median listing price of $695K.

Investing in more affordable neighborhoods (at least some of them) can give you a bigger return on investment in a shorter period of time. Here are some of the best neighborhoods in Los Angeles for buying investment properties.

El Sereno is a densely urban neighborhood (based on population density) located in Los Angeles, California. It is a predominantly Latino neighborhood northeast of Downtown Los Angeles. It is bordered on the north by Highland Park and South Pasadena, on the east by Alhambra, on the south by East Los Angeles, and on the west by Lincoln Heights and Montecito Heights. The average rental price in El Sereno is currently $1,921, based on NeighborhoodScout's exclusive analysis. Rents here are currently lower in price than in 75.6% of California neighborhoods.

El Sereno real estate is primarily made up of small (studio to two bedrooms) to medium-sized (three or four bedrooms) single-family homes and small apartment buildings. Most of the residential real estate is occupied by a mixture of owners and renters. Demand for real estate in El Sereno is above average for the U.S. and may signal some demand for either price increases or new construction of residential products for this neighborhood.

What You’ll Pay in El Sereno: According to Realtor.com, in November 2022, the median list price of homes in El Sereno was $799.9K while the median sale price was $850K. Homes in El Sereno sold for 1.71% above the asking price on average. El Sereno is currently a buyer's market in November 2022, which means that the supply of homes is greater than the demand for homes. On average, homes in El Sereno sell after 52 days on the market. The trend for median days on market in El Sereno has gone down since last month, and slightly up since last year.

Wilmington is a neighborhood in the Harbor region of Los Angeles, California. Wilmington shares borders with Carson to the north, Long Beach to the east, San Pedro to the south and west, and Harbor City to the northwest. The community of Wilmington is one of the oldest in Los Angeles. It is a modern and progressive community with a long and proud history of being the gateway to Los Angeles and the rest of Southern and Central California. There are historical museums, military installations, parks, and waterfront attractions to visit. Click on the image below to see some postcard images from the past.

What You’ll Pay in Wilmington: According to Realtor.com, in November 2022, the median list price of homes in Wilmington, CA was $607.5K, trending up 1.7% year-over-year. The median listing price per square foot was $515. The median sale price was $645K. Homes in Wilmington, CA sold for approximately the asking price on average. Wilmington is currently a seller's real estate market.

Highland Park is a neighborhood in Los Angeles. It is bordered on the south and east by the 110 freeway and stretches west almost all the way to Eagle Rock Boulevard. The neighborhood is in the midst of a renaissance, which has made it an affordable alternative for young professionals who find themselves priced out of central Los Angeles. It has been undergoing gentrification over the last 10 years and has seen an influx of trendy shops and restaurants, new parks, nightlife, and vibrancy.

What You’ll Pay in Highland Park: According to Realtor.com, in November 2022, the median list price of homes in Highland Park was $999K, trending up 5.3% year-over-year. The median listing price per square foot was $762. The median sale price was $970K. Homes in Highland Park sold for 6.45% above the asking price on average in November. Highland Park is a balanced market, which means that the supply and demand of homes are about the same.

West Hills is a residential and commercial neighborhood in the western San Fernando Valley region of the City of Los Angeles, California. The percentage of residents aged 35 and older is among the highest in Los Angeles County. Historic landmarks and many city parks are to be found within the community, as are commercial districts, business districts, and religious establishments. Niche.com ranks it #42 in Best Neighborhoods to Live in Los Angeles.

What You’ll Pay in West Hills: In November 2022, the median listing home price in West Hills was $999K, trending up 11.1% year-over-year. The median listing home price per square foot was $540. The median home sold price was $940K. Homes in West Hills sold for approximately the asking price on average in November 2022. West Hills is a seller's market in November 2022, which means that there are more people looking to buy than there are homes available.

Mid City West is quite an appreciating neighborhood. For a prime city location, it's very safe, and in the residential areas, it's pretty quiet. This area is the true LA experience. It's diverse and much of it reaches into what people consider part of West Hollywood. Since 2012, property prices have appreciated every year in this neighborhood. The current typical home value in Mid City West is $2,114,656 and home values have gone up 4.7% over the past year.

What You’ll Pay in Mid City West: Rental properties in Mid City West are in high demand right. The average rent for a 1-bedroom apartment in Mid City, Los Angeles, CA is currently $2,195. This is a 22% increase compared to the previous year. Over the past month, the average rent for a studio apartment in Mid City increased by 7% to $1,595. The average rent for a 1-bedroom apartment increased by 10% to $2,195, and the average rent for a 2-bedroom apartment increased by 8% to $2,575.

Central City East is an affordable neighborhood in LA for buying an investment property. Since 2012, property prices have appreciated every year in this neighborhood. The typical home value in Central City is $758,445. Central City home values have gone up 2.1% over the past year. The competition is less (as of now) so you can negotiate the deal down to the standard.

If you think of investing in LA, you have decided on a long-term investment property. Here are the ten neighborhoods in LA having the highest real estate appreciation rates since 2000—List by Neigborhoodscout.com.

  1. W 21st St / S Orange Dr
  2. Irvington Pl / N Ave 51
  3. Montecito Heights Northeast
  4. N Ave 57 / Monte Vista St
  5. Happy Valley
  6. N Ave 52 / Granada St
  7. Highland Park
  8. Harvard Heights Southwest
  9. Highland Park North
  10. Apple St / S Dunsmuir Ave

As with any real estate purchase, act wisely. Evaluate the specifics of the Los Angeles housing market at the time you intend to purchase. Hiring a local property management company can help in finding tenants for your investment property in Los Angeles.

This article shouldn't be used to make real estate or financial decisions. Some of this article's information came from referenced websites. Norada Real Estate Investments provides no express or implied claims, warranties, or guarantees that the material is accurate, reliable, or current. All information should be validated using the below references. Norada Real Estate Investments does not predict the future US housing market. This article educated investors about LA real estate. Buying a rental property needs research, planning, and budgeting. Not all investments are good. Always do research and consult a real estate investment counselor.

REFERENCES

Market Data, Reports & Forecasts
https://www.car.org/marketdata/data/countysalesactivity
https://www.car.org/en/marketdata/interactive/housingmarketoverview
https://www.zillow.com/losangeles-ca/home-values
https://www.redfin.com/city/11203/CA/Los-Angeles/housing-market
https://www.realtor.com/realestateandhomes-search/Los-Angeles_CA/overview
https://www.zumper.com/rent-research/los-angeles-ca
https://www.zumper.com/blog/los-angeles-metro-report/
https://www.littlebighomes.com/real-estate-los-angeles.html

Covid-19 Impact/News
https://la.curbed.com/2020/2/28/21157988/home-prices-los-angeles-report
https://www.latimes.com/homeless-housing/story/2020-07-23/southern-california-home-prices

Best Neighborhoods and Statistics
https://www.zillow.com/
https://en.wikipedia.org/
https://www.neighborhoodscout.com/ca/los-angeles/real-estate/
https://www.mashvisor.com/blog/invest-los-angeles-real-estate-market-2019/

LA demographics
http://worldpopulationreview.com/us-cities/los-angeles-population

Rent control
https://www.latimes.com/archives/la-xpm-2007-dec-30-re-aptlife30-story.html

Foreclosures
https://www.realtytrac.com/statsandtrends/foreclosuretrends/ca/los-angeles-county

Rental market/Apartments
https://la.curbed.com/2019/2/4/18210857/los-angeles-rental-prices-2019-average
https://www.rentcafe.com/average-rent-market-trends/us/ca/los-angeles
https://la.curbed.com/2019/2/26/18241819/rent-vs-buy-los-angeles-high-income

Job & Unemployment Stats
https://fred.stlouisfed.org/series/CALOSA7URN
https://www.labormarketinfo.edd.ca.gov/file/month/la$pds.pdf

Military market
http://www.laalmanac.com/military/mi05.php
https://militarybases.com/california

Good time to buy/price predictions
https://la.curbed.com/2018/12/7/18128000/los-angeles-real-estate-market-prediction-2019
https://www.forbes.com/sites/ellenparis/2019/02/23/buyers-should-revisit-los-angeles-and-san-francisco-housing-markets-for-new-opportunities/#47bd1029428c

Austin Housing Market: Prices, Trends, Forecast 2023

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Austin Housing Market

Data by ABoR. Forecast by other sources.

The Austin Housing Market is Cooling Off

Austin's housing market is shifting. The market reflects what is happening in other major cities across the country. After reaching an all-time high of approximately $550,000 between April and May of last year, the median home price in Austin decreased to $537,000 in June. This trend indicates a slowdown in one of the nation's most overheated housing markets at the time. Zillow data indicates that Austin's median home price has continued to drop for six consecutive months.

The buyers have greater negotiating power than at any time since the pandemic. Properties take longer to sell and are being acquired for less than the initial list price on average. The market has just now gotten up to three months of housing inventory (2.7 months as of December), which is still short of the 6 to 6.5 months of inventory needed to be considered a healthy market. Austin home values are predicted to decline through 2023 amid continued skyrocketing interest rates and declining housing prices.

According to Goldman Sachs, Austin, Texas is one of the four cities in the United States that will likely see declines of over 25 percent in its housing market. These declines would be similar to those witnessed during the Great Recession in 2008. The decline is being attributed to the city's overheated housing market, which became detached from fundamentals during the COVID-19 pandemic housing boom. Austin has been previously named the second-most overpriced housing market in the nation and is considered the largest housing bubble in America. It shows that the localized risk of higher delinquencies for mortgages originating in 2022 or late 2021 still exists.

What's happening: According to the latest Central Texas Housing Market Report provided by the Austin Board of REALTORS®, in 2022, the median home price in the Austin-Round Rock MSA hit a new yearly record of $503,000. Despite this record, the housing market continued to tilt in favor of buyers as home sales decreased 18.3% to 33,547 homes sold last year and inventory climbed, with properties remaining on the market for 31 days, 11 days longer than in 2021.

  • In 2022, the median price in the MSA rose 11.4% to $503,000.
  • Sales dollar volume dipped 9.8% to yield a $21,018,159,929 impact on the Austin-area economy.
  • New listings stayed flat, and the year ended with 45,949 homes listed as pending sales dropped 24.2% to 31,633 homes.
  • In the month of December, closed listings across the MSA declined 31.5% to 2,435 year-over-year as sales dollar volume decreased 36.1% to $1,357,155,494.
  • The median sales price dropped 3.7% to $457,426.
  • New listings declined 15.1% to 1,828 listings, active listings skyrocketed 275.4% to 7,493 listings, and pending sales dropped 22.8% in December to 1,949 sales.
  • Last month, homes spent an average of 73 days on the market, 47 more compared to December 2021.

Real Estate Trends in Travis County – December 2022

Austin is the capital city of the U.S. state of Texas, as well as the seat and largest city of Travis County, with portions extending into Hays and Williamson counties. Data by ABoR revealed that in Travis County, residential home sales fell 23.8% to 15,705 in 2022, while dollar volume fell 16.1% to $11,556,937,031. The median price of residential properties rose 10.6% annually to $575,000.

In the previous year, new listings declined by 3.6% to 22,105, while active listings increased by 121.9% to 2,718 and pending sales decreased by 27.6% to 14,919. In December 2022, residential property sales in Travis County declined 44.9% to 984 purchases, while dollar volume decreased 47.8% to $649,319,748.

In addition, the median price declined 2.8% annually to $520,000. During the same time period, new listings decreased by 16.5% to 825, while active listings increased by 250.6% to 3,166 and pending sales decreased by 27.6% to 873. Monthly housing inventory increased by 1.9 months annually to 2.4 months.

Here are the housing market trends based on single-family, condo, and townhome properties listed for sale on Realtor.com. Land, multi-unit, and other property types are excluded. In Dec 2022, the median listing home price in Travis County, TX was $575K, trending up 8.5% year-over-year. Travis County, TX was a buyer's market in Dec 2022, which means that the supply of homes is greater than the demand for homes.

  • There are 29 cities in Travis County.
  • Barton Creek has a median listing home price of $3.5M, making it the most expensive city.
  • Hornsby Bend is the most affordable city, with a median listing home price of $349K.
  • The median listing home price in Austin, TX was $599K, trending up 8.9% year-over-year.
  • There are 92 neighborhoods in Austin.
  • Zilker has a median listing home price of $1M, making it the most expensive neighborhood.
  • Tech Ridge is the most affordable neighborhood, with a median listing home price of $425K.
According to a new study, Austin homes are among the most overvalued in the United States. According to the study conducted by researchers from Florida Atlantic University and Florida International University, homebuyers in Austin are paying nearly 51% more than expected for houses. The only metro area where homebuyers pay a higher premium is Boise, Idaho, where homebuyers pay an astronomical 81 percent more.

When Zillow released its latest list of the top ten hottest housing markets in the United States, Austin was no longer ranked number one. Zillow previously ranked Austin as the hottest housing market but that ranking has slipped several spots for 2022. It ranks Austin at #10 now. According to Zillow's 2022 forecast, Tampa is the year's hottest housing market, with the city expected to top the list due to its relative affordability and high job growth.

Austin Housing Market Forecast 2023

What are the Austin real estate market predictions for 2023? Despite cooling off from its peak. Austin will remain a seller's market despite nationwide inflation and rising interest rates. The prices continue to rise across Austin MSA. The main reason is strong in-migration and a rapidly recovering local economy. According to the Census Bureau’s 2021 population estimates, Austin's population is increasing by 146 people every day. This type of expansion places immediate and substantial demands on infrastructure, especially housing.

Austin's rapidly expanding economic industry is driving more people into the city which is increasing the housing demand. A number of reasons have affected the present situation of the Austin housing market, one of which is the high migration of firms and persons relocating to the city from Texas and out-of-state, which has led to a robust and varied economy that attracts people seeking opportunity.

A surge of people moving in, combined with rapid population growth and low mortgage interest rates, has turned Austin and its surrounding area into a sellers' market. Austin’s engine of job and population growth is not projected to slow down anytime soon—the biggest drivers of residential real estate demand. Its economy has diversified and strengthened over the past two decades.

Companies like Google and Tesla are moving operations to Austin. The software giant Oracle has also relocated its headquarters here. As more companies move here, that means more people looking for homes, and the city is also attractive to outside investors. With a steady influx of job creation in the pipeline, the housing market will continue to post strong numbers well into 2022. Big companies moving here will also play into what happens to the housing market.

With an all-time high in corporate relocations, the housing demand is way up and the supply side cannot match up. All these factors indicate that this region has a higher probability of withstanding economic downturns due to the current pandemic. To determine the best local real-estate markets in the U.S., WalletHub compared 300 cities of varying sizes across 24 key indicators of housing-market attractiveness and economic strength. They looked at factors like median home-price appreciation to home sales turnover rate to job growth.

The city of Austin's real estate market came in at number 7 overall and 3rd among large cities. Boise was found to be the best market in the nation, followed by Seattle, Frisco, Nashville, and Gilbert in the top five. Let us look at the price trends recorded by Zillow (a real estate database company) over the past few years.  The typical value of homes in Austin is $619,096. Since the last twelve months, Austin's home values have appreciated by 0.1%.

NeighborhoodScout's data also shows that Austin real estate has appreciated 196.13% over the last ten years, which is an average annual home appreciation rate of 11.47%. This figure puts Austin in the top 10% nationally for real estate appreciation. During the latest twelve months (between 2021 Q3 – 2022 Q3), Austin's appreciation rate was 19.10%.

In the latest quarter (between 2022 Q2 – 2022 Q3), Austin's appreciation rate has been 6.82%, which annualizes to a rate of 30.20%. However, higher mortgage rates mean it's more difficult to afford a home now, but the reduced demand also means less competition. Therefore, the appreciation will remain very modest in 2023 depending on how the mortgage rates trend. For long-term investment, you cannot underestimate Austin. Investing in a rental property for the long term would build your equity and also generate cash flow through rental income.

Here's Zillow’s housing market forecast for Austin-Round Rock Metro. The Zillow Home Value Forecast (ZHVF) is the one-year forecast of the Zillow Home Values Index (ZHVI). ZHVF is created using all homes, mid-tier cut of ZHVI and is available both raw and smoothed and seasonally adjusted. Austin-Round Rock Metro's home values are expected to drop by 1.8% between December 2022 and December 2023. According to their forecast, the supply and demand dynamics will likely push down prices over the next 12 months.

These numbers can be positive or negative depending on which side of the fence you are — Buyer or Seller? In a balanced real estate market, it would take about five to six months for the supply to dwindle to zero. In terms of months of supply, Austin can become a buyer’s real estate market if the supply increases to more than five months of inventory. And that’s unlikely to happen in the near future. The inventory in Austin MSA is still short but with inventory steadily increasing, right now is a great time to be a homebuyer in Central Texas.

Austin Housing Market Forecast
Source: Zillow

Is Austin Texas Good for Real Estate Investment?

Should you consider Austin real estate investment? Many real estate investors have asked themselves if buying an investment property in Austin is a good investment. You need to drill deeper into local trends if you want to know what the market holds for real estate investors and buyers in 2023. Let’s discuss a bit about the Austin metro area and then do a quick recap of how its housing market performed during the pandemic.

Austin is a minimally walkable city in Travis County with a population of approximately 790,195 people. It is the capital of Texas and it is growing at a fast clip. It is the fourth largest city in the state of Texas. The Austin real estate market isn’t the largest in the state of Texas, but there are several reasons to consider buying real estate in this city. The Austin housing market has gained a lot of steam, with home values almost doubling since 2010. It isn’t as big as Dallas, San Antonio, or Houston.

However, the Austin housing market is sizable – it is the eleventh largest city in the U.S. as of this writing, and it is the center of a large metro area. Austin has come up as another tech hub in the last 5 to 6 years. There are tons of high-paying tech jobs that moved to Austin in the last couple of years. The Austin-Round Rock metro area is home to about two million people. Recently Austin was ranked eighth for the best real estate markets, topping all other big Texas cities.

As per Neigborhoodscout.com, a real estate data provider, one and two-bedroom single-family detached homes are the most common housing units in Austin. Other types of housing that are prevalent in Austin include duplexes, rowhouses, and homes converted to apartments. Single-family homes account for about 46% of Austin's housing units.

According to ABoR, Austin's competitive housing market is changing the landscape of traditional homeownership. More homebuyers purchase condos and townhomes to live closer to the urban core or stay within their budget. Austin has been one of the hottest real estate markets in the country for many years. It has a record of being one of the best long-term real estate investments in the U.S. over the past 10 years.

It is currently a moderate seller’s real estate market. Austin's immense population growth during the past decade has heavily impacted its real estate market. Although this article alone is not a comprehensive source to make a final investment decision for Austin, we have collected ten evidence-based positive things for investors who are keen to buy an investment property in Austin. Texas is unique for having a biannual legislature. They don’t have the state legislature in town year-round. Instead, they are only in session for several months every two years.

This leads to an influx of legislators, reporters, and lobbyists every other year. This creates a unique but predictable boom and bust for the Austin housing market in the vicinity of the capitol building. Let’s look at the state of the Austin real estate market and the factors driving the market in the short and long term.

Is Austin Housing Market In A Bubble?

Austin is one of only eight U.S. metro areas to have fully recovered in the last 10 years to pre-recession values. Would Austin remain as one of the top real estate markets in the country or would the bubble burst? Well, Austin isn’t considered to be in a real estate bubble because the demand is consistently high and inventory is very tight. This is good news for investors because you can expect steady activity and the flow of people looking for housing.

In 2019, Austin continued to rank high on “Best of U.S.” lists. There was a record number of home sales in 2019. The December and Year-End 2019 Central Texas Housing Market Report reflects a record-breaking 33,084 home sales and $13B in sales volume. According to the Austin Board of REALTORS® (ABoR), between 2010 and 2019 home sales increased by 84%. The median home price in Austin has increased from $193,520 in 2010 to $318,000 in 2019, and the market did not show any signs of slowing down from 2020 to 2021.

The price of Austin properties declined following the 2007 peak while prices remained relatively flat following the 1995 and 2000 peaks. According to a report published on Williamskw.com, Austin will remain a seller's market in 2022 despite higher mortgage rates. The National Association of Realtors (NAR) suggests a “balanced” market is between 4-6 months of inventory. The entire Austin market is around 0.5 months. Austin inventory levels did increase in March 2022, yet not nearly enough for Austin to be a “buyers” market. That is not expected to change.

As Austin is a young city by many standards, Millennials will be the largest buying force in Austin in the upcoming years. This is going to be more attractive for the areas being close to neighborhood amenities and close by shopping & hang-out spots. Real estate industry experts think that there is no bubble. Austin's economy is strong and varied. Overall there is a huge scarcity of homes for sale in Austin. It just hasn't kept up with the pace of people moving here.

Austin's Affordable Real Estate & Certain Future Appreciation

Homes in Austin are 23% cheaper than the national average. It may be the second most expensive housing market in the state with a median home price of around $461,000, but it is still far cheaper than California or New York. Buy up condos or townhomes, and you’ll be able to see a sizable return on the investment.

An author in Forbes wrote in 2016 that Austin real estate is appreciating at one of the highest rates in the state because of NIMBY-ism, a reluctance to develop the riverfront or Texas hill country to build new homes. This has pushed development out along the highway and forced dense development in areas already zoned for housing.

This pushes up the price of existing homes, driving many in the Austin housing market to rent when they want to buy, while it guarantees capital gains for those who buy and hold property. Here are the ten neighborhoods in Austin having the highest real estate appreciation rates since 2000—List by Neigborhoodscout.com.

  1. East Cesar Chavez / Holly
  2. Chestnut
  3. Central East Austin
  4. Govalle
  5. Holly West
  6. Central East Austin South
  7. Rosewood
  8. Johnston Terrace
  9. Springdale / MLK-183
  10. MLK

Cost of living In Austin

The Austin-Round Rock metro area is home to about two million people. The city is known as a haven for live music, free thinking, and free spirits. It has a distinct culture and flavor compared to the rest of Texas, which is a mostly conservative and traditional state. According to WalletHub, among large U.S. cities, Austin ranked eighth, topping all other big Texas cities as well as San Jose, Atlanta, and Portland. Among all 300 cities, Austin still ranked a respectable No. 36 for best real estate markets.

One of the factors driving the Austin real estate market is the intangible but well-documented quality of life the city provides. In 2017, US News and World Report ranked the city first for quality of life. In 2016, Austin was ranked first on the Forbes list of Cities of the Future list. In 2017, that same magazine ranked the South River City neighborhood as one of the best for Millennials. WalletHub ranked the city sixth in their list of best places to live in 2017. In 2012, the FBI ranked Austin as one of the safest cities in the country.

Aside from high housing prices, the cost of living in Austin is relatively affordable. Overall, the cost of living for Austin is very reasonable. At three percent below the national average cost of living, moving to Austin may be an economical choice for you. One of the most interesting factors in the cost of living for Austin is that the cost of housing is 15 percent below the national average.

According to Sperling’s Best Places, grocery costs in Austin are slightly below the national average, with a rating of 89.1 against the U.S. average of 100, meaning it is about 11 percent lower than the national average on groceries.

The sales tax rate in Austin is 8.25 percent. There are no income taxes in Texas. Schools are largely funded through property taxes, which rise along with home prices. As home prices continue to skyrocket and people are increasingly forced to move to the distant suburbs to find affordable housing, a massive reworking of Austin’s building codes, known as CodeNext, promised to deliver some relief.

The median salary in Austin, TX is $51,596 and it is the 108th most expensive city in a database of 232 cities by NerdWallet.com. For a 2-bedroom apartment, the median rent per is $1,184. The median price for a 3/2 bedroom house is $276,634. Food and entertainment costs in Austin are reasonable. Redwood Austin is the area with the lowest cost of living.

Areas With The Lowest Cost of Living in Austin – (List by Niche.com & prices by Livability.com)

  1. Redwood, Texas – Located in Guadalupe County. The median income in Redwood, TX is $47,778 and the median home value is $54,700.
  2. Lockhart, Texas – Located in Caldwell County. The median income in Lockhart, TX is $48,884 and the median home value is $115,400.
  3. Martindale, Texas – Located in Caldwell County. The median income in Martindale, TX is $43,929 and the median home value is $151,200.
  4. Uhland, Texas – Located in Hays County. The median income in Uhland, TX is $40,662 and the median home value is $78,100.
  5. Taylor, Texas – Located in Williamson County. The median income in Taylor, TX is $42,793 and the median home value is $116,600.
  6. Lago Vista, Texas – Located in Travis County. The median income in Lago Vista, TX is $75,126 and the median home value is $189,400.
  7. Elgin, Texas – Located in Bastrop County. The median income in Elgin, TX is $50,369 and the median home value is $104,000.
  8. Hornsby Bend, Texas – Located in Travis County. The median income in Hornsby Bend, TX is $49,077 and the median home value is $123,000.
  9. Round Rock, Texas – Located in Williamson County. The median income in Round Rock, TX is $72,412 and the median home value is $179,900.
  10. Wimberley, Texas – Located in Hays County. The median income in Wimberley, TX is $59,167 and the median home value is $214,600.

Austin's Massive Student Population Propels The Rental Investment

Many people want to invest in the Austin real estate market because there is a massive student population that will rent properties for a premium if they’re within easy commuting distance of the University of Texas Austin campus. That school alone has more than 40,000 students. The Austin community college hosts about as many students as UT Austin. Huston Tillotson University, Saint Edward’s University, and National American University are also located in this city.

Positive Demographic Momentum of Austin: About half of Austin’s population is between 18 and 44, though that figure is skewed by the large student population. However, the reality is that many college graduates choose to stay here because of the abundant, well-paying jobs. After all, Austin has the highest per capita of high-paying jobs of any Texas city. This helps explain why the Austin housing market is growing at the fastest rate of any major city in Texas. Many of these young adults are starting their families here, creating certain future demand for housing in the Austin real estate market.

Rental Market Statistics: Before the pandemic, the average rent for an apartment in Austin was growing at 5% annually (Source: RENTCafe). 48% of the households in Austin are renter-occupied which is a significant population. More than 65% of the apartments can be rented for $1,500 or less. Around 20% of the rental apartments fall in the price range of $1,500 to $2,000 while only 10% of the apartments fall in the rent price range of $2,000 or more.

The average size for an Austin, TX apartment is 864 square feet with studio apartments being the most affordable. 1-bedroom apartments are closer to the average, while 2-bedroom apartments and 3-bedroom apartments offer more generous square footage.

As of January 15, 2023, the average rent for a 1-bedroom apartment in Austin, TX is currently $1,650. This is a 4% increase compared to the previous year. Over the past month, the average rent for a studio apartment in Austin decreased by -6% to $1,125. The average rent for a 1-bedroom apartment decreased by -1% to $1,650, and the average rent for a 2-bedroom apartment decreased by -3% to $2,031.

The Zumper Austin Metro Area Report analyzed active listings across the metro cities to show the most and least expensive cities and cities with the fastest growing rents. The Texas one bedroom median rent was $1,159 last month. Austin was the most expensive city with one bedrooms priced at $1,680 whereas San Marcos ranked as the most affordable city with one bedrooms priced at $1,280.

The best place to buy rental property is about finding growing markets. Cities like Round Rock, Cedar Park, and Pflugerville are good for investors looking to get started with rental property ownership at an affordable price. These cities look good for rental property investment this year as rents are growing over there. These trends provide a macro look at the growing rental demand. Each real estate market has its own unique supply-demand dynamics with unique neighborhoods that present their own opportunities for investors.

Here are the best areas to invest in a rental property in the Austin Metro Area. Most of these places have the same things in common, including rising rents and increasing property values. The Most Affordable Neighborhoods in Austin are University Hills where the average rent can go for $795/month, Heritage Hills, where the average rent can go for $795/month, and Windsor Hills, where the average rent can go for $833/month.

Where are rents growing fastest in Austin Metro Area (Y/Y%)

  • San Marcos had the fastest growing rent, up 19.6% since this time last year.
  • Kyle was second with rent climbing 14.2%.
  • Austin ranked as third with rent increasing 13.5%.

The Fastest Growing Cities For Rents in Austin Metro Area (M/M%)

  • Cedar Park had the largest monthly rental growth rate, up 2%.
  • Pflugerville was second with rent climbing 1.4%.
  • Austin was third with rent increasing 1.2%.
Austin Rental Market
Source: Zumper

Austin Is The Silicon Prairie

Austin Texas has been nicknamed Silicon Hills and Silicon Prairie because they’ve attracted so many high-tech employers. This has resulted in an active upscale Austin real estate market. Austin’s GDP, which grew 117% over the last 20 years, helped the real estate market recover from the recession.

The closest metro to see this type of growth was Silicon Valley, which grew its GDP by 99% during the same period. Major local employers in Austin include IBM, Amazon, Apple, Cisco Systems, and many semiconductor manufacturers. There are more than 3300 tech companies in the region and more than 100,000 tech workers all competing for homes in the Austin real estate market.

One of the long-term strengths of Austin is its diverse economy. The Austin real estate market dipped after the layoffs of the Dot-Com boom. They decided to solve the problem by encouraging medical and biotech employers to relocate to the area, too. As of this writing, there are 85 biotech and pharmaceutical companies in Austin.

Austin is a Relatively Friendly City for Landlords

Texas, in general, is very landlord-friendly, though cities can have their own, stricter ordinances. Texas doesn’t specifically let tenants withhold rent for failure to provide essential services. You can evict someone for nonpayment of rent after three days. Texas doesn’t set a limit on security deposits.

Texas doesn’t require a minimum time frame before you increase the rent. For major lease violations, you can terminate the lease then and there and give them three days to vacate. Knowing you won’t spend months trying to evict a non-paying tenant is a good reason to consider the Austin real estate market or another Texas housing market over more liberal cities.

The Excellent Tax Environment

Texas’ property taxes may be high, but this is offset by the lack of a state income tax. There is, overall, a low state and local tax burden for investors. That makes this a great place to buy a home and rent it out.

Texas Real Estate Investment Opportunities: Where To Invest?

With Austin becoming a more diverse city every year, there are plenty of opportunities to take advantage of – from buying new homes to different investment options in the Austin real estate market. Austin is a leader across the country with jobs and when you combine that with home prices not as drastically increasing, you'll get a real estate market that many others envy.

Good cash flow from Austin investment properties means the investment is, needless to say, profitable. A bad cash flow, on the other hand, means you won’t have money on hand to repay your debt. Therefore, finding the best investment property in Austin in a growing neighborhood would be key to your success.

As with any real estate purchase, act wisely. Evaluate the specifics of the Austin housing market at the time you intend to purchase. When looking for the best real estate investments in Austin, you should focus on neighborhoods with relatively high population density and employment growth. Both of them translate into high demand for housing.

Some of the popular neighborhoods in and around Austin are Northwest Hills, Downtown Austin, West Lake Hills, Brushy Creek, Barton Creek, Spicewood Summit, Mueller, South Austin, Hyde Park, Windsor Park, Crestview, North Austin, Allandale, Shady Hollow, Rollingwood and Steiner Ranch.

There are around 75 neighborhoods in Austin. Tarrytown has a median listing price of $1.5M, making it the most expensive neighborhood. West University is the most affordable neighborhood, with a median listing price of $325K. (on Realtor.com).

Downtown is where the city's high-rise buildings are located, as well as being the center of government and business for the region. Downtown Austin is expanding and the residential options are increasing.

The cost of real estate might be the highest in Austin, but residents live within walking distance of everything they need. If housing supply meets housing demand, real estate investors should not miss the opportunity since entry prices of homes remain affordable.

Apart from the Austin real estate market, you can also invest in the housing market of Houston, TX. If you are a home buyer or real estate investor, Houston has a track record of being one of the best long-term real estate investments in the nation through the last ten years.

The Houston Real Estate Market forecast is good, and current housing prices are relatively low, so if you want to get on board the Houston real estate investing then now would be a great time to do so.

The Houston metro area offers great opportunities for investors who are looking for a stable market that offers both cash flow and equity growth at a price that is STILL well below their replacement value.

The El Paso real estate market is another hot market to invest in. El Paso real estate market was ranked 4th in Trulia’s hottest real estate markets to watch in 2018. El Paso’s strong job growth, affordability, low vacancy rates, and high population of young households were pivotal in the ranking process.

The cost of living in El Paso is lower than the national average, while the cost of housing is well below that of other major metropolitan areas, including Houston and Austin.

The Central, Cielo Vista, and Mesa Hills areas offer more affordable rental properties for sale, while neighborhoods in the northwestern and eastern parts of the metro area have some of the more expensive housing inventory. The amount residents spend on everyday expenses, such as food and transportation, is slightly less than what the average American pays.

The next one is the San Antonio real estate market. The median home value in San Antonio is $184,322. San Antonio home values have gone up 4.8% over the past year and Zillow predicts they will rise 1.9% by Dec 2020. For those who want to invest in rental real estate, the San Antonio real estate market is an ideal location because of its outsized military presence.

Fort Sam Houston is located inside the city limits. Lackland Air Force Base, Randolph Air Force Base, Camp Bullis, and Camp Stanley are located in the immediate vicinity. This means that there is a large population that will almost always rent because they don’t know where they’ll be sent on their next assignment.

San Antonio has a dearth of affordable housing because demand is so much greater than the supply. This has created a large number of renters who need to pay quite a bit to rent apartments or single-family homes. We know there is a lack of housing relative to demand when a balanced market has a 6 month home inventory and San Antonio has only a two-month inventory.

How can we not mention Dallas on this list? The Dallas housing market 2020 is shaping up to continue the trend of the last few years as one of the strongest markets in the United States. Despite some fluctuations in the market, demand and sales have continued to climb at a feverish pace for more than two years and show no signs of stopping.

Dallas’s local economy is a mix of aerospace, computer chips, telecommunications, transport, energy, and healthcare sectors and the Finance and Business Services. These sectors are all providers of good wages which allows for a strong market for Dallas investment properties.

Dallas’s population has grown at twice the national rate for years now and this pushes the prices of Dallas investment properties higher due to builders not being able to keep up.

Dallas’s housing prices have increased 29% over the last three years, even with these increases in home prices, they are still competitive for investment properties and you can expect further increases over the years. If you want to buy an investment property in Dallas, don’t wait around, go ahead and do it.

NORADA REAL ESTATE INVESTMENTS has extensive experience investing in turnkey real estate and cash-flow properties. We strive to set the standard for our industry and inspire others by raising the bar on providing exceptional real estate investment opportunities in many other growth markets in the United States. We can help you succeed by minimizing risk and maximizing the profitability of your investment property in Austin.

Consult with one of the investment counselors who can help build you a custom portfolio of Austin turnkey properties. These are “Cash-Flow Rental Properties” located in some of the best neighborhoods of Austin.

Not just limited to Austin or Texas but you can also invest in some of the best real estate markets in the United States. All you have to do is fill up this form and schedule a consultation at your convenience. We’re standing by to help you take the guesswork out of real estate investing. By researching and structuring complete Austin turnkey real estate investments, we help you succeed by minimizing risk and maximizing profitability.

Buying or selling real estate, for a majority of investors, is one of the most important decisions they will make. Choosing a real estate professional/counselor continues to be a vital part of this process. They are well-informed about critical factors that affect your specific market areas, such as changes in market conditions, market forecasts, consumer attitudes, best locations, timing, and interest rates.

Let us know which real estate markets in the United States you consider best for real estate investing! 

This article shouldn't be used to make real estate or financial decisions. Some of this article's information came from referenced websites. Norada Real Estate Investments provides no express or implied claims, warranties, or guarantees that the material is accurate, reliable, or current. All information should be validated using the below references. Norada Real Estate Investments does not predict the future US housing market. This article educated investors on Austin real estate. Buying a rental property needs research, planning, and budgeting. Not all investments are good. Always do research and consult a real estate investment counselor.

References

Market Data, Reports & Forecasts
https://www.abor.com/new-center/market-stats
https://www.zillow.com/austin-tx/home-values
https://www.realtor.com/realestateandhomes-search/Austin_TX/overview
http://austin.culturemap.com/news/real-estate/08-30-18-austin-home-foreclosures-rise-report

Foreclosures
https://www.realtytrac.com/statsandtrends/tx/travis-county/austin

Apartment Prices & Trends
https://www.rentcafe.com/average-rent-market-trends/us/tx/austin/
https://www.rentjungle.com/average-rent-in-austin-rent-trends/

Reasons to consider investing in Austin
https://www.austintexas.gov/invest-here
https://www.usnews.com/best-colleges/university-of-texas-3658
https://www.collegesimply.com/colleges/texas/austin/four-year-colleges/
http://capstonecapitalusa.com/the-most-friendly-8-landlord-states
https://www.rentcafe.com/blog/renting/states-best-worst-laws-renter
http://austin.culturemap.com/news/real-estate/09-11-18-best-real-estate-markets-in-us-austin-wallethub

Is Austin In A Bubble
https://www.quora.com/Is-the-Austin-real-estate-market-a-bubble-If-so-when-will-it-burst
https://www.williamskw.com/blog/5-Predictions-for-the-Austin-Real-Estate-Market-in-2018/53486

Cost of Living
https://livability.com/tx
https://www.tripsavvy.com/austins-cost-of-living-255111
https://www.bestplaces.net/cost_of_living/city/texas/austin
https://www.nerdwallet.com/cost-of-living-calculator/city-life/austin
https://www.niche.com/places-to-live/search/suburbs-with-the-lowest-cost-of-living/m/austin-metro-area
https://www.forbes.com/sites/scottbeyer/2016/08/31/why-is-austins-housing-more-expensive-than-other-texas-cities/#10556d3d6121

Texas Housing Market Predictions & Trends 2023

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The Texas housing market is certainly a fascinating one to explore in 2023. Using several statistics, we explore the Texas houisng market and where it's heading. The lack of inventory continues to inflate Texas housing prices for now, but many analysts predict that the rate of appreciation will slow down as compared to the last two years. Some of the fastest-growing real estate markets in 2022 are in extremely desirable sections of Texas, particularly in the suburbs of major metropolitan cities.

These communities often have great educational systems and provide more value for money. They are ideal for millennials seeking a place to raise a family.  The suburbs of Dallas and Austin are by far the most popular areas to purchase in Texas. Real estate brokers also report increased sales of lake properties and ranches as individuals seek ways to get away from congested cities.

Texas has approximately 1,700 cities with populations ranging from 2.3 million to less than 100 people. According to PwC and the Urban Land Institute's Emerging Trends in Real Estate 2022 research, Texas has four of the top twelve markets with the highest house-building prospects.

According to Zillow, the typical home value in Texas has climbed by 12.6% over the last twelve months. It stands at $315,451 (ZHVI), which is $35,273 more than last December. People from all over the country are flocking to Texas to live, work, and invest in the Texas real estate market.

  • Texas housing price 1-year change: 12.6%
  • Texas housing price 5-year change: 60%

The FHFA House Price Index (FHFA HPI®) is the nation’s only collection of public, freely available house price indexes that measure changes in single-family home values based on data from all 50 states and over 400 American cities that extend back to the mid-1970s. At the national level, house prices were flat nationwide in October, experiencing a 0.0 percent change from the previous month. House prices rose 9.8 percent from October 2021 to October 2022.

Four-Quarter Appreciation in Texas (as of 2022 Q3)

  • One-Quarter Appreciation: 0.1%
  • Four-Quarter Appreciation: 14.4%
  • Five-Year Appreciation: 61.0%
  • Appreciation since 1991: 331.0%
Texas House Price Appreciation
Source: FHFA

Texas Housing Market Predictions 2023

Texas has had some of the strongest housing appreciation rates in the country over the past decade. Over the past decade, Texas housing prices have risen 125.74 percent, which equates to an annual home appreciation rate of 8.48 percent, according to the data collected by NeighborhoodScout. If you are a house buyer or real estate investor, Texas has been one of the finest long-term real estate investments in the United States over the past decade.

The Texas housing market is expected to grow in 2023. In other words, if you're debating whether or not to purchase a house this year, you can't start preparing now to be a better buyer in 2023.  Texas housing market mirrors larger national trends, albeit with some regional variation. An imbalance between demand and supply has fueled rapid home appreciation across the state.

According to Neighborhoodscout, the real estate appreciation rates in Lone Star State have been among the highest in the United States. Neighborhoodscout's latest quarterly appreciation (between 2022 Q2 – 2022 Q3) rate in Texas was 1.97 percent, which amounts to an annual appreciation rate of 8.10 percent.

  • Texas appreciation rate has been 1.97% between 2022 Q2 – 2022 Q3.
  • Texas appreciation rate has been 19.64% between 2021 Q3 – 2022 Q3.
  • Texas appreciation rate has been 41.08% between 2020 Q3 – 2022 Q3.
  • Texas appreciation rate has been 62.49% for the last 5 years, between 2017 Q3 – 2022 Q3.
  • Texas appreciation rate has been 125.74% for the last 10 years, between 2012 Q3 – 2022 Q3.
  • Texas appreciation rate has been 217.15% since 2002, between 2000 Q1 – 2022 Q3.

Although house sales have slowed in Texas, this is not always an indication of demand but rather of supply. Numerous analysts believe that the number of homes sold in Texas in 2021 and 2022 could have been higher if there had been a greater supply of homes for sale. As newly constructed homes enter the market, this might increase overall sales.

If you want to sell your property in 2023, you are in an advantageous position. While Texas home prices are not predicted to increase as quickly or as sharply as they did in 2021 and early 2022, when mortgage rates were low, buyer demand remains robust and is unlikely to diminish. As Bidding wars are typical, your home is likely to attract a large number of buyers. This is a perfect moment to sell if you are not concerned about acquiring a new house with potentially higher interest rates.

After two years of the pandemic, analysts continue to forecast a surge in home sales. Unfortunately, this means that a large number of individuals will be priced out. Affordability will be a concern, and this might eventually lead to a decline in demand to more sustainable levels. Overall, the Texas housing market will likely continue robust, although not to the same extent as in 2021.

Current Texas Housing Market Trends

Aggressive central bank policies drag down the Texas housing sector, slowing sales. As housing inventories improve and prices fall, the housing sector continues to ease. Despite a nationwide decline in construction permits, high demand for construction shows many homebuyers are delaying significant purchases. Lower-priced homes, an attractive market for first-time buyers and younger households, sold less than higher-priced homes.

According to the most recent report from the Texas Real Estate Research Center at Texas A&M University, the housing market in Texas has continued to slow as people make financial decisions based on mortgage rates and recession fears. On the supply side, both housing permits and housing starts are declining. Prices are correcting, and the market is stockpiling.

However, as evidenced by sales volume, buyers are calmer now than they were during the pandemic frenzy, with many key indicators such as days on market (DOM) and months of inventory (MOI) uniformly returning to pre-pandemic levels. With higher mortgage interest rates expected in 2023, existing-home sales will most likely fall short of 2022 levels.

Texas Housing Demand

Total home sales inched down 3.3 percent month over month (MOM), settling at a seasonally adjusted rate of 26,800 closed sales. Sales in Houston took a big hit, while sales in the other major metros stayed at October levels. Texas' sales volume has shrunk by one-tenth compared with a year earlier. As winter approaches, sales are expected to trend downward for the next two months.

Rising mortgage rates disproportionately affect sales of different-priced properties. Up to November 2022, total sales for homes under $300K fell about 30%, while sales for homes between $400K and $500K rose 15%. Rising rates may have deterred more lower-middle-class homebuyers than upper-middle-class ones.

Homes are on the market longer as sales slow. Texas averaged 46 days. The limited period implies the housing market is still tight compared to previous standards. Austin's metropolitan DOM doubled from 27 to 57 days. Dallas' DOM went from 25 to 42 days.

Texas Housing Prices

The median home price in Texas continues to decline, as the seasonally adjusted median price decreased 1 percent month over month. The four largest metropolitan areas saw variable monthly changes. Despite depreciation over the past six months, the state's median price remained 6.1% higher than levels one year ago. Dallas had the highest rate of growth at 9.6 percent, while Austin's rate of growth decreased to 0.1 percent.

Texas Housing Price Trends
The Texas Repeat Sales Home Price Index is a more accurate indicator of changes in single-family home values since it adjusts for compositional price influences. In comparison to November 2021's 19.5 percent year-over-year (YOY) increase, Texas's index rose 9.2 percent YOY in November 2022, indicating a reduction in price growth. A similar pattern hit the major metropolitan areas as growth rates decreased from double digits to single digits, with the exception of San Antonio (12.8 percent). Moderating property prices corroborated the Fed's fight against inflation.

Texas Housing Supply

Homebuilders are initiating fewer building projects. The state's year-to-date cumulative single-family construction permits in November 2022 had a net loss of 5.2 percent, shrinking from 157,043 to 148,954 units. The monthly drop paused in November, and construction permit issuance remained below 10,000 units. Construction permits rebounded in all major metros except Austin. Dallas (2,886 permits) gained more than 300 permits, while issuance in Houston (3,223 permits) stayed steady.

Despite the slight decrease in Austin, the tech metro (1,341 permits) expanded residential space for single-family homes twice as fast as in San Antonio (663 permits). Construction generally slows during the winter, yet even after the seasonal adjustment, Texas' single-family construction starts plummeted 28.5 percent from 2021 to 10,700 units, corroborating a slowdown in the housing industry.

The number of homes for sale typically declines after the summer peak. However, active listings have been quickly accumulating to a seasonally adjusted level of 91,600 units. Compared with the five-year average of 94,800 units before the pandemic, this November's housing inventory level is only 4.5 percent away from rebounding back to the pre-pandemic volume, rather than 50 percent a year ago.

Amid the rebound, Texas' MOI ticked up to 2.9 months. Austin's inventory level jumped to a ten-year high with 9,000 homes ready for sale, while Dallas's housing supply was tight with 20,000 homes for sale, 3,700 fewer than in November 2019.

Texas Housing Market Trends for December 2022

According to Redfin, in December 2022, home prices in Texas were up 2.9% compared to last year, selling for a median price of $345,500. On average, the number of homes sold was down 31.4% year over year and there were 20,265 homes sold in December this year, down from 33,010 homes sold in December last year. The median days on the market was 49 days, up 22 days year over year.

  • Median Sale Price = $345,500, +2.9% year-over-year
  • # of Homes Sold = 20,265, -31.4% year-over-year
  • The median days on the market was 49 days, up 22 days year over year.

Top 5 Metros in Texas with the Fastest Growing Sales Price

Horizon City, Texas: In December 2022, Horizon City home prices were up 37.5% compared to last year, selling for a median price of $258K. On average, homes in Horizon City sell after 70 days on the market compared to 29 days last year. There were 43 homes sold in December this year, up from 22 last year. Hot listings can sell for about 3% above the list price and go pending in around 14 days.

Friendswood, Texas: In December 2022, Friendswood home prices were up 27.6% compared to last year, selling for a median price of $375K. On average, homes in Friendswood sell after 44 days on the market compared to 9 days last year. There were 55 homes sold in December this year, down from 81 last year. Hot listings can sell for around the list price and go pending in around 7 days.

Haslet, Texas: In December 2022, Haslet home prices were up 27.3% compared to last year, selling for a median price of $649K. On average, homes in Haslet sell after 63 days on the market compared to 28 days last year. There were 32 homes sold in December this year, up from 21 last year. Hot listings can sell for around the list price and go pending in around 42 days.

Mansfield, Texas: In December 2022, Mansfield home prices were up 26.0% compared to last year, selling for a median price of $540K. On average, homes in Mansfield sell after 73 days on the market compared to 20 days last year. There were 80 homes sold in December this year, down from 98 last year. Hot listings can sell for around the list price and go pending in around 22 days.

Socorro, Texas: In December 2022, Socorro home prices were up 25.3% compared to last year, selling for a median price of $233K. On average, homes in Socorro sell after 23 days on the market compared to 24 days last year. There were 49 homes sold in December this year, up from 36 last year. Hot listings can sell for around the list price and go pending in around 7 days.

Texas Employment Situation

Home sales are typically intimately related to the health of an economy and increase and decrease in tandem with economic activity. As economies decline, the money supply becomes more constrained. As it gets more difficult to obtain money, fewer house buyers enter the market. With fewer buyers accessible due to stricter credit criteria, inventories of houses rise or take longer to sell. Price decreases when there is more product supply and less demand for it.

As recession fears persist, inflationary pressures and uncertainty continue to plague the Texas economy. Texas' labor market expanded, albeit slowly, but it remained a positive factor in the overall economy. Initial unemployment claims are increasing as employers cut costs to stay afloat. Inflation continues to offset any nominal wage increases seen in the market, resulting in real wage decreases. Because the Texas trade-weighted dollar reached an all-time high, import costs fell to an all-time low. It also meant that foreign traders had to pay more for Texas exports, lowering export values.

Texas added 33,600 jobs despite national tech company layoffs. Texas' private sector hired 34,600 people in November, including 1,400 in professional/business services. Construction lost 3,900 people due to market demand for construction projects.  Despite the first-half negative revision, the Dallas Fed predicts a 3.5 percent job growth in 2022.

A strong Texas job market has kept the unemployment rate at 4 percent for three months. Houston had 4.3 percent unemployment, while Austin had 2.9 percent. Houston's goods-producing jobs, especially in the oil and gas industry, are still below pre-pandemic levels. Austin's leisure/hospitality sector added nearly 3,000 jobs in a month.

The number of Texans filing initial unemployment claims in November dropped by more than 8,000 from October. Despite weekly claims decreasing compared with previous months, claims are expected to continue increasing as businesses are unsure of the economy going forward. Texas' average weekly continued unemployment insurance claims shrugged their upward trend, dropping nearly 30,000 continued claims MOM in November.

Texas attracted 311,500 networkers in the past 11 months, and the influx of out-of-state workers expanded Texas' labor force by 2.2 percent to 14.6 million available workers. At the metropolitan level, Dallas added the most workers, followed by Houston and Austin. The state's labor force participation rate held steady at 63.5 percent.

Nationally, nonfarm payrolls rose by 315,000 in August or rose by 0.2 percent. Over the 12-month period ending with August, nonfarm payrolls rose by 5,840,000 jobs or 4 percent. Texas ranks 1st among the 50 states and the District of Columbia for percentage gain in nonfarm payroll employment over the past 12 months.

Texas Employment Situation: Joint Economic Committee

Texas added 16,400 net payroll jobs, or 0.1 percent, on a seasonally adjusted basis during August. In the prior month, Texas added 73,400 jobs. Over the past twelve months, Texas added 726,900 payroll jobs or 5.7 percent. Texas nonfarm payroll employment had increased in each of the past 12 months.

Employment-to-Population Ratio: The employment-to-population ratio, or the percentage of the Texas civilian noninstitutionalized population 16 years and older counted as employed, in August fell to 61.2 from 61.3 percent in the prior month. At 61.2 percent, Texas is tied for 21st among state employment-to-population ratios in the nation. The employment-to-population ratio in Texas rose by 1.2 percentage points from a year earlier.

The 10-year high for the employment-to-population ratio in Texas was 61.6 percent in November 2019. The series high for the employment-to-population ratio in Texas last occurred in November 1998 when the employment-to-population ratio hit 65.8 percent. The 10-year low for the employment-to-population ratio was 52.2 percent in April 2020. This also represents the series low for the employment-to-population ratio in Texas.

Top 10 Places to Buy a House in Texas

According to Niche.com, these are the top 10 areas to buy a home based on home valuations, property taxes, homeownership rates, housing prices, and real estate trends. The ranking is based on statistics from the United States Census Bureau, the FBI, and other sources. Cottonwood Creek South is the best place in Texas to buy a house.

  1. Cottonwood Creek South, a neighborhood in Richardson, TX
  2. Arapaho, a neighborhood in Richardson, TX
  3. Lakeside City, TX
  4. Fulshear, a town in Fort Bend County, TX
  5. Canyon Creek South, a neighborhood in Richardson, TX
  6. Heights Park, a neighborhood in Richardson, TX
  7. Shady Hollow, a suburb of Austin, TX
  8. Red Lick, Bowie County, TX
  9. Woodway, a suburb of Waco, TX
  10. Timberbrook, a neighborhood in Plano, TX

Top 10 Texas Cities Having Highest Real Estate Appreciation Rates Since 2000

According to Neighborhoodscout.com, these are the top ten cities in Texas that have had the highest real estate appreciation since the year 2000.

  1. Westworth Village
  2. Gustine
  3. Balmorhea
  4. Garden City
  5. Mico
  6. Runge
  7. Granger
  8. Encinal
  9. Falls City
  10. Wingate

References

  • https://www.zillow.com/tx/home-values/
  • https://www.redfin.com/state/Texas/housing-market
  • https://www.recenter.tamu.edu/articles/technical-report/Texas-Housing-Insight
  • https://www.neighborhoodscout.com/tx/real-estate
  • https://www.niche.com/places-to-live/search/best-places-to-buy-a-house/s/texas/
  • https://www.fhfa.gov/DataTools/Tools/Pages/Four-Quarter-Heat-Map.aspx
  • https://www.fhfa.gov/AboutUs/reportsplans/Pages/Fannie-Mae-Freddie-Mac-Reports.aspx
  • https://www.jec.senate.gov/public/index.cfm/republicans/tx/

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