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Texas Economic Update
During this election season, once of the common boasts we’ve heard from candidates is that the Texas economy is doing extremely well. Our Governor incumbent even tweeted once that the Texas GDP would be the 10th largest economy in the world. Yes, the world, not just the US. All this talk made us wonder… just how good is the Texas economy doing, and what does that mean for our real estate market?
Statewide, the unemployment rate fell to 3.8%, from 4% a year ago, which is pretty close to the national rate of 3.7%. New jobs were created in many industries, especially business, construction, hospitality, education, healthcare, and trade, while the information sector showed some losses.
The DFW area was the 5th highest metro area for job growth, with Midland taking the top spot. Unemployment in DFW is a little lower than the state and national rates, at just 3.4%. The financial sector is struggling to create local jobs while construction, business, and hospitality remained strong. Despite the good news, some sources like the Dallas Fed and Dallas news are forecasting a cool down. This isn’t necessarily bad news, since we’ve been experiencing strong growth for a few years now. As great as strong growth may be, it can’t last forever. To quote one of our favorite real estate attorneys, “you can’t break world records every year.”
One of the biggest struggles we’ve seen in the area has been a lack of housing inventory for the new Texans moving here for jobs. A shortage of available housing led to some rapid price increases in the area and a frenzy of real estate activity. We are finally seeing some relief, with an active listing increase of 14.5%, giving home shoppers more options and maybe more important than that, a fair chance to find a live-able home without facing a bidding war. As expected, an easing of inventory shortages has also come with a slight drop in sales (2.3& in August compared to August 2017), and a small jump in market time. While the numbers still indicate a “seller’s market,” home sellers are feeling the change, and some are growing anxious when they don’t receive a stack of offers in their first week on the market. However uncomfortable this may feel, it’s actually pretty normal. A home selling over list price in 1 day is not.
This means that when selling a home, it’s become important once again to declutter and stage, maybe even do a few upgrades to entice home buyers. Pricing is crucial as well. Buyers appear to have hit their limit with high housing prices in many parts of DFW, and price reductions currently outnumber home sales by about 3 to 2. Choosing a strong listing agent with a solid marketing plan has always been important, but now is a make or break scenario.
Will the results of today’s mid-term elections change anything? This remains to be seen, but we think Texas will weather any changes that may be on the horizon.
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With a background in marketing and journalism, Lisa Ellard is well-equipped to offer each of her clients savvy business advice, while always keeping their lifestyle needs a priority. She is a detail-....
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