Here’s why prices keep rising in our market.
What is driving our current real estate prices? The housing market has been on fire, and not just in the DFW area. Nearly 75% of the 100 largest U.S. housing markets have shown a price growth of 10% or higher this year. Believe it or not, the DFW market area didn’t even crack the top 20.
I know many of us assume that people moving to Texas from other states is what’s driving real estate prices, but that just isn’t true. Well, maybe it’s partially true—there has been an increase of people moving to Texas due to the pandemic and the work-from-home opportunities it’s created. We’re also seeing a lot of investor activity. After all, our economy has been infused with over $2 trillion worth of new money, and historically speaking, real estate is a good place to invest cash.
However, the real reason prices are rising is that we’re seeing a huge increase in buyers among the children of the baby boomers. They represent the largest demographic wave to ever move through our economy. This also explains why we’re seeing a strong seller’s market in other metro areas across the country, including New York and California—they too have multiple offers and not enough houses.
“The housing market has been on fire, and not just in the DFW area.”
Conventional wisdom dictates that people are primarily motivated to buy homes not because of low interest rates or investment potential, but simply because of lifestyle changes. The children of the baby boomers are getting married and having children themselves, and as they experience these milestones, purchasing a home becomes a greater priority. Right now, though, there aren’t enough existing houses to accommodate the demand from this demographic. Thus, we’ll continue to see strong demand and higher prices.
At some point, the price pressure will moderate, as high prices start limiting affordability. Demand, however, should last at least a few more years. Stay tuned for my next video blog to find out whether we’ll see a housing market crash, and if so, when it will happen. If you have any questions until then, don’t hesitate to reach out to me. I’d love to hear from you.
