In this article, we investigate the future, supplying Texas housing market insights and predictions for 2024. We’ll first examine Texas as a whole and then we’ll delve into the central Texas housing market and discuss specifically San Antonio and Austin. By aggregating information from various authoritative and expert sources, this article aims to offer data-backed Texas housing market predictions for 2024 and is intended for home buyers, home sellers, and investors who are interested in understanding the dynamics of real estate in Texas next year. Increasing your knowledge about housing trends will help readers make well-informed decisions about buying, selling, and investing in central Texas.
What’s in it for you
Over the last 2 to 3 years, the population in Texas has boomed. Further, over the same period, the economy in Texas has been on fire. As 1 of the fastest growing and economically robust areas in the United States, it’s crucial that we first explore the trends, factors, and facts for all of Texas so that we can better understand how Texas’ statewide growth has fueled the housing markets within Austin and San Antonio.
Population growth is a key indicator of how the Texas housing market is doing. And Texas’ population growth has been a key contributor to its housing demand. According to the U.S. Census Bureau, between 2021 and 2022 the population in Texas grew by 470,708 people, the largest increase of any state in the nation. Since then, Texas has added an estimated 500,000 more residents making it just the second state in the country with a population greater than 30 million (California is the other).
For years, housing inventory in Texas has been best described as lots of people looking for homes and not many homes on the market. Other words, there’s been a mismatch between the demand and the supply for housing. Texas has not built enough homes to keep pace with its growth and inward migration which has been further exacerbated by hybrid work from home programs. This has caused a housing supply shortage which has subsequently put upward pressure on home prices. Compounding the problem is that Texas has experienced historical difficulties with labor and material shortages. As of late, however, signs of increasing inventory have appeared and have begun to put downward pressure on home prices.
When evaluating the Texas housing market there are many factors to consider like a home’s location, its school district, proximity to and the number of jobs within the nearby vicinity, and state-wide economic policies. Since the COVID-19 pandemic, the Lone Star State has offered massive incentives to big business which have been paired with some of the least restrictive COVID-19 restrictions in the country. As a result, job and economic growth in Texas outpaces the national average in nearly all sectors.
Further, the value of goods exported from Texas ranks number 1 nationally and represents 23.5% of all goods exported from the U.S (Burns Regional Analysis and Forecast). In short, Texas’ job market and economy is one of the strongest in the country, however, there are signs of slowing as corporate relocations to Texas have declined from 80 in 2021 to just 11 in 2023 (Burns Regional Analysis and Forecast).
Home prices have skyrocketed in Texas with places like Austin and San Antonio experiencing increases of 141% and 114%, respectively, since the last recession in 2009 (Burns Regional Analysis and Forecast). According to Texas Realtors Quarterly Housing Report for Q3 2023, the median sale price of Texas homes reached $340,000 which is nearly 5 times more than the state’s median household income. Nonetheless, this median price is just a 1.5% decrease over the same period last year as demand for housing has remained strong. However, relatively slow wage growth combined with a lack of housing supply has eroded the affordability of Texas homes, especially for first-time and low-income homebuyers.
Trends in the Texas housing market have favored sellers the past couple of years, but as of late 2023 appear to be moving toward a more balanced market. Here’s a summary of Texas’ most recent housing market numbers:
So that’s how the Texas housing market is doing right now, but as we approach the end of 2023, where is it headed and how will central Texas fare? Will home prices drop? Will it become a buyer’s market? Let’s zoom in and look at how 2 of Texas’ major housing markets – San Antonio and Austin – will do.
San Antonio is the second most populous city in Texas and its metropolitan area is home to more than 2.5 million people (about twice the population of Hawaii), making it the 24th largest metro area in the country. Let’s discover more about this prominent Texas city and discuss what you can expect to see out of San Antonio and its housing market in 2024.
Housing in the San Antonio market is forecasted to become more balanced as the number of active listings increased 138% in 2023 compared to 2022. Subsequently, the months of housing supply has nearly tripled, rising from 1.5 in Q1 2022 to 4.3 months Q3 2023. According to housing experts, 5 months or less of inventory indicates a seller’s market, meaning that sellers are still in control. However, as we move into 2024 and with the Fed predicted to increase interest rates again, we predict that the housing supply in San Antonio will rise another basis point and surpass 5 months of inventory resulting in a more balanced market that’s teeter-tottering toward a buyer’s market.
The San Antonio housing market reached its price peak in June 2022, with the median sale price of a single-family home reaching $341,000. This represented a massive increase from the previous year when the median sale price was just $290,000. However, rising interest rates have kept buyers on the sideline leading to increased inventory which in turn has forced San Antonio home prices downward. But not by much. As of Q3 2023, the median home price in San Antonio sits at $319,900 and as we look ahead to 2024, we project home prices in San Antonio will still grow 2% - 3% due to demand.
As the Fed continues their attempts to curb inflation and with interest rates rising faster than any other time in recent history, it's no wonder why lots of folks are cutting back on spending. Worse, personal savings are back down below pre-covid levels sitting at just 4.9% of the median household income (Burns Regional Analysis and Forecast). But inflation, interest rates, and poor savings haven’t stopped people from moving to Texas. As noted above, over the past 2 years Texas has added more than 1-million new residents and many of them have moved to San Antonio. As a result, we forecast demand for San Antonio houses in 2024 will remain strong which will cause the number of active listings to fall 10 - 20% as new San Antonians seek housing.
Current housing trends and forecasts for the Lone Star State, quite literally, can be separated into 2 categories. There’s Texas as a whole and then there’s Austin. Let’s explore some market predictions for the future of housing in Austin, Texas.
The Austin real estate market is currently one of the fastest-cooling housing markets in the U.S. And as the adage goes: the faster the rise, the harder the fall. Since its peak in the summer of 2022, home prices in Austin have steadily declined, falling approximately 16%. However, recent expert predictions for the 2024 Austin real estate market suggest that home prices have further to fall. Due to continued population growth, however, we predict that Austin home prices in 2024 won’t fall much further with declines in the 3% - 5% range.
Despite the sharp decline in Austin’s median home price (down 9.5% since January 2023 and 18% since June 2022), homebuyers are still struggling with affordability due to surging interest rates, rising consumer prices, and fewer corporate relocations and thus fewer jobs. These factors are keeping buyers on the sideline and are leading to longer than average days on market. As a result, we forecast that the number of active listings in Austin next year will increase between 10% and 15% thereby continuing to put downward pressure on prices.
Recent statistics for the Austin real estate market prove that F.O.B.A.T.T. – Fear Of Buying At The Top – is real. Inventory of homes in Austin has more than quadrupled since 2021 leading Knock, an online home-selling platform, to recently name Austin as the fourth best market for buyers in the United States. As a result, home buyers in Austin are now better positioned to negotiate with sellers and we predict that Austin buyers in 2024 will be able to offer lower prices, able to seek more concessions, and they can be pickier as the number of active listings continues to rise.
Here’s the deal: deciding to buy or sell a house right now shouldn’t be based only on this or any other outlook for the Austin or San Antonio housing markets. The predictions outlined above can help you understand general real estate trends, but local and even neighborhood-specific factors and your individual circumstances can also influence property values and market dynamics. Therefore, buyers and sellers should always do their own research and due diligence before making any decision. Assuming you have and you’re ready to buy or sell in the San Antonio or Austin housing market, you need to work with a real estate agent or explore selling to a trusted real estate investor. Our investors have high standards for excellence and know how to create win-win deals. Reach out to Good Vibes Homebuyers today for a fast, free no obligation top-notch offer!
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