Amid a national housing shortage, Texas is an exception
Amid a national housing shortage, Texas is an exception
The U.S. at large is facing a pervasive housing shortage. It’s estimated that even if 2024 is a year of strong housing construction, the country will still fall nearly 2 million houses short of what is needed.
Texas, however, is a completely different story. Housing inventory in the state is surging, and the number of homes for sale has more than doubled from its low during the pandemic.
LaTisha Grant is the executive managing broker at TAS Realty Group in Houston, Texas. She joined “Marketplace” senior correspondent Amy Scott to chat about what she’s seeing in the local market. A transcript of their conversation is below.
Amy Scott: So how is the market in Houston these days?
LaTisha Grant: You know, it’s funny, I was talking to one of my loan officers yesterday, and I was like, “This market is just really wacky right now.” It’s up in some areas, down in some, but, overall, it’s a very healthy market right now, I will say.
Scott: Healthy! I mean, the rest of the country can hardly be described that way. What is going on in Houston that makes it healthy?
Grant: Well, you know, Houston is one of those areas that people are moving to from other areas, number one. Number two, we have adopted something that the rest of the country has known for years, and it’s called the duplex. And the duplexes are just absolutely flying off of the shelves. So some markets are, you know, of course, doing better than others, but overall, that’s why I will say it’s pretty healthy.
Scott: So largely speaking, the country has been facing a housing shortage. There just aren’t enough homes for sale. But Texas has had a little bit of a different story with a lot of building in the past few years. Do you feel like you have enough supply there?
Grant: I’ll say we have sufficient supply because, specifically in Houston, we have a lot of vacant land. So what’s been happening is we have noticed a lot of our vacant land has been converted into housing, which is great for those that are in need of housing, but not so great for those that, you know, understand the need for green space.
Scott: A lot of that green space is disappearing?
Grant: It absolutely is. It seems like it just happens overnight, where there are no longer any trees left, no green space, and it just happened so quickly.
Scott: Wow. Well, mortgage rates have gone up and prices overall are much higher than they were even a few years ago. What kinds of conversations are you having with first-time homebuyers about whether this is a good time to get into the market? Or if maybe they should wait until rates come down a little bit?
Grant: Yeah, so homeownership is needs based. So often we connect home ownership to making an investment in. And, yes, homeownership is absolutely an investment. But at the same time, if you have a growing family, you’re outgrowing that apartment, which is happening to many of my first-time homebuyers. Homeownership is needs-based, so, even though the interest rates are a little bit higher, it’s still less than 100%, which is what you’re paying in interest rates where you’re renting currently. So the conversation that we have is, “What do you need? What are you looking for? And does your current living space provide you with the opportunity for what you’re seeking?” If it does, then remain. But if it doesn’t, then that’s something that we need to do, which is look for a home. And I’ll say the interest rates lately have not been a deterrence. When they were reaching seven, that was a major deterrent. Now that they’re coming down, so many of our buyers are jumping back into the market.
Scott: What about sellers who have been holding on to these low low mortgage rates and not super willing to part with that? Are more of them starting to put their houses on the market? Or do you expect that to happen if the Fed does start cutting rates?
Grant: I do expect it to happen if it starts cutting rates. I will tell you that the majority of my sellers have been investors lately, so they were just unleashing what they didn’t want anymore.
Scott: Does that provide a little bit of an opportunity for some people who want to live in homes to buy them? Not just the investors with cash?
Grant: It does. It provided a great opportunity because, again, many of my investors, they may have owned duplexes. And I’ll tell you one of my recent transactions: it’s two roommates, they’re buying a duplex, so that’s being sold by one of my investors who would have historically rented it out, but now he’s gonna go ahead and sell it.
Scott: Well, anything else you want to tell us about the market in Houston before I let you go?
Grant: Well, you know, one thing that I’m gonna say is it used to be a refuge. You know, people were escaping from the high prices of California and the high prices of New York. And you know, I’ll tell you, Houston is starting to compete. We’re getting up there in price. So you know, this is probably no longer a place to run to for cheap homes.
Scott: Well, maybe that’ll settle things down a little bit.
Grant: Exactly.
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