Prospects for the 2016 Texas real estate market
Dr. James Gaines, chief economist of the Real Estate Center at Texas A&M University Texas, has good news for those who want to invest in the Lone Star State’s real estate market.
He says Texas remains the homebuilding capital of the world.
In fact, the outlook for Texas’ real estate market in 2016 is best described in a single phrase: everything is going to be okay.
Crashing oil values and the declining state of Houston’s energy sector may make this rosy outlook seem naïve, but it’s true.
The market will continue growing despite belt tightening in the oil and energy sectors.
The reasons for such continued optimism are easy to see.
1. Houston is no longer that dependent on its energy sector. Over the years, it has diversified into other fields such as health care, construction, engineering, education, and manufacturing. This will create 70,000 more jobs each year for the next five years in Houston alone.
2. The expansion of the Panama Canal will allow Texas to export more liquefied natural gas (LNG) to Asia.
The ambitious project, which, when completed early this year, will also permit other basic products like cotton, pecans, and corn to flow from the Port of Houston to the newly expanded waterway.
3. Additional business is expected from Midwestern markets. The busy port of Texas has become accessible and therefore a more convenient venue for transporting homegrown products.
The situation is still a far cry from Houston’s bellwether status the past five years. But there’s every reason to hope for the best and start investing in the market – now.
Growth, albeit gradual, is expected to continue. Texas’s big gains in terms of employment, business, population, and real estate prices is poised to make this diverse, progressive state one of the best investment havens in the country.
Market needs and choices
Though construction constraints may mar its growth, the real estate sector will continue to stay on top of the list of best areas to market in the country this year.
Single-family homes and luxury estates remain in hot demand. Low inventory for single family homes have led experts to believe another type of real estate option is on the rise: condominiums.
Condominium development is the fastest-growing segment in the Texas real estate market.
Experts are betting on this new market which meets the demands of modern living by applying the conservative approach of maximizing every square foot of available space.
Developers, meanwhile, are playing catch up with the surging demand for mid-rises and residential towers.
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