Existing-home sales in Texas hit a seven-year high in 2020, but the Texas Real Estate Research Center expects growth to decelerate in 2021. The single-family sector faces headwinds, ranging from depleted supply to the COVID-19 pandemic.
“Homebuilders are trying to satisfy demand in the lower price cohorts by building homes in the suburbs or outer city borders where land costs are lower,” said research economist Dr. Luis Torres. “This trend was prevalent before the pandemic but has become even more widely adopted over the past year.”
Nevertheless, the Center expects the price per square foot to accelerate about 8% in 2021. “Some of the appreciation is due to exhausted inventory at the lower end of the price spectrum forcing buyers toward higher-priced homes,” Torres said.
Regarding the pandemic, Torres said, “Because this recession was caused by a health catastrophe, the recovery path could be different than that of previous recessions.”