The end of government tax credits and subsidies is a new trend, the results of which are yet to be observed. Homeowners continue to lose equity on their houses and one in seven are delinquent or in foreclosure. The amount of foreclosures will remain elevated. It is increasingly difficult to obtain a home mortgage, which continues to affect the amount of home purchases possible. These factors have contributed to another trend: people view renting as a more practical option.
There is a low cost of living in central Texas and there are job openings. However, despite available labor, one in six people are unemployed or underemployed. Small business failures have increased by almost fifty percent. These uncertainties in the economy and the potential changes in laws, regulations and taxes, will continue to affect the real estate market into 2011.
Housing prices have continued to drop by about twenty-five percent and commercial real estate has seen a fifty percent dip. Although the plunge in the market is a negative trend, it has also helped to promote central Texas as a desirable place of residence. The combined factors of land prices, housing prices and cost of living, are making the state one of the most affordable and attractive option for prospective home buyers. The region is also becoming a popular retirement option.
So, there are some encouraging signs that things may be turning around and the fate of many industries hangs in the balance. It will become clearer further into 2011 whether the real estate market has bottomed out. Either way, there will be a long and slow recovery process. Predictions are that the housing market will return to a “normal” state between 2013 and 2014, but it will take 5 to 10 years for the market really pick up. A rise in the housing market would benefit many industries aside from real estate, from contracting to moving companies. Luckily, 2011 should see a rise in more positive real estate trends.