Sep 18, 2015
Housing bubble? Center’s chief economist doesn’t think so
IRVING – A recent report from CoreLogic said that five of the 14 most over-valued housing markets in the country are in Texas. But that doesn't mean the Lone Star State...
IRVING – A recent report from CoreLogic said that five of the 14 most over-valued housing markets in the country are in Texas. But that doesn’t mean the Lone Star State is in a housing bubble, says Real Estate Center Chief Economist Dr. Jim Gaines.
“We don’t think we are in a price bubble, but we are well aware that home prices have been increasing at almost twice their normal annual rate of increase for the last several years,” Gaines told HousingWire, an online mortgage industry news source.
“When you bring people and jobs, that creates a heavy increase in the demand for housing, rental and owned,” Gaines said, alluding to the jobs created by the state’s oil and gas boom.
But he added that land development and construction are slowing because of new lending restrictions.
“Over the last several years, the demand started going up much faster than the supply could keep pace with,” said Gaines. “For example, all of our housing markets are reporting significantly low volumes of homes being listed for sale relative to the demand. A normal market would have six months of inventory, while we are running at a three-month inventory.
“Bottom line, we don’t think there is really a bubble,” he said.
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