RECON for January 8, 2021RECON for January 8, 20212021-01-08T06:00:00Z2021-01-08T06:00:00Z

Aerial view of Austin suburb in the fall
According to the Texas Real Estate Research Center's 2021 outlook, this year's housing market will be characterized by strong demand with low inventories accompanied by solid price growth. Demographic trends, such as aging millennials and out-of-state migration, will help drive Texas housing demand. Keep reading today's RECON for the details. (Photo from Center files.)
January 8, 2021

Center economists look ahead to 2021

COLLEGE STATION (Texas Real Estate Research Center) – Economists at the Texas Real Estate Research Center have issued their 2021 outlook for housing and the state economy, a task made more difficult by unprecedented unknowns.

"The economy could look different coming out of the pandemic as some changes become permanent," said Center Research Economist Dr. Luis Torres. "Because this recession was caused by a health catastrophe, the recovery path could be different than that of previous recessions. Consumer and business safety expectations will play an important role in the economy’s full reopening."

The 2021 housing market will be characterized by strong demand with low inventories accompanied by solid price growth. Inventories of homes priced under $300,000 will be especially low, affecting sales in that price range. Price growth will be positive because of stable demand. Low-skill/low-wage earners were hurt the most economically, and they are typically renters, not homebuyers.

Demographic trends, such as aging millennials and migration from out of state, will help drive Texas housing demand in 2021.

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. This trend was prevalent before the pandemic but has accelerated during COVID-19.

Monetary policy implemented by the Federal Reserve, low inflation expectations, and slow economic growth are expected to keep mortgage rates low. Mortgage refinancing, however, will slow as lenders add more requisites and the pool of households able to refinance diminishes.

"According to the Mortgage Bankers Association, 2.7 million homeowners (5.5 percent of all home loans) were in forbearance as of Dec. 13, 2020,” said Torres. “The share of homeowners who will be able to make their mortgage payments once forbearance ends is unknown, but we expect delinquencies and foreclosures, which have so far been kept low by government policy, to increase during the year."

For information on the apartment market, commercial real estate, oil and gas, and rural land, read the 2021 Texas Housing & Economic Outlook.
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Household movement took hit in 2020

WASHINGTON (Texas Real Estate Research Center) – According to newly released national data from the U.S. Census Bureau, household movement and reasons for moving changed amid the COVID-19 pandemic. 

“Many analysts expected a large interstate migration last year, such as from California to Texas or from New York to Florida, but that doesn’t appear to be the case,” said Texas Real Estate Research Center Senior Data Analyst Joshua Roberson. “The total mover count—including state-to-state movers—took a major decline in 2020. The biggest influence in this decline was the large drop off in movement from renter-occupied households.”

Owner-occupied households, on the other hand, moved at record levels, aligning with record home sales. Most activity was driven by household moves from one county to another within the same state, followed by movement to other states. 

The data also reveal the flow of movers within or near metro areas, either to principal cities (the largest city in a metropolitan or micropolitan area, like Dallas, Austin, or Houston proper), surrounding areas just outside the principal cities, or non-metro areas even farther out. Net migration into principal cities was already in decline before the pandemic but took an even bigger dip last year. Instead, net growth went to surrounding, less-dense cities within the same metro. Meanwhile, growth to rural non-metro areas actually declined, hinting that while movers wanted more space, they also wanted common in-town amenities.

Reasons for moving also shifted last year. The following reasons, in no particular order, grew in influence last year: wanted to own a home, wanted a better neighborhood, retirement, and job hunting/replacement. Alternatively, the following reasons declined in influence over the same period: pursuit of a new job or transfer, move closer to job/shorter commute, wanted a newer or better home.

Annual Total Movers

Texas unemployment claims increase as 2021 begins

​​​​COLLEGE STATION (Texas Real Estate Research Center) – ​​Texas' initial unemployment claims increased for the second straight week to 46,300 the week ending Jan. 2. This brings the total sinc​e March 21 to 4.1 million, according to data from the U.S. Department of Labor (DOL).

The increase comes during the​ first week in which beneficiaries would be eligible to receive an extra $300 per week from the COVID-19 aid package signed into law last month.

The number of Texans who continue to claim unemployment insurance decreased for the second straight week to 359,200 the week ending Dec. 26.

The number of laid-off workers receiving benefits through the pandemic unemployment assistance program, which is open to gig workers, freelancers, and self-employed workers who don’t typically receive benefits, increased the week ending Jan. 2.

According to Texas Real Estate Research Center Research Economist Dr. Luis Torres, the claims numbers can be more volatile around the holidays because of challenges with seasonal adjustment.

Fewer people in Austin, Dallas-Fort Worth, and Houston filed new unemployment claims during the week ending Dec. 26. San Antonio claims increased during the same week.

More people in El Paso, McAllen, and Brownsville filed new claims, while claims fell in Laredo.

Using data from the DOL and the Employment and Training Administration, the ​Center has estimated unemployment claims for Texas' major and border metros since March 21:​
  • Houston-The Woodlands-Sugar Land, 942,800 claims;
  • Dallas-Fort Worth-Arlington, 897,700 claims;
  • San Antonio-New Braunfels, 280,100 claims;
  • Austin-Round Rock, 235,900 claims;
  • McAllen-Edinburg-Mission, 112,800 claims;​
  • El Paso, 99,200 claims;
  • Brownsville-Harlingen, 49,600 claims; and
  • Laredo, 28,400 claims.
Last week, new national unemployment claims decreased for the second week in a row to 786,700. This brings the 42-week total to 73.8 million.

For the second straight week, the accommodation and food services industry registered the highest number of initial claims during the week ending Dec. 26.​

Following accommodation and food services, construction, administrative/support/waste management/remediation services, retail trade, and healthcare and social assistance were the sectors with the most unemployment claims through Dec. 26.
Looking for more real estate news? Our NewsTalk Texas feed has all the latest headlines. Here's a sample:

1.6M-sf industrial project slated for Austin

​​​AUSTIN (REBusiness Online) – HPI Real Estate Services & Investments is developing Crossroad Logistics Center, a 1.6 million-sf industrial project east of Parmer Ln. between US 290 a​nd SH 130. 

The first of four phases will bring three buildings totaling 483,840 sf. Construction will be complete in 4Q2021. The remaining phases will add four buildings. 

David Bessent Architects and Jamison Civil Engineering are project partners.
market viewer screen shotTexas Realtors' MarketViewer tool helps members and their clients quickly understand the market statistics in their area. This powerful tool is a member benefit available exclusively to Texas Realtors and local Realtor associations in Texas. Data are compiled and analyzed through a research agreement between Texas Realtors, the Texas Real Estate Research Center, and all MLSs across the state. 

Tollway offices sell to Missouri investor

​​​DALLAS (Dallas Business Journal) – The Tollway Towers, a 321,578-sf office complex, has sold to an entity connected with St. Louis, Mo.-based Larson Capital Management.

Built in the mid '80s, the 12- and 14-story buildings at 15660 and 15770 N. Dallas Pkwy. were sold by Champion Partners, who had owned the towers since 2016. 

The property has conference rooms with full Wi-Fi and visual capabilities, grab-and-go food options, covered parking, and a fitness center. 

The buyer financed the acquisition with a $30.5 million loan from LMF Commercial.

Each property is being leased by Holt Lunsford Commercial. 

McAllen mobile home park trades hands

​​​McALLEN (REBusiness Online) – ​​Texan Mobile Home Park, a 280-site manufactured housing property, has​ been sold. 

The community at 2917 W. US 83 spans 880,783 sf. 

Marcus & Millichap represented the seller, a partnership, and procured the buyer, a limited liability company. 
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Massive Amazon expansion slated for San Antonio

​​SAN ANTONIO (San Antonio Business Journal) – Amazon is expanding its local operations with two fulfillment centers and a delivery station. 

The first fulfillment center will span o​ne million sf. Construction will be complete in 2021. 

The second 750,000-sf robotics fulfillment center will open in 2022.

Amazon is also planning a 350,000-sf delivery station at 8210 Aviation Landing. The facility will be complete this year. 

198K-sf Houston storage facility sold

​HOUSTON ​​(Connect Media) – ​New York-based Merit Hill Capital has purchased Strack Road Storage.

The 198,005-sf self-storage facility is ​at 4717 Strack Rd. 

Marcus & Millichap marketed the property on behalf of the local seller and procured the buyer. 
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Material herein is published according to the fair-use doctrine of U.S. copyright laws related to non-profit, educational institutions. Items attributed to sources other than the Texas Real Estate Research Center at Texas A&M University should not be reprinted without permission of the original source. To send news items for consideration, e-mail Hayley Rieder. The Texas Real Estate Research Center is part of Mays Business School at Texas A&M University in College Station - the heart of the Research Valley.


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