The state of Texas real estate,
Texas currently has 278k properties for sale, of the total 12mm homes including apartments. Of the 278k 206k are single family homes, condos and apartments for sale. With a median price of 340k dollars.
Texas exploded when covid hit, causing a massive run on real estate. I experienced this first hand, I bought a house in 2018 for 320k and sold it for 600k in late 2021, this in my mind was unsustainable. Since the peak of 2022, housing in major metropolitan areas, Austin, DFW, San Antonio, El Paso and Houston have been contracting. Ausitn being hit the hardest at over 20% drop from the highs, with a current median home price of 450K. The house I sold for 600k is now worth according to Zillow 460k.
Inventory has been creeping up based on FED data, above the pre covid levels while new home builds are also high with 1.4mm active permits, over 25% of the current housing has been built since 2010 the consensus is, Texas is going to be experiencing a surplus of housing, coinciding with the highest number of layoffs in 2026, with 30,000 workers displaced the threat to the residential single family home real estate market is beginning to show and the highest interest rates in over a decade are all leading this market to the tipping point.
Now Multiply that buy 3 and this is where the problems really converge. The commercial real estate market (CRE) has a valuation 3x larger. 32k commercial properties for sale with 20,000 units for lease, half of those have been on the market for over a year, that’s a lot of cash flow going uncollected for more than 12 months. The market is saturated with commercial space; millions of square feet going unused. Many of these properties are new construction. Financed with building loans and leveraged against existing properties that have been losing equity over the last 5 years. it seems like something here needs to crack. There are over 950 billion of CRE loans maturing this year with rates between 6.5-8% this is going to push expenses much higher for owners/buyers and inreturn to any business that lease this space, 3000 people and 1500 businesses are filling for bankruptcy a month in Texas. Over 40k businesses have filed over the trailing 12 months, one in fifteen bankruptcies is filed in Texas. This is an ominous sign of the current Texas economy.
what are your thoughts, and what’s the next domino to fall?
https://www.reddit.com/r/REBubble/comments/1v4gw6i/houston_we_have_a_problem/