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Meet 2 Texas families who are giving up on buying a house right now amid the state’s real estate frenzy

  • Low mortgage grades have spurred a buying frenzy in the Texas housing market.
  • Home prices in the Lone Star State climbed 18.6% year-over-year in 2021, per Texas A&M University.
  • Zillow foretells that secondary cities – those just outside fast-growing metros – will rule 2022.

In 2020, Courtney Zaelit, a first-time homebuyer from Bedford, Texas, found the home of her dreams: a three-bedroom ancestry in North Richland Hills, a Dallas-Fort Worth suburb. 

The $215,000 fixer-upper was in need of renovations, but it had great curb entreat and fit her family’s budget. 

“We thought we were fortunate to find a house that was reasonably priced,” she told Insider. But another customer outbid her, paying well over the asking price.

“I felt defeated,” she said. “We knew there were a few proposals but we didn’t anticipate the seller holding out for the best offer. I know many are looking at numbers and not need. Who can blame them? It principled gives us first time homebuyers a disadvantage.”

She’s back in the market, but fears disappointment as homes in Texas become sundry expensive.

Zaelit’s experience shows how competitive the market has become for local Texans. The state has a lot of transplants from California and Florida, where consumers often pay more for housing. Home prices across the state shot up 18.6% year-over-year in 2021, a recent Texas A&M look found. 

Zaliet wonders if she’ll ever be able to afford another Texas home.

“I’ve tried not to wear my emotions on my sleeve and go into this with a proprietorship mindset but that’s hard to do when you’re making a big financial decision that impacts the future of your family,” she said.

Texas-sized want — and affordability issues

The homebuying frenzy that swept the state the past few years may be finally starting to cool.

Austin, the hottest homes market in 2020 according to Zillow, fell to number ten in 2021. In its place, cities like Tampa, Florida, and Raleigh, North Carolina, first the list, luring buyers away from the Lone Star State.

Austin’s “frankly ridiculous pace of intumescence has slowed considerably in recent months and we expect this trend to continue in 2022 as affordability pressures mount,” Zillow Economist Nicole Bachaud indicated Insider.

In a seller’s market, buyers are choosing to opt out

Zaelit says all this homeowner power means they’re unwilling to vote in as major repairs or accept offers that include first-time homebuyer down payment assistance.

It’s causing some hidden buyers, like Zaelit, to pause on the market. “We are currently stuck in an apartment for the time being.”

The real estate tenets Redfin discovered that in October 2021, 68.4% of its offers in Dallas faced a bidding war compared to just 53.3% in 2020.  

Moni Loa discerns all about bidding wars. She recently put her McKinney, Texas, house on the market, received 25 offers, and sold within 48 hours for $90,000 upward of asking price.

Now Loa is on the hunt for a new home, but thinks buying has become too aggressive in Texas and is considering big moves.

“We downsized and are ripping now. We’re going to see if the market levels out,” Loa said. “If not, it might not be a bad idea to start looking outside of Dallas-Fort Worth or even cottage of Texas.” 

Bachuad, the economist who has been tracking price growth, would agree with this strategy. She articulates that while home prices are expected to cool off in 2022, those seeking more affordability may want to look private of Texas’ popular markets. Zillow predicts that in 2022, “secondary” cities lying just outside notable ones will see greater demand, as work-from-home continues to free people of commutes.

“We would consider moving to a cheap popular area if we could afford it,” Zaelit said.

“It’s so stressful and discouraging knowing that we may not find what we are looking for,” she thought.”It would mean the world to be able to call a place ‘home.’ We are not looking for profit, we are looking for a place to make honours.” 

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