A recent home-price forecast for the Houston, Texas real estate market in 2022 predicted that house values across the metro area would continue to rise next year. This Houston housing market forecast was issued by the real estate data company Zillow, in September of 2021. The company predicted home prices in the area would rise by double digits between now and September 2022.
Positive Forecast for Houston Housing Market in 2022
Like most major cities across Texas, the Houston real estate market has experienced a significant increase in home prices and sales over the past year. Limited supply and strong demand from buyers have put upward pressure on home values all across the metro area.
A recent forecast for the Houston housing market predicted that home values would continue to climb through the end of 2021 and into 2022. Similar predictions were issued for other major cities across Texas.
In September 2021, the research team at Zillow issued a positive real estate market forecast for Houston stretching into 2022. By their estimation, the median home value for the Houston-The Woodlands-Sugar Land metropolitan area rose by around 15% over the past year or so.
Looking forward, the company’s forecast predicted that prices would rise by around 12.9% over the next year. This Houston housing market forecast extends into September 2022.
According to a September 2021 statement on the company’s website:
“The typical home value of homes in Houston-The Woodlands-Sugar Land Metro is $258,174. This value is seasonally adjusted and only includes the middle price tier of homes. Houston-The Woodlands-Sugar Land Metro home values have gone up 15.0% over the past year and Zillow predicts they will rise 12.9% in the next year.”
Real Estate Inventory Still Tight, But Improving
Supply levels have a lot to do with the Houston real estate market forecasts and predictions for 2022. For many months now, this metro area has experienced very low inventory levels within the housing market. The same is true for most major cities across Texas.
The short version of the story is that there just aren’t enough homes on the market in the Houston area to satisfy the demand from buyers. This is largely why this housing market has received positive price forecasts extending into 2022.
According to a September 2021 report from Realtor.com, the total number of active real estate listings in the Houston metro area had declined by -25% over the previous 12 months. That means there are fewer homes for sale today than there were a year ago.
But that report also offered a bit of good news or home buyers in the Houston housing market. While total listings were down year-over-year, the report showed a 4.4% increase in the number of new listings. This means there have been more homes coming onto the market in recent weeks.
If inventory growth continues over the coming months, it could affect the Houston housing market forecast for 2022. Recent predictions suggest that home prices in the area will continue to climb. And that seems likely based on current conditions. This real estate market could gradually shift back toward a more normal balance in 2022, especially if more homes come onto the market.
Population Growth Affecting Houston Housing Forecast
Population growth is also affecting Houston real estate forecasts and trends.
According to the U.S. Census Bureau, the population of Houston, Texas rose by 10.7% from 2010 to 2019. Those were the most recent figures available when this article is published. Other cities across the metro area have seen even greater population growth in recent years.
This is another important factor affecting Houston real estate predictions and forecasts for 2022. After all, those new residents need somewhere to live. Population growth tends to increase demand for housing on both the purchase and rental side. It brings more home buyers into the market, increasing competition and boosting prices.
All of this comes at a time when inventory levels are still very low.
Report: Price Reductions Becoming More Common
The September 2021 Realtor.com report also revealed an increase in the number of price reductions within the Houston housing market. The number of real estate sales involving a price reduction from the seller increased by 22% in August 2021, compared to a year earlier.
This is another sign that the Houston housing market might be shifting a bit. It’s still a seller’s market in terms of overall supply and demand. But conditions do appear to be “normalizing” a bit. This is another trend that could carry over into 2022.
Summary of Key Points
We’ve covered a lot of information in this report. So we’ll leave you with a summary of the most important points.
- Houston housing market forecasts for 2022 predict that home values will continue rising over the coming months.
- The Houston real estate market is still experiencing a shortage of supply, relative to demand.
- The good news for buyers is that new real estate listings appear to be rising in 2021.
- The Houston housing market could cool down a bit in 2022, especially if inventory continues to rise.
Disclaimer: This article includes Houston real estate market predictions and forecasts issued by third parties not associated with publisher. MetroDepth makes no claims about future conditions within the housing market or broader economy.