Just in case you haven’t heard, the housing market has been kicked in the stomach and is still struggling to return to some semblance of normalcy. Everyone has heard about the price declines in Phoenix, Las Vegas, Atlanta and most of Florida.
But what about Texas? What has happened to the price of houses in Texas over the past five years since the housing crisis began? To find answers to questions like this, I like to go to the Federal Housing Finance Agency (FHFA). FHFA is the warden for Fannie Mae and Freddie Mac as they linger in the netherworld between existence and extinction. FHFA has a great website that can tell you home price trends in all of our Texas metro areas.
This chart shows that home prices in Texas have survived the so-called Great Recession virtually unscathed. The index peaked at 191.53 in third quarter 2007. Five years later, the index reading for first quarter 2012 is 191.16.
Let me translate this index into a practical example. If you bought a house in Texas for $100,000 in January 1991, the value of your house increased to $191,500 by the fall of 2007. Not bad. By the end of March 2012, after five years of the roughest housing market in generations, your house is still worth more than $191,000.
What if you were unlucky enough to buy in Texas at the absolute peak of 2007? Well, your house is basically worth exactly what it was five years ago. You got to live in your own home, plant trees and flowers where you want to, and you don’t have to get permission from a landlord before you can get a dog.
Let’s take a look at how buyers in Texas’ largest cities have fared over the past five years. If you were sage enough to see the housing crisis looming in the summer of 2007 and chose not to buy a house in Austin and have been renting for the past five years, well you will have to pay 6 percent more for the same house this summer.
Texas never had the housing bubble to begin with. Our housing market is extraordinarily strong compared with many parts of the country. Let’s see how some other popular locations have fared during the same five-year crisis period.