midland housing prices

Things look grim for the real estate market in Midland over the next 12 months, as home values are forecast to decrease by 5 percent over the next 12 months. In the second and third year, prices are forecast to decrease 2 percent and remain unchanged, respectively, according to new reports from Local Market Monitor.

In Odessa, home values are predicted to increase by 2 percent over the next 12 months. In the second and third year, prices are forecast to increase 1 percent and 2 percent. Nationally, prices are forecast to increase by 4.9 percent.

Most worrying, the reports have called investment in Midland real estate “dangerous,” giving it a -1.7 score, on a 1 to 10 scale. In Odessa, the rating is a 1.3, putting that city in the “speculative” category.

This is a marked changed from the market of three years ago, when the investment risk for both cities was in the “low risk” category.

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oil prices west texas

New numbers are in for the January real estate market in Midland, and the experts say the drop in oil prices are continuing to affect housing prices.

In Midland, the Local Market Monitor Report analysts predict a 1 percent decrease in home values over the next 12 months. Nationally, prices are forecast to increase by 4.4 percent.

In the last year, the price of West Texas Intermediate futures contracts has fallen almost 20 percent. Friday at the close of markets, it was $29.44 a barrel.

Many analysts say the worst isn’t over yet, and recently the CEO of ConocoPhillips Ryan Lance told investors the oil downturn could stretch into 2017.

“We believe this downturn could last a while longer,” Lance told the Houston Chronicle. “Just a few months ago, we thought the market would rebalance by the second half of 2016.”

But the Local Market Monitor reports predict an upturn in Midland before that: they’re forecasting a 3 percent increase in home values in the second year, and a 5 percent increase in the third.

They’re also saying home values for Odessa will increase by 4 percent over the next 12 months, and in the second and third years, prices will increase 7 percent and 8 percent, respectively.

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midland home values

The December housing numbers from Local Market Monitor Report are not painting a rosy picture of the real estate market in Midland, and home values are forecast to decrease over the next 12 months.

Since their peak in the first quarter of 2015, home prices in Midland have fallen by 3 percent. The average home price in this market is currently $179,091.

Over the past two years, the real estate market in Midland has gone from relentlessly enthusiastic, to more reserved, as the slump in the crude oil market drags on. On Monday, oil prices fell to their lowest level in 12 years, and futures of West Texas intermediate crude for February delivery came in at $31.41 a barrel, a 5.3 percent decrease.

“In June 2014, you had to shell out $110 to buy a barrel of Brent crude. By early 2015, that had plunged to $60,” writes Brad Plumer in his piece today for Vox Energy & Environment. “Today, it costs just $30 to buy a barrel of oil — a level not seen since 2004. It’s a staggering decline.”

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midland odessa real estate marketFourth quarter numbers from Local Market Monitor Report are in for the Midland and Odessa real estate markets and the enthusiasm is being dialed back for both markets.

Notably, they have lowered the investment score for Midland to 2.7, making is speculative. Odessa’s number is now 4.9, making it medium risk. Reports earlier this year had both markets much higher.

midland odessa real estate market

The reports note in both Midland and Odessa, economic growth has been good since the recession because of the development of shale oil deposits and the large energy sector currently dominates the economy. Overall, job growth was good in recent months, but in Midland, growth in the energy sector was poor. In Odessa, job growth was good in recent months, and growth in the energy sector was fair.

Total housing permits in October in Midland were down 16 percent from last year. Single family permits were down 16 percent. In Odessa, total housing permits in October were down 23
percent from last year. Single family permits were down 23 percent.

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Two new reports paint a bright picture of the housing market in Midland and Odessa now and for the next three years.

The Local Monitor Reports, released today, cite a 7 percent increase in Midland home prices over the last 12 months, which puts the average home price at $183,463. In Odessa, prices have gone up 5 percent over the last year and the current average home price is $210,980. In the last three years, home prices were up 10 percent in both markets.

The good news doesn’t stop there. Both markets are scored significantly into the “low risk investment” category. The reports predict an 8 percent increase in home values over the next 12 months in Midland—compare that a national average of 4.6 percent. In the second and third years, prices are forecast to increase 9 percent and 9 percent, respectively.

In Odessa, they predict a 7 percent increase in home values over the next 12 months, and 9 percent in both the second the third years.

Why this rosy glow around the Midland-Odessa housing market? One word: Jobs.

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Midland home prices

Photo: Dan Moyle

Two new reports from Local Monitor Report are projecting big increases in home values in Midland and Odessa over the next three years, almost double the national average. Prices are predicted to rise even more.

Home values for Midland are forecast to increase by 8 percent over the next 12 months—compare that to national forecast of 4.6 percent. In the second and third years, values are forecast to increase 9 percent each year, a 26 percent increase in three years.

Midland home prices are projected to increase even more, at 30 percent over the next three years. In the last 12 months, prices have gone up by 7 percent, bringing the average home price in Midland to $183,463.

In Odessa, the report is predicting a 7 percent increase in home values over the next 12 months, and 9 percent in each of the next two years. That’s a total projected increase of at least 25 percent.

Odessa home prices are forecast to increase more, at 29 percent over the next three years. Odessa home prices have increased by 5 percent in the last 12 months, and the average home price is now $210,980.

All this adds up to a “low risk” categorization by Local Monitor Report for real estate investments in both Midland and Odessa, good news for homeowners and investors, alike.

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Local Market Monitor February

The Local Market Monitor Report for the Dallas, Plano, and Irving areas calls the real estate market “Low Risk.” This is echoing what we’ve heard since November — prices are up, homes are on the market for a 30 to 60 days, inventory is low.

The report forecasts a 3 percent increase in home values over the next twelve months, and says the recession is pretty much over for our area, as jobs are growing, too, thanks to our large finance sector. So there are fewer homes on the market, more demand for homes, and a job growth rate that is almost twice the national rate …

 

That got me wondering. In some areas, I’m seeing the same signs in the same front yards that have been there for months. If the market has such awesome momentum, why aren’t some of these perfectly fine homes in an otherwise great area not selling?

Take this cute, well-preserved midcentury modern in the Ash Creek area of East Dallas. We’ve said (pretty much ad nauseum) that this area has amazing momentum and is growing like gangbusters. Still, this steal of a deal isn’t selling. I wonder why?

What do you think? Are buyers being more picky than normal despite the low inventory? What are you seeing buyers turn their noses up at?

 

 

Local Market Monitor February

The Local Market Monitor Report for the Dallas, Plano, and Irving areas calls the real estate market “Low Risk.” This is echoing what we’ve heard since November — prices are up, homes are on the market for a 30 to 60 days, inventory is low.

The report forecasts a 3 percent increase in home values over the next twelve months, and says the recession is pretty much over for our area, as jobs are growing, too, thanks to our large finance sector. So there are fewer homes on the market, more demand for homes, and a job growth rate that is almost twice the national rate …

 

That got me wondering. In some areas, I’m seeing the same signs in the same front yards that have been there for months. If the market has such awesome momentum, why aren’t some of these perfectly fine homes in an otherwise great area not selling?

Take this cute, well-preserved midcentury modern in the Ash Creek area of East Dallas. We’ve said (pretty much ad nauseum) that this area has amazing momentum and is growing like gangbusters. Still, this steal of a deal isn’t selling. I wonder why?

What do you think? Are buyers being more picky than normal despite the low inventory? What are you seeing buyers turn their noses up at?