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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What’s a better indicator of a healthy rental market than higher prices for in-demand properties?

In the Dallas-Plano-Irving area, rents are on their way up to the tune of 19 percent over 3 years, according to the folks at Local Market Monitor. The real estate market analysis shows a period of slow growth during 2010, with 2011 and 2012 being largely flat. And then bam — the report says rents will skyrocket. It’ll be harder to find a good apartment, too, as vacancies are projected to get awfully low.

That’s a stark difference from what the report projects for residential sales. While growth is on the horizon, prices won’t increase at nearly the rate that rents are projected to rise.

My interpretation (full disclaimer: I am no expert!) is that it’s a good time to buy if you’re a first-time homebuyer and eligible for a tax credit. You can find a place of your own to build some equity and get out of your rental before prices get too steep!

What do you think?