Texas Housing Markets: Metropolitan vs. Border Communities Luis Bernardo Torres Ruiz, Ph.D. Research Economist El Paso Branch Dallas Federal Rio Grande Economic Association September 22, 2014
Contents 1. Overview 2. Housing Demand Supply Differences 3. Concluding Remarks
Overview After the recent economic downturn, the Texas economy has outperformed the nation. The same can be said about the Texas housing market that avoided a housing price bubble and subsequent bust. The Texas economy did register a decline that was later in coming and of less magnitude compared to the country. Unfortunately, Texas noteworthy economic performance has not been homogenous across regions. A partial explanation for the differences in Texas regional growth rates is the presence of a strong oil and gas and/or technology sector versus other parts of the state.
Overview These variations in industry mix and other factors have led to housing market differences, especially between the state s major metropolitan statistical areas (MSAs) in comparison to the border cities. Growth in these industries create jobs for a more highly skilled workforce that pay higher wages and require a higher degree of education. Employment opportunities attract migration from other parts of the state and country causing the population to grow, the demand for housing to expand and home prices to increase at a higher rate.
Overview This expansion cycle for Texas Major MSAs (Austin, Dallas- Fort Worth, Houston and San Antonio) generates variations in housing markets with other regions in the state. This is particularly true in the four principal Border MSAs (El Paso, Laredo, McAllen and Brownsville).
Overview The energy and technology industries are not prevalent in the Border regions, which are greatly influenced by the performance of the Mexican economy and the presence of the federal government Specifically, large transportation sector serving international traffic, retail sector inflated by also serving the consumers across the border, and a government sector comprised of border enforcement, and public programs that address the high poverty levels.
Overview To analyze a housing market one, must look at the fundamentals that constitute the market; in other words one must look at the determinants of demand and supply. Demand side factors include: demographic characteristics, income growth, employment growth, changes in financing mechanisms or interest rates, local attitudes, tastes and preferences, and locational characteristics such as accessibility, schools, and crime.
Supply side factors include: Overview construction costs, interest rates, age and quality of the existing housing stock, building technology, land availability, and the industrial organization of the housing market.
Contents 1. Overview 2. Housing Demand and Supply Differences 3. Concluding Remarks
The first major difference in the housing markets: sheer size Population by Major and Border MSA in 2012 (% of Texas Total) Population in the Major and Border MSA in 2012 (thousands of persons) Major Border Rest McAllen-Edinburg-Mission Laredo 26% El Paso Brownsville-Harlingen San Antonio-New Braunfels 9% 65% Houston-The Woodlands-Sugar Land Dallas-Fort Worth-Arlington Austin-Round Rock 0 1,0002,0003,0004,0005,0006,0007,000 Source: U.S. Census Bureau Source: U.S. Census Bureau
The rate of population growth has not been that different between the Major MSAs and the border areas. Average Population Growth (%) in the Major and Border MSA from 2001 to 2012 (%) McAllen-Edinburg-Mission Laredo El Paso Brownsville-Harlingen - Texas 1.9% - U.S. 0.9% San Antonio-New Braunfels Houston-The Woodlands-Sugar Land Dallas-Fort Worth-Arlington Austin-Round Rock (%) Source: U.S. Census Bureau 0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5
A major difference has been net migration domestically. People have been leaving the Border MSAs faster than they have been moving into them. Accumulated Net Domestic Migration in the Major and Border MSA from 2001 to 2012 (thousands of persons) McAllen-Edinburg-Mission Laredo El Paso Brownsville-Harlingen San Antonio-New Braunfels Houston-The Woodlands-Sugar Land Dallas-Fort Worth-Arlington Austin-Round Rock Source: U.S. Census Bureau -50 0 50 100 150 200 250 300 350 400 450
The negative net migration in the Border MSAs has been offset by a positive international immigration to the Border MSAs. Accumulated International Migration in the Major and Border MSA from 2001 to 2012 (thousands of persons) McAllen-Edinburg-Mission Laredo El Paso Brownsville-Harlingen San Antonio-New Braunfels Houston-The Woodlands-Sugar Land Dallas-Fort Worth-Arlington Austin-Round Rock Source: U.S. Census Bureau 0 50 100 150 200 250 300 350 400
The characteristics of the population between the Major MSAs and the border ones are different with respect to education, age and race. Education Attainment for Population 25 years and over in the Major and Border MSA from 2008-2012 (% of local population >= 25 years) Population Less than 25 years in the Major and Border MSA from 2008-2012 (% of total local population) High school/ged or alternative credential Bachelor's and master's degree McAllen-Edinburg-Mission McAllen-Edinburg- Mission Laredo Laredo El Paso Brownsville-Harlingen San Antonio-New Braunfels Houston-The Woodlands-Sugar Land Dallas-Fort Worth-Arlington El Paso Brownsville-Harlingen San Antonio-New Braunfels Houston-The Woodlands- Sugar Land Dallas-Fort Worth- Arlington - Texas 37.2% - U.S. 34.0% Austin-Round Rock % of population 25 years older 0 10 20 30 40 Austin-Round Rock (%) 0 10 20 30 40 50. 2008-2012 American Community Survey 5-Year Estimates Source: U.S. Census Bureau. 2008-2012 American Community Survey 5-Year Estimates Source: U.S. Census Bureau
The Houston MSA has the more diverse population of both groups, and the Austin MSA is the only one where the % of males is greater than of females. Population by Race in the Major and Border MSA in 2012 (% of total local population) Population by Gender in the Major and Border MSA in 2012 (% of total local population) Anglo Hispanic Other McAllen-Edinburg-Mission Laredo El Paso Brownsville-Harlingen San Antonio-New Braunfels Houston-The Woodlands-Sugar Land Female McAllen-Edinburg-Mission Laredo El Paso Brownsville-Harlingen San Antonio-New Braunfels Houston-The Woodlands-Sugar Land Male Dallas-Fort Worth-Arlington Austin-Round Rock 0% 20% 40% 60% 80% 100% Sources: The Texas State Data Center and Office of the State Demographer Dallas-Fort Worth-Arlington Austin-Round Rock 0% 20% 40% 60% 80% 100% Sources: The Texas State Data Center and Office of the State Demographer
The Major MSAs will register the biggest growth in population through 2050, and the Hispanic population will represent the majority of the population in the coming years. Population Projections for the Major and Border MSA in 2050 (thousands of people) Population Projections by Race for the Major and Border MSA in 2050 (% of total local population) McAllen-Edinburg-Mission Anglo Hispanic Other Laredo El Paso Brownsville-Harlingen San Antonio-New Braunfels Houston-The Woodlands-Sugar Land Dallas-Fort Worth-Arlington 2050 2012 McAllen-Edinburg-Mission Laredo El Paso Brownsville-Harlingen San Antonio-New Braunfels Houston-The Woodlands-Sugar Land Dallas-Fort Worth-Arlington Austin-Round Rock Austin-Round Rock - 4,000 8,000 12,000 16,000 Sources: The Texas State Data Center and Office of the State Demographer % of total population 0% 20% 40% 60% 80% 100% Sources: The Texas State Data Center and Office of the State Demographer
Household formation, a major factor in the demand for housing, increased in both the Major MSAs and the border one. The rate of increase in the number of households has been very similar. Households by Major and Border MSA 2005-2012 (% of Texas total ) Average Household Formation Rate (%) Major and Border MSA 2006-2012 (%) Major Border Rest McAllen-Edinburg-Mission 28% Laredo El Paso - Texas 1.7% - U.S. 0.6% Brownsville-Harlingen San Antonio-New Braunfels 7% 65% Houston-The Woodlands-Sugar Land Dallas-Fort Worth-Arlington Austin-Round Rock % 0 1 2 3 4 5. American Community Survey 1-Year Estimates Source: U.S. Census Bureau. American Community Survey 1-Year Estimates Source: U.S. Census Bureau
A very key difference is the median household income in the Major MSAs compared to the Border MSAs. Median Household Income for the Major and Border MSA in 2012 ($) McAllen-Edinburg-Mission Laredo El Paso Brownsville-Harlingen - Texas $50,740 - U.S. $51,371 San Antonio-New Braunfels Houston-The Woodlands-Sugar Land Dallas-Fort Worth-Arlington Austin-Round Rock $ 0 10,000 20,000 30,000 40,000 50,000 60,000. American Community Survey 1-Year Estimates Source: U.S. Census Bureau
In contrast, the average real rate of increase of median household income for the Border MSAs has been higher than the Major Texas MSAs. Median Household Income Growth (%) for the Major and Border MSA from 2006-2012 (%) McAllen-Edinburg-Mission Laredo El Paso Brownsville-Harlingen San Antonio-New Braunfels - Texas 0.4% - U.S. -0.8% Houston-The Woodlands-Sugar Land Dallas-Fort Worth-Arlington Austin-Round Rock (%) -1.0-0.5 0.0 0.5 1.0 1.5 2.0 2.5 3.0. American Community Survey 1-Year Estimates. Converted to real terms with the Consumer Price Index U.S. city average 1982-84=100 Sources: U.S. Census Bureau and Bureau of Labor Statistics
Output is a key economic difference between both areas that shows the scale of both group s economies. Gross Metropolitan Product for the Major and Border MSA in 2012 (% of Texas Gross State Product ) GDP per Capita for the Major and Border MSA in 2012 ($) Major Border Rest McAllen-Edinburg-Mission Laredo - Texas $53,623 - U.S. $49,587 23% El Paso Brownsville-Harlingen 4% San Antonio-New Braunfels Houston-The Woodlands-Sugar Land 73% Dallas-Fort Worth-Arlington Austin-Round Rock ($) 0 20,000 40,000 60,000 Source: Bureau of Economic Analysis Source: Bureau of Economic Analysis
The Major MSAs outperformed the Border ones growing at a higher rate from 2002 to 2012. Average Gross Metropolitan Product Growth (%) for the Major and Border MSA from 2002 to 2012 (%) McAllen-Edinburg-Mission Laredo El Paso Brownsville-Harlingen - Texas 2.9% - U.S. 1.5% San Antonio-New Braunfels Houston-The Woodlands-Sugar Land Dallas-Fort Worth-Arlington Austin-Round Rock (%) 0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0 4.5 5.0 Source: Bureau of Economic Analysis
Differences in employment give way to differences in housing market characteristics. Private Non-Farm Employment for the Major and Border MSA for 2012 (% of Texas Total Employment ) Private Non-Farm Employment Growth (%) for the Major and Border MSA from 2002 to 2013 (%) Major Border Rest McAllen-Edinburg-Mission Laredo 25% El Paso Brownsville-Harlingen - Texas 1.2% - U.S. 0.2% 7% 68% San Antonio-New Braunfels Houston-The Woodlands-Sugar Land Dallas-Fort Worth-Arlington Austin-Round Rock Source: Bureau of Labor Statistics (%) 0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 Source: Bureau of Labor Statistics
Industry mix is important determining an area s dependence on growing or shrinking industries (e.g. regions with energy and technology industries). Industry Mix for Employment with U.S. Employment as benchmark 2012 Texas Austin- Round Rock Dallas-Fort Worth-Arlington Houston-The Woodlands- Sugar Land Location Quotient(LQ) > 1 Specialization in in a given industry San Antonio- Brownsville- New Braunfels Harlingen Industry Civilian employed population 16 years and over Agriculture, forestry, fishing and hunting, and mining 1.7 0.4 0.6 1.8 0.8 1.4 0.6 2.3 1.5 Construction 1.3 1.3 1.2 1.5 1.2 1.1 1.0 1.0 1.3 Manufacturing 0.9 0.8 1.0 1.0 0.6 0.6 0.7 0.2 0.4 Wholesale trade 1.1 0.8 1.1 1.3 1.0 0.9 1.2 1.1 1.1 Retail trade 1.0 1.0 1.0 0.9 1.0 1.1 1.0 1.1 1.2 Transportation and warehousing, and utilities 1.1 0.6 1.3 1.2 0.9 1.0 1.2 2.9 1.2 Information 0.8 1.3 1.1 0.7 0.9 0.8 0.8 0.4 0.5 Finance and insurance, and real estate and rental and leasing 1.0 1.1 1.4 0.9 1.3 0.8 0.9 0.5 0.6 Professional, scientific, and management, and administrative and waste management services 1.0 1.3 1.2 1.1 1.0 0.7 0.9 0.7 0.7 Educational services, and health care and social assistance 0.9 0.9 0.8 0.9 1.0 1.3 1.1 1.1 1.3 Arts, entertainment, and recreation, and accommodation and food services 0.9 1.1 0.9 0.8 1.1 1.0 1.0 0.7 0.8 Other services, except public administration 1.1 0.9 1.0 1.2 1.0 0.9 0.9 1.0 1.2 Public administration 0.9 1.4 0.6 0.7 1.1 1.1 1.6 1.4 0.9 Industry Hachman Index between 0 and 1, where = 1 diversified and = 0 specialized/concentrated Civilian employed population 16 years and over 0.98 0.95 0.97 0.95 0.98 0.95 0.96 0.75 0.90. Source: Bureau of Economic Analysis. El Paso Laredo McAllen- Edinburg- Mission
The general housing characteristics within the Border MSAs differs significantly from the overall statewide measures and even more significantly from the Major MSAs. Housing Characteristics Summary for Major and Border MSA's in 2012 Texas Major Border (%) Total (%) Total (%) Total Total housing units 10,154,835 6,487,311 63.9 752,634 Occupied housing units 8,970,959 88.3 5,868,963 90.5 673,653 89.5 Vacant housing units 1,183,876 11.7 618,348 9.5 78,981 10.5 Year Structure Built Built 2000 to 2009 2,254,074 22.2 1,618,808 25.0 185,308 24.6 Rooms With 5 rooms 2,211,840 21.8 1,248,788 19.2 194,547 25.8 Housing Tenure Owner-occupied 5,586,856 62.3 3,541,891 60.3 430,333 63.9 Average household size owner-occupied unit 3.0 3.0 3.5 Average household size renter-occupied unit 2.7 2.6 3.2 Value $50,000 to $99,999 1,348,681 24.1 721,449 20.4 150,994 35.1 $500,000 to $999,999 174,034 3.1 141,566 4.0 4,124 1.0 Median (dollars) 129,200 149,138 94,895 Mortgage Status Housing units with a mortgage 3,412,384 61.1 2,409,525 68.0 229,077 53.2 Monthly Owner Costs (%) of Household Income with a mortgage 35.0 % or more 745,504 22.0 528,194 22.0 62,352 27.6 without a mortgage 35.0 % or more 219,858 10.2 118,658 10.6 24,699 12.6 Gross Rents (%) of Household Income Occupied units paying rent 35.0 % or more 1,233,594 39.5 856,775 39.0 96,702 44.8 Owner- occupied 35.0 % or more 965,362 16.8 646,852 17.6 87,051 19.9. American Community Survey One-Year Estimates Source: U.S. Census Bureau
New Home Construction All four of the Border MSA communities, like the rest of the country and Texas, experienced a sharp increase in new home construction activity beginning in the mid-to-late 1990s that peaked between 2003 and 2006. The 2007 Recession took its toll on construction activity in every community reducing the number of new homes built dramatically throughout the state. The rebound has not been even among the four metro areas on the Border. Recovery in new home construction statewide and among the four Major MSAs in the state has not been identical but has been generally stronger than in the Border communities.
1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 Brownsville and McAllen have been slower to recover from the declines in new home permits from the mid-2000s. 7,000 Single-Family Home Permits McAllen-Edinburg-Mission 1980-2012 (# of Permits) 3,500 Single-Family Home Building Permits Brownsville-Harlingen 1980-2012 (# of Permits) 6,000 5,000 - Average since 1980 = 3,543 per year 3,000 2,500 - Average since 1980 = 1,600 per year 4,000 2,000 3,000 1,500 2,000 1,000 1,000 500 0 0 Sources: U.S. Census Bureau and Real Estate Center at Texas A&M University Sources: U.S. Census Bureau and Real Estate Center at Texas A&M University
1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 El Paso and Laredo, on the other hand, have reached their longterm average level of annual new permits reflecting a somewhat stronger recovery. Single-Family Home Permits El Paso 1980-2012 (# of Permits) Single-Family Home Building Permits Laredo 1980-2012 (# of Permits) 5,000 2,000 4,000 - Average since 1980 = 2,677 per year 1,500 - Average since 1980 = 914 per year 3,000 1,000 2,000 500 1,000 0 0 Sources: U.S. Census Bureau and Real Estate Center at Texas A&M University. Sources: U.S. Census Bureau and Real Estate Center at Texas A&M University
1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 The four Major MSAs have either exceeded their long-term average level of annual permitting or come very close to doing so, especially Austin and Houston. Single-Family Home Permits Austin-Round Rock 1980-2012 (# of Permits) Single-Family Home Building Permits Houston-The Woodlands-Sugar Land 1980-2012 (# of Permits) 18,000 60,000 16,000 14,000 50,000 12,000 10,000 8,000 - Average since 1980 = 7,823 per year 40,000 30,000 - Average since 1980 = 24,229 per year 6,000 20,000 4,000 2,000 10,000 0 0 Sources: U.S. Census Bureau and Real Estate Center at Texas A&M University Sources: U.S. Census Bureau and Real Estate Center at Texas A&M University
1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 Permits in DFW and in San Antonio still trailed the long-term average level but not by much. Single-Family Home Permits Dallas-Fort Worth-Arlington 1980-2012 (# of Permits) Single-Family Home Building Permits San Antonio-New Braunfels 1980-2012 (# of Permits) 50,000 14,000 40,000 - Average since 1980 = 26,325 per year 12,000 10,000 - Average since 1980 = 6,540 per year 30,000 8,000 20,000 6,000 4,000 10,000 2,000 0 0 Sources: U.S. Census Bureau and Real Estate Center at Texas A&M University Sources: U.S. Census Bureau and Real Estate Center at Texas A&M University
Months of Inventory A useful measure of the relative supply of houses offered for sale and the demand for housing within a local market. A high number of sales (demand) coupled with a low number of homes offered for sales (supply) yields a low months inventory. A large number of homes listed for sale relative to the number of monthly home sales, generates a high months inventory measure. The months of inventory is computed as the number of available listings in the local MLS system divided by the average number of sales reported in the immediately preceding 12 months. Historically, the statewide benchmark for the months supply of home inventory available for sale equaled around 6.5 months. If the months inventory falls significantly below that level, it reflects a very tight, sellers market with increasing prices. If the months inventory is significantly higher than normal, it typically signifies a buyers market with weak or declining prices.
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Among the Major MSAs, the typical inventory level is closer to six, during the past two years; the months inventory in all of the Major MSA markets has fallen dramatically. 10 Single-Family Home Months of Inventory Austin-Round Rock 1980-2012 (# of Months) Single-Family Home Months of Inventory Dallas-Fort Worth-Arlington 1980-2012 (# of Months) 14 8 - Average since 1990 = 5.2 per year 12 - Average since 1990 = 6.6 per year 6 10 8 4 6 4 2 2 0 0 Sources: U.S. Census Bureau and Real Estate Center at Texas A&M University Sources: U.S. Census Bureau and Real Estate Center at Texas A&M University
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Inventory is extremely tight, and in many cases, homes are selling almost simultaneously with being listed, with the exception of San Antonio. Single-Family Home Months of Inventory Houston-The Woodlands-Sugar Land 1980-2012 (# of Months) Single-Family Home Months of Inventory San Antonio-New Braunfels 1980-2012 (# of Months) 10 16 8 - Average since 1990 = 6.8 per year 12 - Average since 1990 = 7.7 per year 6 8 4 2 4 0 0 Sources: U.S. Census Bureau and Real Estate Center at Texas A&M University Sources: U.S. Census Bureau and Real Estate Center at Texas A&M University
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 There s considerable variation between Border and Major MSAs longterm average months inventory level. Brownsville, McAllen all have long-term average months inventory levels greater than a year. Single-Family Home Months of Inventory Brownsville-Harlingen 1980-2012 (# of Months) Single-Family Home Months of Inventory McAllen-Edinburg-Mission 1980-2012 (# of Months) 20 - Average since 1990 = 13.9 per year 25 16 20 - Average since 1990 = 15.9 per year 12 15 8 10 4 5 0 0 Sources: U.S. Census Bureau and Real Estate Center at Texas A&M University Sources: U.S. Census Bureau and Real Estate Center at Texas A&M University
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 El Paso s and Laredo s supply of homes available for sale, by comparison, are closer to the statewide and Major MSAs averages. Single-Family Home Months of Inventory El Paso 1980-2012 (# of Months) Single-Family Home Months of Inventory Laredo 1980-2012 (# of Months) 12 10 - Average since 1990 = 7.3 per year 10 8 - Average since 1990 = 7.9 per year 8 6 4 6 4 2 2 0 0 Sources: U.S. Census Bureau and Real Estate Center at Texas A&M University Sources: U.S. Census Bureau and Real Estate Center at Texas A&M University
The demographic and economic differences from the demand side in conjunction with inventory and housing characteristics from the supply side have given way to dissimilarities in home prices. Median Home Prices for the Major and Border MSAs in 2012 ($) McAllen-Edinburg-Mission Laredo El Paso Brownsville-Harlingen - Texas $158,000 - U.S. $176,800 San Antonio-New Braunfels Houston-The Woodlands-Sugar Land Dallas-Fort Worth-Arlington Austin-Round Rock Source: Bureau of Economic Analysis - ($) 50,000 100,000 150,000 200,000
Since 2004, median household prices have increased on average more in the Major MSAs than that of the border ones, based on demographic and economic performance of the recent years. Median Home Prices for the Major and Border MSAs from 2005 to 2012 ($) 180,000 170,000 Major Border 160,000 150,000 140,000 30.5% 32.6% 130,000 31.0% 120,000 110,000 100,000 2005 2006 2007 2008 2009 2010 2011 2012 Source: Bureau of Economic Analysis
The Border communities more closely resemble national affordability levels than the major MSAs or Texas. Housing Affordability Index for Major and Border MSAs: 1999-2012 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 United States 1.4 1.4 1.5 1.4 1.4 1.3 1.2 1.1 1.1 1.3 1.8 1.8 1.9 2.0 Texas 1.7 1.6 1.7 1.7 1.8 1.8 1.7 1.5 1.5 1.6 1.9 2.0 2.0 2.1 Major MSAs Austin 1.7 1.5 1.7 1.9 1.9 1.9 1.8 1.6 1.5 1.6 1.9 1.9 2.0 2.1 Dallas 1.9 1.7 1.8 1.9 1.9 1.9 1.8 1.7 1.6 1.8 2.1 2.2 2.2 2.3 Fort Worth 2.7 2.6 2.8 2.6 2.7 2.7 2.4 2.2 2.1 2.4 2.7 2.9 3.1 3.3 Houston 2.1 1.9 2.0 1.9 2.0 2.0 1.9 1.7 1.5 1.7 2.0 2.1 2.2 2.3 San Antonio 1.8 1.7 1.9 1.8 1.9 1.9 1.6 1.5 1.5 1.6 1.9 1.9 2.0 2.1 Average 2.0 1.9 2.0 2.0 2.1 2.1 1.9 1.8 1.7 1.8 2.1 2.2 2.3 2.4 Border MSAs Brownsville 1.5 1.5 1.5 1.2 1.5 1.5 1.3 1.3 1.1 1.4 1.8 1.8 1.8 1.9 El Paso 1.7 1.6 1.7 1.7 1.8 1.7 1.5 1.3 1.1 1.2 1.4 1.5 1.6 1.7 Laredo 1.8 2.1 2.2 2.3 1.6 McAllen 1.4 1.4 1.3 1.4 1.4 1.3 1.3 1.1 1.0 1.3 1.6 1.6 1.6 1.8 Average 1.5 1.5 1.5 1.4 1.6 1.5 1.4 1.2 1.1 1.4 1.7 1.8 1.8 1.8 Source: Real Estate Center at Texas A&M
Contents 1. Overview 2. Housing Demand and Supply Differences 3. Concluding Remarks
Concluding Remarks The structural differences between both groups explains the dissimilarities in the housing markets. The economic differences especially have led to very different housing markets. The Major MSAs technology and energy driven economies have allowed them to prosper more than the border MSAs that are more dependent on services like retail, transportation and warehousing linked to the performance of the Mexican economy.
Concluding Remarks This differences can be reverted in the long run and will depend on the future development of the border economies if they can achieve better economic dynamism allowing their respective housing markets to grow and converge to the housing markets of the Major MSAs.
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