Gains in Texas Job Market Contribute to Successful Housing Market
According to the Texas Association of Realtors, the third quarter of 2015 continued Texas' trend of upward growth in the housing market. Scott Kesner, the Texas Association of Realtors' chairman, said Texas could see its best year yet, beating 2007's record for home sales.
While sales continued to rise along with home prices, inventory rose to 4 months from 3.9 in the second quarter. Jim Gaines, chief economist with Texas A&M University's Real Estate Center said this could be due to many Texans selling their homes, potentially in hopes of benefiting from higher interest rates in the future.
Dallas-Fort Worth mirrored the state, with home sales increasing 8.9 percent and median home price going up 10.3 percent. Inventory remained unchanged at 2.7 months.
As Dallas homes continue to be sold, more people are moving to the area. In an interview with D Magazine and several other industry experts, Phil Puckett, the executive vice president at CBRE, a real estate company, explained that contrary to past times when homes were being sold to other Texans, this year's increase indicates an influx of people moving in from out of state.
Job Growth Helps Other Areas
HousingWire reported an increase of a half-million people in the past five years in the area, due to several reasons. For instance, the number of jobs available has been a major draw. Employment went up 11.9 percent between 2005 and 2013, one of the highest increases in the country. This amounted to more than 337,000 jobs. According to another expert who spoke with D Magazine, many companies see opportunity in the Dallas area.
"...In terms of labor, there's a great combination of college graduates a strong post-secondary education market feeding the labor force," Craig Wilson, the executive managing director at Cassidy Turley, told D Magazine. "And, again, there's a lot of people that tend to gravitate toward this area, you know, when looking for opportunities. So the labor force is deep and strong."
HousingWire explained jobs in many industries have been growing. The biggest has been in agriculture and mining, which grew 111 percent. Education and healthcare, and arts, entertainment and food followed, growing 32 and 28 percent, respectively.
As jobs increase in many sectors, one industry is seeing significant job cuts. Falling oil prices have led to decreased employment across the state. In August, the state lost 13,700 jobs, according to the Dallas Morning News. Of these, 10,900 of them were in the oil or manufacturing industries.
Despite the downsizing of the oil and energy sectors, Texas' unemployment rates seem to be doing well. Dallas Fort Worth has one of the lowest unemployment rates at 3.9 percent. Texas had the third-most job gains in 2015 overall.
However, there are those who believe the changes in the oil industry will take its toll on the housing market, eventually. Gains explained to Culturemap Dallas the effect takes time to sink in.
"We went through this in the '80s there is a lag effect of when those prices come down, and it really hits the economy," he told Culturemap. "It's anywhere between one to three years. We know that it is going to impact the state's economy it's going to affect employment throughout the state. It's coming, but it hasn't hit yet."
However, Gains also said the low prices of oil wouldn't completely damage the job market; it will still see increases, though not as many, noting that Dallas' job growth has been impressively high lately. A diverse job market will give Texas the strength to overcome the losses in the oil sector and keep the economy and the housing market strong.