The market for homes in Longview is punctuated by low inventory and high demand that are driving up prices.
First quarter sales, through March, show prices were up about 27%, while the number of homes for sale was down almost 49%.
“The supply is very, very low right now,” said LaTeefah Pruitt, a Realtor and member of the Pruitt family that owns State Realty in Longview. “We’re hoping that with the warmer weather that we’ll get some more inventory, especially more than what we saw last year. There’s a definite need for some, and the demand is really high.”
As a result, competition for homes is driving prices up.
“You’ve got so much competition, you’re definitely getting offers for more than what the asking price is,” Pruitt said.
Pruitt said this is an unusual time in the real estate market, but a great time to be in sales. She sometimes has two or three clients looking at the same house, and sometimes, considering other Realtors’ clients, there could be as many as 15 contracts offered.
“It’s very interesting,” she said.
Low interest rates are one piece driving the market, but other factors are at work as well.
“Low rates are certainly a big contributor, but there is also a large population of millennials who are now driving some of the demand for housing,” said Bryan Robinson, senior vice president and director of mortgage lending for Texas Bank and Trust. “People have also spent a lot of time at home over the past year, and despite the increase in material costs, we are seeing a strong demand for home improvement loans to spruce up their current home. The pandemic also pushed many people to work from home, and, as a result, some of those individuals have recognized they need a larger home for that purpose.
Pruitt said the pandemic might be behind the low inventory of homes on the market.
“I think that people are just comfortable where they are right now,” she said. She said people have told her they’re still staying home, not wanting to get out too much.
Low rates could be offset by the higher prices that are resulting from the limited housing inventory, Robinson said.
“This could make it harder, even with low rates, for some individuals to purchase a new home given that home prices are increasing much faster than incomes. An article I read … indicated that the U.S. housing market is short 3.8 million single-family homes (according to Freddie Mac analysis),” she said.
Robinson said it’s likely interest rates will go up, but not “dramatically.”
“I think the general consensus is rates don’t have anywhere to go but up, and as long as we continue to see the economy recover, rates will likely increase some,” he said. “The 10-year bond yield is a strong indicator of where mortgage rates will go, and the experts expect it to rise to around 2% by year end, which also would signal an increase in mortgage rates. Despite the likelihood of rates increasing, they will not go up significantly and will still be very low. While refinance activity may decrease, home buying probably will not be impacted very much.”