JP Morgan released their report for the National Real Estate market outlook for 2025 and it is a FANTASTIC summary of all the market forces at work right now in the USA. Read the article here.
Here's a few things that stood out to me:
#1 - They think the housing values will increase by 2-3% in the next 12 months.
This is what we consider a stable "flat" market condition because standard inflation will cause a home to increase 1-3% in value every year.
This is what makes Real Estate an amazing investment over the long term. You lock in a price, and a mortgage term (hopefully a good one) and then the value of the asset naturally increases on its own, and then occasionally gets a turbo boost from the market conditions (see our 2000-2023 market). Meanwhile, your static cost to own it mostly (...ahem...property taxes) stays relatively similar even as the value increases.
I have a theory that some sort of property tax reform will come within the next decade and I think that could turbocharge a market value increase.
#2 - They recognize that while overall supply remains limited, demand is also suffering because the memory of MUCH better interest rates is too fresh in the minds of the public and these current rates are prohibitive to investment and lots of potential buying.
This is one of the most interesting parts of how markets work. There are always multiple opposing forces playing against each other that make up a market. Some people jump to a conclusion that a market is "bad" or "good" based on some of these factors.
This is the part where I tell you the thing I've always told you: Investing and owning Real Estate is like planting trees. The best time to buy a house is 20 years ago and the second best time is right now...because the next 20 years is coming.
#3 - New construction activity is slowing and builders in many markets are slowing or completely delaying breaking new ground on certain projects.
In a growing city like Houston, builders have had a field day for the last 20+ years with essentially unlimited demand. I think this actually will continue to some extent, because as we've discussed before, this state and this town are still attracting people from all over the country, so the negative impacts that affect the whole country are hitting our local builders with far less impact. You can still see thousands of new homes popping up in new subdivisions in every corner of Houston. I just counted and we have 6 new construction projects going for our clients right now so people are definitely still building here.
I don't see this changing for the next decade. Barring a global or nationwide economic fiasco, Houston, and Texas are some of the best economic "high grounds" of this nation.
If you want to get started investing in Real Estate and get your name on some of these properties that are going to increase in value by 50-100K over the next 10-15 years, please call us anytime.
