Wednesday, May 15, 2024
Anyone looking for a house or land to purchase — or those who just like to keep an eye on property values — can see a clear difference in availability of properties now compared to several months ago.
Data shows that houses are typically staying on the market for longer periods of time. But according to Mitch Fast, chief appraiser for the Coryell County Appraisal District, the county, including the Gatesville and Copperas Cove areas, is still considered to be a hot market.
"Historically, whenever you had six months of (property) inventory or less, it was considered a seller's market, and more than six months of inventory is a buyer's market," Fast said. "Typically, there would be between three and six months inventory. A year ago at this time, we only had about 18 days worth of inventory on the market, which is incredible. Now, there's about 2.3 months worth of housing inventory available.”
Following the laws of supply and demand, along with rising property values are rising appraisal rates. That which is harder to obtain is generally considered to be more valuable. That means that when people begin to receive their appraisal notices in the mail, they will tend to reflect more of the hot property market that dominated the county for the first two-thirds of 2022.
The slowdown in the seller's market, which was seen more in the last third of the year, followed continued rises in the prime interest rate by the Federal Reserve. Local property owners can expect to see more of an impact on the slowing housing market on their own property values in 2024 — if the current trend continues.
Based on data from the Texas A&M Real Estate Center, Coryell County property appraisals are up about 15% from this point last year. That data includes commercial, rural land sales and residential property. Much of that increase is attributed to rural land sales, Fast said.
Because of higher inventory available, homes in Copperas Cove are typically priced lower than similar homes in Gatesville. Another factor in Gatesville's high price range, comparatively, is that the community is in a more rural area.
"Fueled partly by COVID, a lot of people in urban areas looked for property in smaller towns, so there was an increased demand for homes in smaller communities," Fast said. "It will be interesting to see if that trend continues, or if more people start to move back to bigger cities. Right now, dollar for dollar, houses are more expensive in Gatesville than in Copperas Cove.
Gatesville's proximity to hot housing markets in Waco, Temple and Killeen should mean that demand for property should not decline substantially anytime soon. Property developers in the Copperas Cove area continue to add large subdivisions, and a planned 590-plus house subdivision in the Oglesby area is another indication that builders anticipate continued demand for local housing.
Property prices have risen dramatically for Coryell County over the past five or six years.
"Back in 2017, it was pretty common to see a lot of houses in Gatesville priced in the $70,000 to $80,000 range," Fast said. "Now, a lot of those homes are priced around $150,000. Just 2% of the houses sold in 2022 (in Coryell County) were for less than $100,000."
The interest rate increase has dampened the housing market somewhat. That's great for qualified buyers, who are seeing the amount of houses on the market increase and stay there longer, but not as good for sellers, who often were able to get bids in less than three weeks.
"What the interest rates did was increase what had been maybe a $1,000 monthly house payment to $1,200, and that decreased the number of people who were able to qualify for a loan," Fast said.
Appraisal rates won't start to reflect those economic patterns immediately.
"Property values are a lagging (economic) indicator," Fast said. "We're usually about a year behind, and it will take a while before we catch up (to any slowing conditions)."
