WHAT WILL 2023 LOOK LIKE IN
EAST TEXAS REAL ESTATE?
Last updated January 5, 2022.
It is impossible to perfectly predict the future, but there are several things real estate investors and developers should keep in mind as we head into 2023.
For example, now is not the time to start a large residential development. You would have to pay contractors, lose your agriculture exemptions, and get saddled with a high property tax burden with no builders willing to buy lots.
However, the overall trends in East Texas still appear to be positive, and what happens in major Texas markets spills over into smaller Texas markets. Here are some economic trends in Texas:
Strong job growth: Texas has consistently had strong job growth, with the state's unemployment rate remaining below the national average in recent years.
Diverse economy: Texas has a diverse economy, with strong sectors including energy, healthcare, technology, and manufacturing.
Population growth: Texas has experienced significant population growth in recent years, with many people moving to the state for its strong job market and low cost of living.
Low cost of living: Texas has a relatively low cost of living compared to other states, which has contributed to its popularity as a place to live and work.
Export industry: Texas is a major exporter, with its ports and airports playing a key role in the state's economy.
Agricultural industry: Texas has a large agricultural industry, with the state being a major producer of crops such as cotton, wheat, and corn.
Overall, Texas has a strong and diverse economy, with a variety of industries driving growth and development.
So, how does this play into the real estate market?
Certain factors could still drag parts of the real estate economy down, such as rising interest rates that either hurt small developers or cause large real estate portfolios to start selling assets. No one knows for sure if these factors will cause massive disruption in 2023.
However, in contrast to previous market corrections, many assets are secured with healthy, large loan-to-value ratios with the banks. In other words, the banks have required many loan holders to bring significant cash to their real estate loans in recent history and are not likely to find themselves with assets on the books worth less than the price of the note they are holding. Many point to this as a healthy buffer against a crisis, but as with everything, nothing is guaranteed.
The best strategy is to connect with an expert who knows the ins and outs of the East Texas market. That’s where a One Rock agent comes in. We can offer insight into the most recent local trends and how those trends fit into the larger real estate economy. Reach out to a One Rock agent today!