Hays County homebuyers can anticipate cooldown, economist says

The Hays County housing market will cool down in the coming months, according to projections from Texas A&M Real Estate Research Center Economist Adam Perdue.

Perdue predicts Hays County's rising home prices will level off, as gains in inventory reduce economic pressure on homebuyers.

“We are forecasting that prices are going to kind of flatline for the next few years,” Perdue told the Daily Record. “Maybe a little negative, maybe a little positive. But we're not expecting to see prices fall significantly over the next two or three years, or rapidly over the next two or three years.”

Perdue also predicted, with less certainty, that “prices will on a year-over-year basis be slightly negative for the next year or two.”

According to data furnished by the Center, the median home price for Hays County in April 2022 was $478,850. The following month, that figure dropped to $464,950 and $450,000 by June, after housing inventory more than doubled from 411 to 1,033 listings.

The rebound in inventory follows a historic one-month low Hays County homebuyers experienced at the end of 2020.

Throughout 2020 and 2021, first-time homebuyers, armed with 17% more purchasing power following slashed interest rates, flooded the market, creating the conditions for a housing shortage, according to Perdue.

The most recent available monthly data from March 2022 shows a year-over-year positive  change of 29.4%, or a median home price of $223 per square foot.

In the first quarter of 2022, the Four Rivers Association of Realtors reported that 3,659 Hays County homes were under construction and 166 were finished vacant homes.

Jason Giulietti, president of the Greater San Marcos Partnership, offered a silver lining. He says that housing developments are still at a lucrative price point to match the jobs coming into Hays and Caldwell counties.

“We still offer a good blend of affordability, right?” Giulietti said. “But as we escalate and continue to bring in higher paying jobs, it’s going to change the market a little bit.

“We don’t want to price out our lower sector folks and we don’t want to not have options for our folks on the other end of the spectrum. We need to make sure we have variety.”

For now, the worst appears to be behind homebuyers in Hays County.

"When we get to May 2023, prices will not be nearly as high as in May 2022," Perdue said.