The spring selling season is underway, and those looking to purchase a home in Houston should expect to pay a premium — regardless of price point — Zillow says.
A new study from the real estate authority shows that the annual appreciation of Houston-area home values at all price tiers was at least 7 percent in February 2021, with the most affordable tier growing at an even faster rate.
The lowest tier of home values in the greater Houston metro area grew 9.3 percent year-over-year, to a typical home price of $166,556, Zillow says. Meanwhile, in the middle tier, values were up 8.1 percent to $235,792, and home values in the top tier grew at a slightly lower rate, 7.4 percent to $394,711.
In most major U.S. metro areas, "homes in the entry-level segment of the market most likely to be sought by first-time and/or lower-income home buyers have also grown the most in value over the past year," Zillow says.
Two other Texas metros follow the national trend:
- In Dallas-Fort Worth, the annual appreciation for the lowest tier was 9.5 percent, up to $194,484, compared to 8.6 percent growth in the top tier.
- In the San Antonio metro, the lowest tier appreciated at a rate of 7.9 percent, to a typical home value of $153,904, compared to 7.3 percent for the top tier.
In Austin, however, home values in the most expensive tier grew the fastest, up 14.9 percent to $666,034. At the same time, the lowest tier of home values in the Austin metro area grew 14 percent year-over-year.
“Demand for homes in the Dallas, Houston, and Austin metros is largely uniform across price tiers," notes Zillow economist Arpita Chakravorty. "While home values in the most affordable segment are growing the fastest in Dallas and Houston, the mid- and higher-valued homes are quickly catching up due to strong demand. The spread between appreciation rates in Austin is tightening as well, indicating extreme competition across all price tiers."
Whether you're in the market right now or planning to house hunt in the future, don't expect things to slow down. Looking ahead, Zillow expects the typical home value in each of the Texas metros mentioned to grow by at least 10 percent by next February. For Houston, Zillow predicts a 10.8 percent jump during the year.