Low Texas Mortgage Rates, Job Growth Spur Record Home Sales in Amarillo

“We had an extraordinary year creating jobs in Amarillo,” Coldwell Banker managing broker Randy Jeffers said, leading to a “steady demand of people wanting housing.”

In some cases, those jobs translated into home-seekers new to Amarillo. In others, home shoppers looked to “move up to another level of home.”

The Amarillo Association of Realtors posted 3,306 sales of single-family homes last year, 10.1 percent more than the 3,131 sold in 2005, according to a report compiled by Glenn. The report does not include sales outside Potter and Randall counties.

A report that includes all types of single-family dwellings shows that, with those factored in, sales stood at 3,495 for the year, 6.43 percent above the 3,281 sales logged in 2005, Jeffers said.

This uptick in Texas mortgage demand accounted for a 5.6-percent increase in sales volume, overall, for the Amarillo area, from $401.3 million to $441.6 million.

“Three things always contribute to a good housing market,” Jeffers said. “Number one, job creation. And then, we had great mortgage rates. They’re not the historic lows we’ve seen but they are historically low interest rates. We had a manageable appreciation rate for home values - not the runaway double-digit-type appreciation rate.”

With Texas home loan applications in full swing, the average home prices in the area grew in 2006. At year’s end, they stood at $134,366, compared with $129,001 in 2005. Housing inventory has increased to about 4.5 months.

Glenn said housing developers and home builders have responded to the recent run-up in inventory by starting less homes.

“The only area that ended up the year with a little bit more inventory than we need are the very upper end (homes), from about $300,000 and up,” Jeffers said.

“We’ve got a little more inventory than we’d like to see outside the city limits and inside the city limits. But it’s fairly manageable.”

Jeffers predicted that local builders, even with mortgage loan borrowing conditions optimal, would start fewer high-end homes this year until some of the inventory is sold.

“I think they are reassessing the product line that they’re going to put out this year and they’ll stay under that $300,000 level,” he said.

“Even though we have a little more inventory in those upper-end homes, we also sold more (in 2006) in those upper price ranges. If we don’t just keep piling inventory on, we can certainly manage it in 2007.”