Not unlike most cities in the state of Texas, Abilene has undergone some rather encouraging changes since the onset of the recession. Home prices continue to increase, affordability is still able to attract new homebuyers and the local economy appears to be capable of sustaining its positive growth. As a result, Abilene real estate investing should see encouraging activity. For all intents and purposes, Texas real estate has continued its hot streak, and Abilene is no different.
The Abilene real estate market has a median home price of $145,700; which is well below the national average of $203,867. Local indicators, on the other hand, are doing what they can to level the playing field. Average appreciation rates, in particular, are much higher in Abilene than across the rest of the country. In the last year, Abilene real estate has appreciated by as much as 16 percent, nearly three times that of the national average. However, over a three-year period, the national average (28.8%) edges out the Abilene housing market (25.1%). Like the rest of Texas, Abilene has seen its prices grow relative to last year, and experts have no reason to believe the trend won’t continue.
In its current position, Abilene is considered to be a soft seller’s market. Property is in demand due to a limited level of supply, as there are more potential buyers than sellers. Rent prices, on the other hand, are relatively stable. Availability within the rental market is good for the moment. In today’s economy, a renter should be making about $50,000 a year to afford living in the average unit. Rent prices have decreased by 14 percent over the past three months. Buy and hold Abilene real estate investing may not net profits like that of San Francisco or Los Angeles, but demand should keep leases signed.
On top of some rather impressive appreciation numbers, Abilene continues to receive support from a strong local economy. The employment sector, in particular, looks to spearhead both supply and demand in the area. In other words, people who move to Abilene should remain confident in their ability to find a job. With an unemployment rate of 3.7 percent, Abilene is well ahead of the national rate of 5.5 percent, and improving. While job growth is nothing spectacular, it is on par with the national average. It wouldn’t hurt to see this number increase in the coming months.
While Abilene may not have the same attraction as Dallas does for large companies, it is not without consideration. More and more corporations are finding that Abilene can accommodate their needs, without the big city congestion. This news bodes well for the employment sector. New employers have already begun moving to the area for its small town feel and cheaper employment costs.
New housing construction is currently 17.4 percent above its long-term average for the city. However, the increase would have been higher if it was not for a slow down in the single-family housing permit department. Over the last 12 months, permits to build single-family houses declined 4.8 percent. Comparatively, the national average for single-family permits increased 3.1 percent.
While new construction is typically responsible for adding to an area’s inventory, foreclosures and short sales now have a more substantial impact on Abilene’s supply of homes. According to RealtyTrac, the Abilene real estate market has about 70 homes in some state of foreclosure (default, auction or bank-owned). At their current mark, the amount of distressed properties in Abilene’s market is 12 percent less than the previous month, and also 12 percent less than the same time last year.
Even in the face of higher than average appreciation rates, the Abilene real estate market is still more affordable than most. Homeowners in Abilene should expect to dedicate approximately 7.3 percent of their income to monthly mortgage payments. The national average, on the other hand, is upwards of 14 percent.
The following highlights how much equity has been gained relative to the year of the home’s purchase:
- Homes purchased in the Abilene housing market one year ago have appreciated, on average, by $21,998. The national average was $15,753 over the same period.
- Homes purchased in the Abilene housing market three years ago have appreciated, on average, by $35,110. The national average was $53,565 over the same period.
- Homes purchased in the Abilene housing market five years ago have appreciated, on average, by $42,920. The national average was $47,444 over the same period.
Abilene Real Estate Market Summary:
- Current Median Home Price: $145,700
- 1-Year Appreciation Rate: 16%
- Unemployment Rate: 3.7%
- 1-Year Job Growth Rate: 2.1%
- Population: 116,637
- Median Household Income: $39,766