New Report: Texas Homes Overvalued
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PLANO (CBSDFW.COM) - Has the drop in oil prices put Texas on the verge of a real estate bubble? A new report by one of the top credit ratings agencies says Texas homes are overvalued by as much as 11%.
As someone who has been trying to sell his home since July, the last thing Travis Krahl needed to hear was the report by Fitch Ratings warning that Texas has the most overvalued home prices in the country.
"It makes me very nervous. You know a lot of your equity is tied up in your home," Krahl said.
The report noted that Texas economies are strong with economic growth outpacing the country as a whole. Nonetheless, Fitch found Texas home prices approximately 11% overvalued.
Falling oil prices have some economists warning that the Texas economy is particularly vulnerable to the energy sector, which could make current home prices unsustainable. That applies statewide, but Krahl hopes any possible correction won't affect the Plano home he's selling.
"I feel a little bit better about Plano 'cause we have all these big corporations that are relocating here, so I feel like Plano might be a little better insulated against some of that than other areas in the state," Krahl said.
Another warning sign of overvaluations the Fitch report pointed out is that since 2011 home prices in Houston, Austin, and Dallas have all risen by more than 20%.
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