The city’s newly built houses were valued at an average of $18,057.62 less this year than those constructed in 2015, according to City of Amarillo permits.
When adjusted to present-day value using the Bureau of Labor Statistics’ Inflation Calculator, the average house built in 2016 was worth less than any year since 2012. By no small coincidence, there were also more houses built in 2016 than in any year since 2012.
New home values are heavily influenced by the number of houses being built around them, as seen in years past. In 2011, when builders received city permits for 553 new houses, the inflation-adjusted average value of $253,426.55 was lower than any other year this decade.
Cultural factors have a sizable impact on the housing market as well. Amarillo is currently stuffed with houses valued at $500,000 or more, which Keller Williams realtor Carol Whittenburg said usually receive little interest.
Whittenburg rejected the idea that wealthy oil-and-gas families are abandoning their estates because of the market’s downturn, insisting Amarillo’s economic diversity protected the real estate market from being destructed by a single industry. Rather, she said, those families have hesitated to invest in a new homes because of general economic uncertainty and pre-election jitters.
“People who are buying bigger homes were holding onto their money to see what the economy would do, what would happens politically,” Whittenburg said. “We have really seen that the larger homes have not been showing, but just this week I’ve had two or three calls on those larger homes.”
Nineteen homes registered through Multiple Listing Service organizations were sold for $500,000 or more in Amarillo and Canyon between June and November, including six for $700,000 or more. Selling the remaining $700,000 homes on the market would take 82 months at the current rate.
Inventories typically sell out in about six months in a balanced market, according to David Grimes Jr., the managing broker for Larry Brown Realty.
The market for less pricey houses, on the other hand, favors sellers. Realtors sold 1,242 homes for $230,000 or less in the two cities between June and November, an average of 207 houses per month. Amarillo projects to sell out of all currently available homes priced $100,000-$139,000 in less than two months.
“My homes that are under $300,000 all show quite a lot, and houses under $200,000 sometimes sell before I even advertise them,” Whittenburg said.
Developers have picked up on Amarilloans’ need for inexpensive housing, Grimes said, which is one reason new home prices are so low.
“That’s part of what’s driving new homes – it’s a lack of inventory,” he said. “You don’t want to oversupply when the demand’s not there.”
Builders used to be restricted by a dearth of habitable land, though Amarillo Association of Realtors Chairman Doug Srader said increased roads and water lines had abated that problem.
“When you don’t have lots, you can’t build a house, no matter what the price is. But the city has worked well with developers on trying to move through that,” Srader said. “We’re in a lot better shape now than we were a couple years ago.”
The cost of single- family homes in Potter and Randall counties has increased slightly less than expected, Grimes said. A “steady” annual appreciation rate is 4 percent, but the price of MLS-registered Potter and Randall homes has increased an average of 3.6 percent per year since 1996, and the 2016 appreciation rate was just 1.9 percent.
Amarillo housing typically has less dramatic price swings than other states, Grimes said. That usually means less money for people selling their houses, but also means homeowners didn’t see their property values depreciate much – if at all – during the recession years.
“That’s one of the advantages and disadvantages of Amarillo. Homes don’t appreciate at 10 to 20 percent per year, but they also don’t lose value at 10 to 20 percent,” Grimes said.