2026 Real Estate Forecast

A few weeks ago, we closed on the sale of a property that we had listed, and we closed it as a short sale. And what is a short sale, you might be asking? Well, I’ll explain it to you. It was my very first.

We had a really good article from the Texas Real Estate Research Center, which is from Texas A&M University. This is an update to the one that they put out at the beginning of the year, back in January, and I’m going to give you my two cents. I’m also going to tell you what I’m seeing in real estate if you’re a buyer or seller and any advice that I might have to give you for the upcoming year.

Not just in Texas, the past two years have been very challenging. This whole time, we were waiting for interest rates to go down to help get the economy going as far as the real estate market, houses, everything. And what happened is, over that time while we were waiting for interest rates to go down, the cost of living was increasing.

I thought 2026 was probably going to be more of the same, maybe a little bit better since they were forecasting mortgage rates to decrease a little bit.

The biggest update, whatever you want to call it, in the Middle East, okay? I’m sure this video will get banned because I even said those words. Gas prices being almost a dollar a gallon higher than they were several weeks ago is a big deal.

But for buyers, here’s what’s going on in their heads. For the past two years, they have been put through the ringer. Cost of living has increased, the housing market hasn’t really gone down, interest rates are kind of not that great, and they’re getting squeezed and squeezed and squeezed and squeezed and squeezed.

And what has happened?

The market in our area has been interesting for buyers. I want to say that our phones started ringing off the hook about week two in January, which is very odd. January and February are very slow. And I was going, “Oh my gosh, what’s going on here?” It’s like all of a sudden these buyers started to get off the couch and do something, and I was getting very excited.

Well, here we are, middle to end of March, and it could not be more dead right now. It could not be a more dead market right now. And it is timed with what we see going on at the gas pump.

I’m telling you, that is the mentality of what’s going on with buyers. They’ve been beat to death. Interest rates trickle down even just a little bit over the past couple of months, but none of that matters because when you go fill up your tank of gas, you’re getting squeezed even more.

The buyers are going to continue with this mentality, going, “Yeah, you’re right. Oh my gosh.” I mean, their buying power continues to go down and down and down. And even though they’re talking about interest rates being in the upper fives toward the end of the year, if this doesn’t get under control, we’re going to see a market that is going to be extremely flat and slow.

What does that mean if you are going to be selling your house in the upcoming year or you have it on the market now? I’m just telling my clients, “Hey, buyers are taking forever to make decisions,” and they actually are. If you’re a buyer, you’re like, “Yeah, I’m taking my time. I’m making the right decision, but I’m really thinking about my purchase.”

Whereas before, we’re kind of used to a market where buyers are just like, “Boom, buy it. I want it.”

And in a lot of markets, if you’re selling your house, seller, that means unless your house is some amazing thing, you’re not getting more than the market indicates. You’re probably going to get exactly the same. And in some cases, you might be selling in your core a little bit less than we all thought you were going to be, or it’s going to take a lot longer to sell it because we have to find the right buyer.

I always tell people when they ask me about the economy and what I see, I said at the beginning of the year I thought this was kind of going to be a little bit better because they were saying interest rates were going to go down. And I thought 2026 was going to end up being a little bit better. Didn’t see a boom, but I thought it was going to be a little bit better.

I said, unless something unknown or unforeseen happens, and I would say that’s exactly where we find ourselves in the middle to end of March.

Now I want to know your thoughts as someone who used to be in banking and is now in real estate. Gas prices affect a lot of day-to-day purchases, especially first-time homebuyers. Because you are so monthly-payment-driven by your decisions, this squeezes you, and you are the ones driving the market where we are.

I don’t know. Hopefully things change. I don’t know what that’s going to take. This isn’t in any way a political thing. This is just kind of giving you my take on what I see.

We had a really good article from the Texas Real Estate Research Center…