In the past year, the province of Teruel, Spain, saw a significant uptick in home sales, with 1,495 homes bought, marking a 3.96% year-on-year increase. This figure represents the fourth highest in history, trailing only behind 2022 (1,522 homes), 2008 (1,895 homes), and the historical record set in 2007 (2,055 homes), according to data released by the National Statistics Institute (INE).

The increase was primarily driven by second-hand real estate, as new construction transactions declined for the fifth consecutive year. Despite a decrease in mortgage rates and the consequent reduction in mortgages in the second half of the year, only 4 out of 10 buyers requested loans. Consequently, the number of loans and their total amount decreased by 14.5% and 23.2%, respectively.

According to the INE, this increase in housing sales follows a 5.5% drop in 2022, when 1,438 units were sold compared to 1,522 homes in 2022. The historical peak was in 2007, with 2,055 homes bought. Since then, sales declined during the economic recession, hitting a low of 673 homes in 2014 before recovering to exceed 1,000 homes again in 2018. The pandemic caused a dip in 2020, but sales resumed their upward trajectory in 2021 and 2022.

Key Factors Driving the Market

Several factors contributed to making 2024 the fourth best year for home sales since 2007. These include increased buyer confidence, higher household savings rates, and more attractive mortgage conditions. As one real estate expert noted, “The recovery in the housing market in 2023 demonstrates the ‘push’ that the change in the monetary policy of the ECB has meant for many families.” This trend is expected to continue through much of 2025, according to major real estate portals.

Used vs. New Construction

The 1,345 second-hand homes bought in 2024 in Teruel represent the second-highest figure since data collection began in 2007, with the highest being 1,501 units in that year. New construction, however, saw a 21% decrease to 150 operations, the lowest figure since 2017 and far from the 554 operations in 2007. This means that 90% of the sales in the province last year involved second-hand real estate.

Additionally, 1,365 homes were free and only 130 were protected, the lowest figure since 2006, when it was 91. Throughout 2024, housing sales were influenced by fluctuations in interest rates and a shortage of supply, which continued to drive prices up. In December, 113 transactions were formalized, 11 more than in the same month of the previous year.

Financing Trends

The mortgage activity for home purchases in Teruel decreased by 14.5% in 2024 compared to the previous year, with 596 operations recorded. The total amount provided for these operations was 53.5 million euros, a 23.2% decrease from the previous year, with an average amount of 89,796 euros, down 10.2% from 2023.

In addition, 751 mortgages were canceled on homes, 8 less than a year earlier. In the last month of the year, 40 mortgages were signed on homes, one more than the same month in 2023, for a total amount of 3.3 million euros. Last year, 27 mortgages on rustic farms were also registered in the province for an amount close to 9.4 million euros, representing decreases of 44.9% and 36.3%, respectively.

Economic Implications and Future Outlook

The recovery in the housing market in Teruel is a testament to the broader economic trends in Spain. The change in monetary policy by the European Central Bank (ECB) has provided a significant boost to many families, a trend that is expected to continue through much of 2025. However, this buyer appetite occurs in an environment of reduced supply, which is causing price tensions that are likely to continue or even accelerate in the coming months.

From the official schools of Real Estate Agents (COAPI), it is also foreseen that this trend will be maintained in the coming months for a scenario of economic growth in Spain, a stable Euribor, and a solid demand.

Comparisons with the U.S. Market

While the housing market in Teruel shows signs of recovery, it is essential to compare this with the U.S. market. In the United States, the housing market has seen a similar trend of increased buyer confidence and higher savings rates. However, the U.S. market is also grappling with supply chain issues and rising construction costs, which have led to a shortage of new homes. This situation is somewhat mirrored in Teruel, where new construction has been on the decline.

For instance, in cities like Phoenix, Arizona, the housing market has seen a surge in demand, leading to increased prices and a competitive market. This is similar to the situation in Teruel, where the shortage of supply is driving up prices. However, the U.S. market has seen more significant government interventions, such as the introduction of the First-Time Homebuyers Credit, which has helped boost the market.

Challenges and Opportunities

The housing market in Teruel faces several challenges, including a shortage of supply and rising prices. However, there are also opportunities for investment. For instance, the increase in second-hand home sales presents a unique opportunity for investors to purchase properties at a lower cost and renovate them for resale or rental income.

In the U.S., similar opportunities exist in cities like Detroit, Michigan, where the housing market has seen a resurgence in recent years. Investors have been able to purchase properties at a lower cost and renovate them, leading to significant returns on investment. This trend is also evident in Teruel, where the increase in second-hand home sales presents a unique opportunity for investors.

Conclusion

The housing market in Teruel has shown signs of recovery, with a significant increase in home sales and a boost in buyer confidence. However, the market also faces challenges, including a shortage of supply and rising prices. Despite these challenges, there are opportunities for investment, particularly in the second-hand home market. As the market continues to evolve, it will be essential to monitor these trends and adapt to the changing landscape.