The pandemic-fueled Texas house-buying “frenzy” is in the rearview mirror, but it’s being replaced by more long-run, sustainable rates of growth on the road ahead, according to a research economist for the Texas Real Estate Research Center at Texas A&M University. The Texas housing frenzy is over.
Housing sales growth and price growth have peaked and are slowing. In addition, months of inventory, listings and days on market have bottomed and are beginning to rise.
Texas housing sales accelerated after the pandemic shut down the economy in March and April of 2020. This caused the already depleted inventory of homes for sale to reach historic low levels and led to exuberant home price growth.
Texas Real Estate Research Center forecasts for 2021 and 2022 include expectations for strong demand, improving inventories, moderate price growth, and slowly rising mortgage rates.
What that means in the field is that instead of getting 20 or 30 offers on a house, buyers and real estate agents are seeing four or five. About 25% of homes that hit the marketer still selling “instantly,” and the 75% that remain are selling within 30 days.
In Dallas-Fort Worth, real estate agents sold 31,486 single-family homes in the third quarter, according to a report from the Texas Realtors Association. That’s 9.3% fewer sales than in the same quarter last year and marks the biggest third-quarter sales decline of any major metro in Texas. Even with the slide, North Texas led the state in total home sales, according to the association.
DFW median home prices for the third quarter climbed to a record-setting $355,000, which is 18% higher than a year ago, according to the TRA. The median home sales price statewide in the third quarter was $310,000 — 16.9% higher than in 3Q 2020.
We can chalk up the strong housing market performance to low mortgage rates, an increased preference for home-purchasing vs. renting, homebuyers not being highly affected by the pandemic, and by the federal government’s transfer payments and suspension of student loan payments.
Dallas-Fort Worth, Austin and Houston recorded their highest number of single-family home sales in the last quarter of 2020, while sales peaked at the start of 2021 in San Antonio and for the state as a whole, citing the A&M center’s research.
Year-over-year price growth peaked in August statewide in Dallas and Houston. Fort Worth and San Antonio posted highs in July, while Austin’s apex came in June.
Months of inventory for the state and its major metro areas bottomed in May, the Texas Real Estate Research Center stats show. The same is true for active listings, with the exception of San Antonio, which posted its low in April. Even though the Texas housing frenzy is over, the overall trend for both new and pending listings signals the supply of homes for sale continues to grow.