The number of Texas home sales fell slightly in the third quarter of 2017, according to the 2017-Q3 Texas Quarterly Housing Report released by the Texas Association of Realtors. This is the first time Texas home sales has dropped on a quarterly basis since the second quarter of 2012.
“As anticipated, the aftermath of Hurricane Harvey has had a significant impact on our state’s housing market this fall, as many Texans were forced to postpone their goals of buying or selling a home in order to deal with devastation in their homes and communities,” said Vicki Fullerton, chairman of the Texas Association of Realtors in a statement posted on the organization’s website. “Declines in local market home sales across the state in the third quarter were largely concentrated in regions impacted by Harvey, including the Houston area and the local markets across the Texas coast.”
Texas home sales volume also declined on a year-over-year basis. According to the report, sales were 0.3 percent lower in the third quarter than they were in the third quarter 2016.
The report found that the median price for homes in Texas rose 5.6 percent on a year-over-year basis to $225,000. Less than half (44.5 percent) of the homes sold in the third quarter of 2017 were priced below $150,000 – the price threshold that the Real Estate Center at Texas A&M University considers affordable for entry-level Texas home buyers. This represents a decrease of 0.7 percentage points from the same time period last year. Does this mean it may be harder for first time buyers to find affordable homes in the Lone Star State? Perhaps. However, there is good news.
Monthly housing inventory in Texas increased year-over-year to 4.0 months’ supply. Although this is still well below the University’s benchmark of 6.0 to 6.5 months’ supply needed for a balanced market, if the trend continues, hopeful buyers should have more inventory to choose from in the near future. Likewise, as supply starts to catch up with demand, price appreciation rates could level off. Until then, however, market challenges remain.
“Historically, Texas home sales volume is highest in the second and third quarter each year,” said Jim Gaines, Ph.D., chief economist with the Real Estate Center at Texas A&M University in a statement to the Texas Association of Realtors. “However, shortages in housing stock fueled by population growth and increasing labor and lot shortages continue to put constraints on the Texas housing market.”