Apparently it takes more than a pandemic to slow down Texas home sales. Despite the global spread of COVID-19 and the disease’s tragic effects, the real estate industry in the Lone Star State seems to be holding on strong.
According to a press release from Texas REALTORS®, Texas home sales may have declined a bit, largely due to the shelter-in-place orders; however, the state’s housing market fared surprisingly well, regardless.
“Even though Texans entered Q2 in the jaws of COVID-19, the housing market held its own,” said Cindi Bulla, chairman of Texas REALTORS®. “The second quarter of 2020 fared amazingly well by comparison to the same period of 2019, which was arguably one of our best years ever. Gov. Abbott’s early declaration of real estate as an essential service allowed Texas Realtors to transition to virtual platforms and carefully choreographed safety protocols for the few necessary in-person contacts, virtually eliminating disruption to the real estate sector.”
Texas Home Sales & Prices
Home sales in the state of Texas dropped 9.9%, with 91,970 homes sold in the second quarter of 2020. However, the statewide median home price increased by 2.9% to $252,000. Of the homes sold in the second quarter, 34.6% were priced between $200,000 and $299,999, the highest share of sales among all price class distributions.
Hope for the Future
If conditions continue to stay the way they are, or if they begin to improve, housing experts believe the Texas market could see an even more impressive third quarter.
Jim Gaines, Ph.D., chief economist with the Real Estate Center at Texas A&M University, commented, “With COVID-19 and the mandatory shut down, the Texas housing market performed as expected in Q2. We have a tighter market compared to last year, causing prices to remain high. However, in June we saw demand pick up with buyers becoming more active and taking advantage of the low interest rates. The housing market is one of the few segments of the economy that has held strong. Barring another shutdown, we anticipate it to perform reasonably well in Q3.”
Inventory and Days on the Market
Active listings declined 22% in Q2 to 88,337 listings. Texas homes spent an average of 57 days on the market during the same time frame, five days more than the second quarter of 2019.
Housing inventory in Texas declined 0.9 months to 3.0 months of inventory. According to the Real Estate Center at Texas A&M University, a market with a balance between supply and demand typically has between 6.0 and 6.5 months of inventory.
Chairman Bulla concluded, “It’s important to note that closed sales are off by only 10% compared to the second quarter of 2019. Pent up demand still resulted in rising prices, though at a slower pace. There is every reason for optimism as we move into Q3. However, our biggest problem remains the availability of affordable inventory.”