The Lone Star State’s economy and population growth have certainly been surging for the last five years. Even though job growth is booming, housing industry pros have watched with concern in recent months as a drop in oil prices recently put the brakes on home sales for several of the state’s largest metro areas. However, the latest report from the Texas Association or Realtors or TAR, has put their worries to rest, at least for now.
A press release from TAR on May 2nd revealed that for the first quarter of 2016, home sales in Texas were up and housing inventory reached an all-time low. The information was compiled in the 2016-Q1 Texas Quarterly Housing Report. TAR’s chairman, Leslie Rouda Smith, observed that even though there has been a slight downturn in the state’s overall economy, home sales are remaining strong. Smith noted that, “Our state continues to be a hub for relocation activity, business development and job growth.”
The report indicated that in the y-o-y comparison, home sales in the first quarter underwent a 7.8 percent increase. In terms of units, 65,265 homes were sold within that time frame. More good news revealed that the Lone Star State’s median home price improved as well. By the close of the first quarter of 2016, it was up by 5.4 percent to $195,000.
The positive changes have been under the scrutiny of Texas A&M’s Real Estate Center as well. One of the agency’s economists, Jim Gaines, Ph.D., explained it this way: “The Texas economy is experiencing a cooling-off period after a five-year boom, so the Texas housing market’s strong gains despite the current uneasiness in the state economy are remarkable. It will be interesting to see how Texas real estate activity performs in the next two quarters, typically the strongest quarters for home sales every year. That performance will show the full strength of the Texas housing market in 2016.”
What has been happening with the inventory of available housing is further proof that sales have been chugging along nicely! Over the course of 2.8 months in the first quarter of 2016, the rate of existing home inventory dropped 0.6 percent compared to 2015’s Q-1. Texas A&M’s Real Estate Center approximates that a much higher rate, namely between 6.0 and 6.5 months is a level in which the supply and demand for existing homes is balanced.
There was a notable drop for active listings in the Texas market during Q-1. In the y-o-y analysis, listings were down by 11.9 percent. The exact number of active listings was 74,276. The DOM was a brisk 64 days, which is 3 days shorter than last year’s.
Housing industry pros and state economists predict that the combination of rising property values and decreased inventory is likely to make affordable housing a challenge. TAR’s chairman, Smith, responded to these statistics with the conclusion that, “This could become a larger problem if there is not a greater balance between supply and demand in the future.”