Texas is a big, diverse state and isn’t dependent on just one industry. So just because the oil industry is in a slump, it doesn’t mean real estate markets like Dallas, Austin and San Antonio aren’t booming.
The Texas Association of Realtors (TAR) reports demand for homes across the state continued to outpace supply in the first three months of 2016. It says home sales were up sharply while the inventory of available homes fell to an all-time low.
“Our state continues to be a hub for relocation activity, business development and job growth,” said TAR chairman Leslie Rouda Smith.
According to the TAR first quarter housing report, 65,265 homes were sold in Texas in the first quarter of 2016, a 7.8% increase from the same quarter of 2015. The median home price increased 5.4%, to $195,000.
“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,” said Jim Gaines, Ph.D., economist with the Real Estate Center at Texas A&M University.
Second and third quarters will be significant
But the real test, he says, will be the second and third quarters of the year. If the market remains strong, he says it will underscore the health of the Texas housing market.
Fewer homes for sale can dramatically affect prices, and in the first quarter of the year, there was a less than three month supply of homes. As a general rule, six or seven months of supply is a sign of a balanced market.
But sellers aren’t complaining. The TAR report shows that in the first quarter, Texas homes spent an average of 64 days on the market, a decrease of three days compared to the same quarter of the prior year.
Smith notes that low inventory combined with rising property values is making housing affordability a challenge, not just in Texas’s metro areas but across the state.