November 03, 2014 — Austin
Texas home sales volume maintained the rapid pace of the summer selling season in the third quarter of 2014, while monthly housing inventory increased on a quarterly basis for the second time in three years, according to the 2014-Q3 Texas Quarterly Housing Report released today by the Texas REALTORS®.
“The third quarter of the year is typically a much slower sales period—summer is over, school has started and families are staying put for the upcoming holiday season. That was not the case this year,” said Dan Hatfield, chairman of the Texas REALTORS®. “Texas home sales continue to slightly exceed last year’s levels. If this trend continues, 2014 will surpass 2013 to become the second-best year ever for Texas real estate.”
According to the report, 80,851 Texas homes were sold in 2014-Q3. This is only 0.63% less than home sales volume in the previous quarter and 0.61% higher than home sales volume in 2013-Q3. While several local Texas markets have experienced slight declines in home sales in 2014, statewide home sales have remained steady due to much-needed gains in housing inventory and a continually strong housing demand.
Monthly housing inventory in Texas increased on a quarterly basis for the second quarter in a row, rising 2.77% from 2014-Q2 to 3.7 months. While inventory is still down 7.5% compared to 2013-Q3, the Lone Star State’s year-over-year decreases in inventory have eased significantly from the sharp 20% to 30% drops experienced over the last two years.
However, it will be some time before the Texas housing inventory returns to 6.5 months, the level which the Real Estate Center at Texas A&M University equates to a balanced housing market. Jim Gaines, Ph.D., economist with the Real Estate Center explains:
“Developers are building homes about as fast as they can, but continued shortages in labor and vacant developed lots are keeping homebuilders from increasing production even further,” said Gaines. “Combined with higher home prices and tougher lending standards, the Texas housing market will remain very competitive for homebuyers into 2015.”
Home prices continued to increase at a steady but slower pace in 2014-Q3. Median price increased 6.84% year-over-year to $188,900, while average price increased 5.91% from 2013-Q3 to $243,548. Only a few local markets are still seeing the near double-digit home price gains that Texas has experienced since 2012. In Texas’s major metros and statewide, home price increases have slowed to between 5% and 9% year-over-year.
Chairman Hatfield concluded, “Approximately 1,600 Americans per day relocate to Texas to take part in our state’s booming job market and economic growth. The future sustainability of the Texas housing market is dependent upon having the right infrastructure in place to support our state’s rapid growth. The Texas REALTORS® encourages Texans to take action by voting for statewide Proposition 1 on Nov. 4, which will be a big step forward in meeting the approximately $5 billion in statewide transportation needs that go unmet each year.”