During the course of the year, spring and summer tend to be the hottest seasons for home sales, with the pace of closings slowing as fall takes hold and school starts. That’s not what happened in Texas during the third quarter of 2014, says the Texas Association of Realtors Quarterly Housing Report, which was released just now. Additionally, inventory increased this quarter each month, continuing to fuel brisk sales in some areas.
In Dallas, though, sales are down year-over-year by 2.36 percent, while median home prices are up 8.73 percent and inventory is down precipitously from Q3 2013 by 10.71 percent. Logic says that, until inventory increases, home prices will continue to increase and sales will continue their slow, downward trend. Still, some areas are seeing increases (Midway Hollow, Lakewood, Lake Highlands, West Kessler) while some areas and price ranges remain sluggish. All real estate is local, y’all!
“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 TAR chairman Dan Hatfield. “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.”
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According to the report, 80,851 Texas homes were sold in 2014-Q3. This is only 0.63 percent less than home sales volume in the previous quarter and 0.61 percent 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 percent from 2014-Q2 to 3.7 months. While inventory is still down 7.5 percent compared to 2013-Q3, the Lone Star State’s year-over-year decreases in inventory have eased significantly from the sharp 20- to 30-percent drops experienced over the last two years.
While this is good news for sales and continued growth, it will be a while before inventory returns to a comfortable, balanced level — 6.5 months according to economist Jim Gaines with the Real Estate Center at Texas A&M University.
“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.”
As inventory remains tight, home prices have increased a “steady, but slower pace” in the last quarter, the report said. The median home price increased 6.84 percent from the same time last year to $188,900. The double-digit gains in 2012 are still being felt in only a few markets, with Texas’ major metropolitan areas experiencing slower price gains of between 5 to 9 percent year over year. Still Texas is still growing, and according to TAR, that’s going to continue to put strain on the state’s aging infrastructure.
“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,” Hatfield said. “The Texas Association of Realtors encourages Texans to take action by voting for 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.”
What’s your point of view on the ballot propositions? What are you seeing in your neighborhood?
