The Texas Recovery
The median price for homes in the state of Texas hit another all-time high in the second quarter of 2013 as demand for homes in the Lone Star State surged again.
"The first half of the summer selling season has been very busy for Texas real estate," said Shad Bogany, chairman of the Texas Association of Realtors. "Demand for homes steadily increased throughout the state, which has prompted competition for properties and is boosting prices."
On a statewide basis, 79,760 single-family homes were sold in the second quarter of 2013, up 17.78% from the same quarter of last year. This also represents the most homes sold in a single-quarter since the Texas Association of Realtors began this report in 2009.
Additionally, demand in the state was as hot as ever, with 43 out of the 47 markets included in the report showing an increase in sales year-over-year.
"Nearly all Texas markets are with multiple offers and buyers are paying above the asking price getting a home that they really want," said Bogany in a video released by the Texas Association of Realtors.
Continuing the steady increase seen in recent years, prices for Texas homes were extremely strong in the second quarter, hitting an all-time high for the quarter. The median price in 2013-Q2 was up 9.98% from the prior year, reaching $177,300. The average price rose 10.44% from the prior year to $235,075. According to the Texas Association of Realtors, those are the highest figures for median and average price ever seen in Texas real estate.
"Nationally, home values are increasing at around 10%, which is similar to Texas. However, that national trend is being driven primarily by markets that dropped significantly in value during the downturn, so it’s really an 'echo-boom,'" said Jim Gaines, economist with the Real Estate Center at Texas A&M University.
Gaines added, "We didn’t have those big price drops in Texas, so to see 10% price increases on top of properties that held more value in recent years means we’re seeing even more significant growth in Texas."
With such strong demand, the inventory of Texas homes has continually lessened. In the second quarter, the Texas market had 4.1 months of inventory, a 30.5% drop from the same quarter last year, when inventory was 5.9 months.
According to The Real Estate Center, a 6.5-month supply of homes in a market indicates a balance of inventory and demand. The Texas inventory supply indicates strong demand for homes.
"With inventory shrinking so rapidly for several quarters now, you’d expect to see more dramatic increases in price. However, I think we may be seeing a situation where Texas has 'just-in-time' housing inventory. Competition for properties is so fierce that homes are selling within days, or even hours, so they’re never recorded as ‘inventory,’ but rather are immediately recorded as a sale," explained Gaines.
In the the CoreLogic Case-Shiller Home Price Indices released Thursday, Austin was among the selected metro areas with the strongest growth in home prices in the first quarter year-over-year. From the first quarter of 2012 to the first quarter of 2013, Austin's home prices appreciated 7.0%. CoreLogic forecasts a 2.3% growth in home prices from the first quarter of 2013 to the first quarter of 2014.
According to Chairman Bogany, in a market as competitive as Texas right now, it’s crucial for buyers and sellers to have current, accurate information.
"It's no longer uncommon for buyers to offer bids above listing prices and for sellers to receive multiple offers on a property. To make sound, timely decisions, you need the best, most accurate data available, which Texas Realtors can provide. That helps sellers earn top-dollar for their properties and helps buyers to capture the home they want," said Chairman Bogany.