The Texas housing market has been an emblem of strength throughout the financial crisis, not feeling the same blow that the rest of the nation experienced. And 2014 was not too different, according to the 2014-Q4 quarterly housing report from the Texas Association of Realtors.
Texas finished the year with one of the highest fourth-quarter single-family home sales volumes in Texas real estate history, ending a year-long trend of flat annual home sales growth. The year-end increase in home sales made 2014 the second-best year ever for Texas real estate. And next year should not be too different.
"Texas home sales in the first half of 2015 are expected to be similar to what we've seen in 2014, but continued increases in home prices and record-low inventory levels should still continue," said Jim Gaines, economist with the Real Estate Center at Texas A&M University. "Historically, Texas home prices have only risen 4.5% year-over-year. Continued housing demand, especially in Texas' metro areas, will be critical to sustaining our market's strong housing development in 2015."
Single-family homes sales increased 8.46% to 66,664, which is significantly higher than the 0% to 2% year-over-year increases in single-family home sales seen throughout the first three quarters of 2014.
"While many local Texas markets saw dips in home sales volume throughout 2014, the statewide housing market continued to grow year-over-year," said Scott Kesner, chairman of the Texas Association of Realtors.
"The fourth quarter of 2014 marked three-and-a-half years of continual home sales growth for the Lone Star State and the highest annual home sales volume since 2006 – a testament to the strong and enduring demand of Texas real estate," said Kesner.
However, although Texas home prices continued to grow year-over-year in Q4-2014, it was at a slower pace than the nearly 10% annual increases seen throughout the last two years.
The median price for Texas homes was $185,900, a 7.76% increase from 2013-Q4, and the average price increased 6.99 percent to $240,976.
Double-digit quarterly drops in housing inventory that have occurred since summer 2011 finally ended in the second half of 2014.
But despite this, it still did not prevent Texas housing inventory from hitting an all-time low of 3.3 months in 2014-Q4, a decrease of 8.33% from one year prior. That figure is nearly half the 6.5 months that the Real Estate Center at Texas A&M University cites as a market balanced between supply and demand.
This year is still projected to be a strong year for housing though according to lenders.
“When it comes to the Texas mortgage market, 2015 looks to be both bigger and better than last year, which was a pretty decent year”, Marcus McCue executive vice president and chief business development officer with Guardian Mortgage said in a HousingWire blog. “The housing industry is concerned about falling energy prices, but Texas, compared to other oil prominent states, is still well positioned.”
Texas had an unemployment rate of just 4.9% as of November 2014, down from 6.1% in the year-ago period, according to the most recent statistics available from the U.S. Bureau of Labor Statistics. Texas is expected to have the nation’s fastest annual job growth rate at 2.7% over the next 5 years, according to a Forbes article quoting data from Moody’s Analytics.