If you want to buy a house in Texas, you might be left wanting, because housing inventory in the Lone Star state just hit an all-time low, according to a new report from the Texas Association of Realtors.
The latest edition of the Texas Quarterly Housing Report showed that housing demand remained strong in the first quarter of 2015, with home sales posting “unseasonal gains.”
According to the report, 57,818 homes were sold in Texas in the first quarter of 2015, a 4.16% increase from the same quarter of 2014. “This is a “significant change” from the first half of last year, when Texas home sales were essentially flat, the Texas Association of Realtors said in a release.
“The first quarter of the year is typically a slow period for homebuying and selling, so we were thrilled to see strong home sales gains statewide in the first part of 2015,” said Scott Kesner, chairman of the Texas Association of Realtors. “Market conditions are ripe for another competitive summer selling season in 2015.”
Thanks to that increase in home sales, monthly housing inventory continued to drop for the first three months of 2015, falling to a new all-time low of 3.1 months in the first quarter.
That’s a decrease of 8.82% from 2014’s first quarter and is less than half the 6.5-month level that the Real Estate Center at Texas A&M University cites as a balanced housing market.
“Homes are being built as quickly as possible, yet most are not in the price range where inventory is needed most – the entry-level market,” said Jim Gaines, Ph.D., economist with the Real Estate Center at Texas A&M University. “Interest rates are still low, but tight lending standards, rising home prices and slim inventory have created a tough market for first-time homebuyers.”
According to the report, the median price for Texas homes was $186,500 in the first quarter of 2015, a 7.8% increase from the same time period last year. The average price increased 6.99% to $240,303.
This year-over-year increase of 6% to 8% is nearly double Texas’ historical increase of 4.1% annually, the report said.
“The demand for Texas real estate is still strong, but our state’s housing market growth will not be sustainable if high homeownership costs, low housing inventory and unfunded transportation needs are allowed to continue,” Kesner said. “That’s why state legislators are working on long-term solutions now that will provide much-needed transportation funding and tax relief to Texas homeowners.”
Gaines said that despite the strong start to year, Texas could be still looking at a down year.
“The impact of falling oil prices has not yet hit Texas real estate, especially in its metro areas,” Gaines said. “Texas home sales could experience a slowdown in the last half of 2015 and, depending on when and at what level oil prices stabilize, end 2015 at a lower level than previous years.”