Housing inventory in Texas has hit a 3.5 year low. Housing sales also dropped 2.1% year over year in May, while softer demand drove the average days on market to 61.
Texas’ inventory of homes in the $300,000 price range fell to an all-time low of 2.4 months, according to the Real Estate Center at Texas A&M University’s latest Texas Housing Insight report.
Active listings in May fell the most in Central Texas, after increasing for two months, the report said.
Specifically, Austin, Texas’ inventory fell to 1.9 months; San Antonio’s fell to three months; Dallas’ fell to 2.6; Fort Worth’s fell to 2.4; and Houston’s fell to 3.4 months, which is slightly above the state’s average, the report said.
“Unless a buyer is looking for a luxury home, there are fewer to choose from,” according to Dr. Jim Gaines, chief economist for the Real Estate Center at Texas A&M University. “Texas’ months of inventory fell to a historic 3.2 months in May as the state’s supply of active listings plummeted to its lowest level in three-and-a-half years.”
Closings on luxury homes, or homes priced more than $500,000, also fell. However, the supply of unsold homes in the higher price range increased for the first time this year, the report said.
The supply of luxury homes in Texas now sits at 7.6 months.
Housing starts in total fell 30.1%, hitting a six-year low, the report said. Multifamily was particularly weakened.
Home sales declined the most in Austin at 7.7%, while Houston actually saw home sales rise by 1.9%.
“This disparity exemplifies the shortage of affordable housing during a time when the rocky economic atmosphere may make lower-priced homes look more financially feasible to the potential homebuyer,” Gaines said.