The Texas housing markets rapid growth slowed significantly in the first quarter of 2014, while single-family home prices continued to increase and inventory reached a new historic low, according to the 2014-Q1 Texas Quarterly Housing Report released today by the Texas Association of Realtors.
While the demand for Texas housing has remained strong, single-family home sales growth was relatively flat compared to the first quarter of 2013, said Dan Hatfield, chairman of the Texas Association of Realtors. Severe weather at the beginning of the year, consistently shrinking housing inventory and tighter lending standards created a perfect storm for slowed sales growth and a continued increase in prices.
According to the Texas Quarterly Housing Report, 55,322 single-family homes were sold in Texas in the first quarter of 2014, which is 1.92 percent more than the same quarter of 2013. During the same time frame, the median price for Texas homes was $172,900, up 9.43 percent from 2013-Q1, and the average price increased 10.42 percent to $225,337.
Jim Gaines, Ph.D., economist with the Real Estate Center at Texas A&M University, explained, Its important to remember that Texas housing demand is still strong, being fueled by true economic, job and population growth. In addition, 2013 was the second-best year for Texas real estate. Were comparing current data to very strong historical figures, making year-over-year increases for 2014 much more modest.
During the first quarter of 2014, the statewide inventory of homes decreased by 19.04 percent to 3.4 months, a new all-time low for the state. Inventory is especially low in Texas four major metro areas, where even the metro with the highest inventory, San Antonio at 4.3 months, is still well below the 6.5 months that the Real Estate Center at Texas A&M University cites as a balanced market.
Gaines added, As cautioned in the 2013-Q4 report, continued inventory shortages have begun to inhibit sales volumes statewide. Housing development is on the rise again, but it will be some time before Texas sees the benefits of that activity. While housing demand shows no signs of declining, Texas will likely continue to see constrained home sales growth throughout the rest of the year, while home prices will continue to expand at double-digit rates.
Chairman Hatfield concluded, The upcoming summer selling season is on pace to be one of the most competitive housing markets Texas has ever seen. Both homebuyers and sellers should be prepared for multiple offers on a home at or above listing price, which will also add to the steady increase in home prices. First-time homebuyers should consider taking a homebuyer education course to gain a competitive edge in the market and to make the dream of homeownership more attainable.
Last month, the Texas Association of Realtors and the Texas State Affordable Housing Corporation launched Get Ready: Making Texans Homeowners for Life, a public awareness campaign promoting the benefits of taking a homebuyer education class before purchasing a home. Texans can learn more and sign up for a course at www.GetReadyTX.org.
About the Texas Quarterly Housing Report
Data for the Texas Quarterly Housing Report is analyzed by the Real Estate Center at Texas A&M University using statistics compiled from multiple listing services in nearly 50 markets throughout Texas. The report includes data for single-family home sales over the course of one quarter and is scheduled for release by the Texas Association of Realtors on the following dates each year (or the next business day): Feb. 1, May 1, Aug. 1 and Nov. 1. To view the 2014-Q1 report in its entirety, visit www.TexasRealEstate.com.
About the Texas Association of REALTORS®
With approximately 90,000 members, the Texas Association of REALTORS® is a professional membership organization that represents all aspects of real estate in Texas. We advocate on behalf of Texas REALTORS® and private-property owners to keep homeownership affordable, protect private-property rights, and promote public policies that benefit homeowners. Visit TexasRealEstate.com to learn more.