Texas Home Sales Up 25 Percent as Prices Surge

HOUSTON – (By Dale King, Realty News Report)— Texas home sales hurtled to a new high of 114,772 home sales during the second quarter of 2021, a hike of 24.7 percent from the second quarter a year ago, said the 2021-Q2 Texas Quarterly Housing Report recently released by Texas Realtors.

The average median price of a Texas home soared 19.1 percent to $300,490, the report noted. But the Austin/Round Rock metro took that number and rolled it even higher. The median price tag of a residence in the Lone State State’s capital city and environs rocketed upward to $470,000, a 42.4 percent uptick compared to the same quarter in 2020.

The percentage climb was nearly double that of the next nearest Texas metro, Dallas/Fort Worth/Arlington, where the median price of a home in the second quarter this year increased 22.4 percent from the same quarter a year earlier.

The top tallies for other Texas MSAs were led by the Houston/The Woodlands/Sugar Land metropolitan region where the median home price nearly mirrored the state average. The H-town price tag hit $300,728, up 17.9 percent from a year earlier. Median price for residences in the San Antonio/New Braunfels region was $280,000, up 14.8 percent from a year earlier. And the El Paso area posted a 13.5 percent increase with a median home price of $195,000.

Covid Impact – Bigger Houses in Demand, Says Tim Surratt

Not only are home prices in Houston hitting new highs, but buyers seem to be opting for domiciles in the higher price ranges, observed Tim Surratt of Greenwood King Properties in Houston, a Realtor for more than 30 years who, coincidentally, grew up in Round Rock near Austin and moved with his family to Houston when he was in high school.

“The number of homes sold for $750,000 and above increased 36 percent year over year in Houston,” he said. “In the next category, $500,000 to $750,000, the year over year increase was 18.9 percent.”

He’s even dealing with house-hunters who have given up the ghost in Austin. “Some people looking for upper-end houses are not happy with Austin,” he said. “In my 30 years of business, this is the first time the supply of homes in Austin has been exhausted. It’s insane.”

Surratt said he had been working with a potential buyer in Austin eyeing a home with a price tag of $5.6 million. Before the bargaining finished, the property owners jacked the price an additional $700,000 – “and my client bowed out.”

A board member of the Houston Association of Realtors, Surratt said he’s seen a definite shift in buyer demand due to COVID. “Prior to the pandemic, people were not that interested in having a study or a second dining room. After COVID hit, they wanted more space. They wanted his and hers parlors, two dens and space for students to work at home.”

As to reports that Houston could be looking at a price drop due to irregularity in the oil industry, Surratt said, “I don’t see that coming. Oil industry jobs are important, but Houston has diversified its workforce enough now.”

Texas Realtors: “Record-Breaking Summer”

“Texas is in the middle of a record-breaking summer selling season with unprecedented demand for housing,” said Marvin Jolly, chairman of Texas Realtors. “Across the state, buyers are having to compete more than ever for houses, leading to a strong increase in home prices.”

Of all homes sold in the second quarter, 30.1 percent were priced from $200,000 to $299,999, the highest share of sales among all price-class distributions statewide. The Texas Realtors report said 34.6 percent of homes that sold in Houston were in that range; 27.3 percent in Dallas and 40.8 percent in San Antonio. But 26.5 percent of buyers in Austin plunked their cash on homes priced in the $500,000 to $749,999 range while the houses priced at $200,000 to $299,999 garnered only 11.4 percent.

El Paso purchasers were the most frugal. A total of 48.4 percent of homes bought were in the $100,000 to $199,999 range – the highest percentage – while the second highest was 33.5 percent for homes in the $200,000 to $299,999 segment.

Nearly every Realtor asked why sales numbers and prices have smashed through the ceiling cited “supply vs. demand.”

“The extremely low level of supply available is holding back sales and pushing up prices, as mortgage rates are still hovering around 3 percent, the economy is expanding, and ongoing demographic trends continue to support housing demand,” said Luis Torres, Ph.D., research economist with the Texas Real Estate Research Center at Texas A&M University.

“The limited inventory for homes priced less than $300,000 is particularly distressing and is stressing home affordability,” he added.

Austin’s Microscopic Inventory

Austin is reaching the strangulation point, said Bill Morris, an Austin Realtor interviewed by Realty News Report. “We have 2 ½ weeks of inventory… maybe a little more.”

A regional VP for the Texas Realtors, Morris said the inventory of homes for sale at the Waco-Temple end of the I-35 corridor “is below a month.”

“A natural location and a well-educated populace,” he said, are drawing major corporations like Hewlett-Packard, Google, Amazon and Tesla to Austin, igniting demand for residences.

With an eye to the future, Morris said, “I don’t think that a damper is coming, there is such strong demand.” He said a supply chain glitch could start to apply the brakes, but he doesn’t see that happening.

Out-Of-State License Plates

“I’ve been as busy as I’ve ever been,” he exclaimed. “I still see a lot of out-of-state license plates out there. I understand between 160 and 180 people a day are moving to Austin.”

File: Texas Home Sales Up 25 Percent as Prices Surge

For more about Texas real estate, check out the book Houston 2020: America’s Boom Town – An Extreme Close Up by Ralph Bivins. Available on Amazon http://tiny.cc/4a2g6y

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