Texas’ housing market is slowing. Is the pandemic homebuying frenzy finally over?
The pandemic-spurred housing frenzy might be coming to a close, but that doesn’t mean Texas is likely to transition to a buyers’ market any time soon, said Shelby Kimball, a Realtor and former president of the Greater Fort Worth Association of Realtors.
Housing market indicators like sales growth and price growth are finally slowing. Meanwhile, housing stock and days on the market are rising statewide, said research economist Luis Torres at Texas A&M University’s Real Estate Center.
“We are seeing the market exhibit signs of more normalcy,” said George Ratiu, manager of economic research at Realtor.com. “That being said, it still remains brisk in the sense that demand still outpaces supply.”
Throughout Texas, single-family sales peaked at the beginning of 2021. The Metroplex recorded its highest number of housing sales in the last quarter of 2020, Torres said.
In Fort Worth, changes are slow.
“As far as stock goes, it’s been very small increases,” said Kimball. “I almost hesitate to say ‘increase.’”
Since the holiday season is slow for real estate, he doesn’t expect local housing inventory will grow until late winter or early spring.
When the pandemic shut down the economy in early 2020, housing sales — along with housing prices — exploded.
“This caused the already depleted inventory of homes for sale to reach historic low levels and led to exuberant home price growth,” Torres said.
In Tarrant County, price growth peaked in July, when the median home price in the county reached a record high of $315,000. It fell slightly to $313,544 in August and to $313,250 in September, according to the Greater Fort Worth Association of Realtors.
In the midst of an aggressive sellers market, buyers started to pull back, Kimball said.
“Some got priced out,” he said. “Some just decided to wait.”
As inventory picks up this coming spring, he expects discouraged unsuccessful buyers will be back, since “there’s still a lot of backlog of demand.”
In June, the country was short 5.2 million single-family homes, Ratiu said.
Based on research, Texas cities are best equipped to meet that demand.
“Texas metros are some of the leading cities in the U.S. right now in terms of construction relative to population,” said Ratiu. “We’re seeing Dallas, Austin, Houston actually see an influx of permits and starts in the market. That, to me, is promising.”
This story was originally published November 9, 2021 at 11:22 AM.
