Dive Brief:
- The Texas Association of Realtors’ 2016 Q1 housing report found that inventory in the state is at an "all-time low" of 2.8 months, a downward move from the first quarter of 2015, when housing inventory was at 3.4 months, according to Housing Wire.
- The Real Estate Center at Texas A&M University said the current inventory is 43% to 47% less than a balanced market supply of 6 to 6.5 months.
- The TAR reported that active listings also plunged 11.9% from a year ago to only 74,276, and homes averaged 64 days on the market, a three-day fall from last year.
Dive Insight:
TAR officials said the state's popularity among those wishing to relocate or build businesses there has contributed to consistent demand for homes. Of course, just as in the rest of the country, as availability shrinks, prices rise, creating an affordability issue. The TAR said home prices in Texas saw year-over-year increases of 7% in the first quarter, and the median home price in the state rose 5.4% to $195,000.
Just last week, Realtor.com reported the U.S. real estate market added 2% more active listings from March to April, which translated to nearly 550,000 new listings last month. However, at the pace of current sales, Realtor.com said the increase was not enough to meet demand. And, according to a Zillow report, first-time buyers are struggling to make their first home purchases in the face of a 10% decrease of starter-home availability. If they can find a home that's still on the market, the prices are often prohibitively high.
In the National Association of Realtor's March pending home sales report, Chief Economist Lawrence Yun said the 1.4% increase relative to February was a good sign, but that new construction is critical if there is a chance of meeting rising demand for housing.