Temperatures in Texas are cooling, but the real estate market remains red hot, according to the third quarter edition of the Texas Quarterly Housing Report released today by the Texas Association of Realtors (TAR).
The report showed 80,105 single-family homes were sold in Texas in third quarter 2013. That is 18.97 percent more than the same quarter last year and, for the second quarter in a row, the highest volume of homes sold in Texas since TAR began issuing the report in 2009.
Sales volume in the third quarter was also almost equal to volume in the second quarter of the year.
“We usually see a drop off in the volume of homes sold between the second and third quarter of the year, as homeowners settle in for the school year," said Real Estate Center Research Economist Dr. Jim Gaines. "We did not see that this quarter, even despite a slight increase in mortgage interest rates during that timeframe.”
Prices increased as well. The median price increased by 10 percent from the same quarter last year, to $177,100. The average price increased by 11.06 percent from third quarter 2012 to $230,474 this quarter.
“Sales volume in Texas had been increasing for some time, but the price increases have been constrained by foreclosures and other distressed sales," Gaines said. "Now, we’ve seen more than a year-and-a-half of price increases that outpace the average rate of appreciation in Texas, which is around 4.5 percent per year. This quarter’s annual double-digit price increase was more than twice that pace. Taken together, it’s clear that high demand for Texas homes is translating into higher prices for home sellers.”
As in past quarters, high demand contributed to a shrinking inventory of Texas homes during the third quarter. The market had four months of inventory, which is 27.27 percent less than the same quarter last year, when inventory was 5.5 months.
“The inventory of homes in Texas is at historically low levels,” said Gaines. “To have only four months of inventory in a market as large as Texas is remarkable. Of the 47 markets included in the report, ten have less than three months of inventory, and that includes several large markets, such as Austin and Dallas.”