Red-hot Real Estate

Booming Texas real estate market on track for record-breaking year

A new report suggests the Texas real estate market will end the year on a high note.

Photo courtesy of Four Points Sheraton

Texas home sales fell shy of an all-time record last year, but 2015 is proving to be a banner year for the housing market. According to the Texas Annual Housing Report, which features insights from research performed throughout the year, the Lone Star State could close the year with record-breaking sales.

"The Texas real estate market has been firing on all cylinders in 2015. People are relocating to Texas from far and wide, homes in all price classes are in high demand, and the number of available properties is slowly rising," said Scott Kesner, chairman of the Texas Association of Realtors, in a release.

Contributing factors to the market's consistent growth include an influx of out-of-state residents as well as international homebuyers. According to the report, home purchases by international homebuyers contributed more than $8.32 billion to the Texas economy during a 12-month period.

Among the market's strongest segments were luxury home sales and small land sales. Dallas-Fort Worth and Houston led the state in luxury home sales, those priced at $1 million or higher, with 15 percent and 13 percent year-over-year growth, respectively. Small land sales throughout the state increased 20 percent from the previous year.

In quarter three of 2015, Texas housing inventory rose to four months, its highest level in two years. Also during quarter three, median home prices rose 7.7 percent year-over-year to $199,900, and home sales were up 7.8 percent.

"The Texas housing market has exceeded expectations and is on pace to possibly set another record for home sales," Kesner said. "The market will remain highly competitive in 2016, making housing development and affordability key areas of focus throughout the state."

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Homebuyers can afford to be picky as Austin housing inventory rises

Photo by Avinash Kumar on Unsplash

Housing economist Clare Losey said the most significant factor affecting home sales in Austin is high mortgage rates.

The latest real estate report from Unlock MLS and the Austin Board of Realtors (ABoR) has revealed housing inventory is still on a steady rise in the Austin-Round Rock-San Marcos MSA, creating more choices for potential homebuyers as they navigate a high interest rate market.

Residential home sales dipped by a mere 1.5 percent year-over-year from October 2023, amounting to 2,248 closed sales in the Austin-Round Rock-San Marcos MSA. Median prices have also dropped to $430,000, or 3.2 percent less than this time last year. More than 3,300 new home listings were added on the market — a 7.4 percent increase from 2023 — bringing the total number of active home listings to 11,599.

According to Unlock MLS and ABoR housing economist Clare Losey, Ph.D., October's mortgage rates stood at 6.4 percent and are showing no signs of a significant drop in the near future. Even heading into 2025, Losey says potential homebuyers who are biding their time in the hopes of seeing rates plummet "may be in for a long wait."

"In the meantime, sellers must recognize that bringing buyers to the table requires a more aggressive pricing approach," Losey said. "Even in a more balanced market, buyers with limited purchasing power are struggling to meet current price expectations."

As for the overall health of the Central Texas housing market, 2024 Unlock MLS and ABoR president Kent Redding labeled recent news reports that called Austin "ground zero" for a downturn as an "extreme over-exaggeration."

"Austin led the state and nation in record-breaking home price growth and sales activity during the pandemic," Redding said. "For three years, near-zero housing inventory, numerous offers above list price and a rapid-paced market raised home prices and left little negotiating power for buyers. During this record-setting growth, ABoR and Unlock MLS consistently emphasized the unsustainability of the rapid growth, and now, our market is working to balance those extremes."

Central Texas housing trends in October 2024

In Travis County, 979 homes were sold last month — a slight 2.5 percent increase from last year. Median prices remained flat year-over-year at $510,000. Active home listings continued growing to 5,702 homes, which is 9.4 percent more year-over-year.

In Williamson County, 807 homes were sold in October, with median prices steadily dropping to $420,000. There were 1,028 new home listings on the market, showing a 4.5 percent increase from October 2023, bringing the total number of active home listings to 3,369.

Residential home sales dropped by nearly eight percent in Hays County in October, totaling 315 sales. Median prices also fell 5.5 percent year-over-year to $359,000. Active listings rose 6.6 percent year-over-year to 1,740 homes with the addition of 534 new listings on the market.

Meanwhile, 114 homes were sold in Bastrop County last month, which is 4.4 percent more than this time last year. Median prices dropped by a single percentage point year-over-year to $355,000. There were 654 active listings on the market in October, and 152 new home listings, representing a 1.3 percent slip in new inventory when compared to last year.

Only 33 homes were sold in Caldwell County in October to reflect a near 14 percent decline year-over-year from October 2023. Median prices fell to $262,990, which was a 13.5 percent decrease from last year. There were 136 active homes on the market last month, and 40 new homes added on the market.

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