The Texas housing market has been incredibly hot over the last two years thanks to the flood of people migrating to the state from all over the country. However, for first time in well over a year, home sales are slowing down.
According to a new report from Texas Realtors, the Texas housing market calmed down a little bit in the third quarter, with home sales declining 3.5% compared to the previous year.
That was the first time that quarterly home sales have declined year-over-year since the second quarter of 2020.
While there may have been a decline, that doesn’t mean that housing isn’t still hot in the Lone Star State.
“Although we're seeing a slight decline in homes sold from the same period a year ago, it's important to remember we're comparing to 2020's record-breaking numbers," said Marvin Jolly, chairman of Texas Realtors. "Across the state, we're still experiencing strong demand for housing, and buyers are moving to Texas from all over the nation."
According to Texas Realtors’ report, home sales may have declined, but prices still rose by 16.9% from the third quarter of 2020 to the third quarter of 2021. In the third quarter of 2021, the median sales price for a home in Texas was $310,000.
Of the home sold in the third quarter, nearly 30% were priced between $200,000 to $299,999, the highest share among all the price ranges.
The increase in prices is due to increased demand from buyer influx and lower-than-usual inventory, the report showed.
According to the report, housing inventory in Texas decreased to 1.6 months of supply in the third quarter, down from 2.3 months in the third quarter of last year. The Texas Real Estate Research Center at Texas A&M University states that a market balanced between supply and demand has between six and 6.5 months of inventory.
But there may be a little light at the end of the tunnel.
"The housing frenzy due to the pandemic has possibly peaked,” Luis Torres, research economist with the Texas Real Estate Research Center at Texas A&M University, said.
“Home prices and homes sales are beginning to slow. In addition, months of inventory and home listings have reached a trough and are now increasing,” Torres continued. “Still, for the remainder of 2021, the housing market will be characterized by strong demand with low inventories accompanied by strong price growth, albeit at a slower rate."