Hey! Here's a great article by David Jones, a senior editor with the Real Estate Center at Texas A&M University.
Texas’ real estate markets never caught the housing bust bug that spread like the flu across most of the United States. But now the doctors tell me that the Lone Star State is showing some of the symptoms that flattened residential sales nationwide.
Jim Gaines, Ph.D., an economist for the Real Estate Center at Texas A&M University, keeps his finger on the pulse of the state’s major housing markets. If one market misses a beat, he knows it.
First, the bad news. Because Texas housing markets were at a peak in 2007, it should come as no surprise that Gaines’ latest housing market checkup shows widespread weak home sales.
Statewide, existing home sales in May 2008 were down 15.4% from a year ago. Again, that was to be expected as the Texas building and sales bubbles had to subside eventually.
Lubbock and McAllen received the best reports. Home sales in the High Plains market declined only 0.5%, the least of any examined. McAllen’s fell 1.7%. By comparison, sales of existing homes were down 20.6% in Austin, 14% in Dallas, 33% in El Paso, 13.8% in Fort Worth, 15.7% in Houston, and 23% in San Antonio.
Texas home prices holding steadyThe good news for Texas homesellers is that prices are holding. That’s in stark contrast to what’s happening in other parts of the country. The national median home price fell by 1.8% in 2007, which was the first time a negative change had been recorded since the 1960s. By May 2008, U.S. home prices were already down another 6.8%.
In contrast, the statewide median price for an existing home in Texas is $151,300, up 1.4% from May 2007.
Lubbock had the state’s highest price increase during the year – up 11.1% – with a median of $113,100. Amarillo’s median of $122,200 was 7.4% higher than a year ago. Austin’s 6.1% increase pushed its median to $194,700. El Paso’s median was $137,800, up 5.8% in 12 months.
Home prices in some areas of Texas did fall in the last year. Beaumont’s median of $127,600 is 7% lower. McAllen is down 5.5% to $100,400.
Statewide inventory higher than normalOne of the vital signs Gaines keeps an eye on is months of inventory on the market. That is, how many months would it take to sell all the existing homes in an area at the current sales pace? About six months is considered normal. In general, the bigger the inventory, the sicker the patient.
Texas has an overall inventory of 6.9 months. Nationally, the existing home inventory is 10.4 months (and the new home inventory is 11 months).
El Paso and McAllen are two Texas cities with bulging inventories. McAllen has the biggest stock of unsold homes – 15.2 months. El Paso is close behind at 12.1 months.
Cities with notably small inventories include Amarillo (5.5 months), Austin (5.7 months), and Lubbock (5.5 months).
“Getting back to normal” is how many real estate people describe today’s Texas market. The doctors at the Real Estate Center agree with that diagnosis.
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