Already astronomical North Texas home prices were sent into orbit in May.
Median single-family home prices in the area soared by an unprecedented 26% from May 2020 levels. The cost of a mid-priced home sold by local real estate agents was at a record high $341,000.
North Texas home prices rose by 5% – what in past cycles would be considered a generous annual increase – just between April and May, according to the latest data from the Texas Real Estate Research Center and the North Texas Real Estate Information Systems.
With May’s blockbuster price gain, median home prices in the area are up 17% for the first five months of 2021 compared with the same period last year.
Along with the spike in housing costs, the number of North Texas homes sold in May increased 27% from a year earlier. But that’s a comparison to the start of the COVID-19 pandemic when local sales plunged.
“It’s meaningless, because you are going to get really huge year-over-year increases from when everything shut down,” said longtime Texas housing economist James Gaines. “I think we are a year away before we can say we are back to anything looking like normal.
“There isn’t an economist in the world that can really tell you what is going on.”
What Gaines and other analysts can say for sure is a severe shortage of homes on the market is driving the housing price inflation.
At the end of May, only about 7,000 single-family homes in North Texas were listed with real estate agents – the lowest inventory in decades. There’s less than a one-month supply of houses on the market.
In May alone, area sales agents sold more than 10,000 houses. Another 11,709 sales are pending – properties under contract but not yet sold.
Many homes are going under contract for sale as soon as they hit the market. On average it took only 24 days to sell a house in North Texas in May.
The recent surge in home buying has steadily ramped up in the last few months. Sales of houses by real estate agents in the first five months of 2021 are 11% higher year-over-year.
“Mortgage rates have gone up a tick but not enough to be effect demand significantly,” Gaines said. “We are probably going to see another record year of sales.
“We do anticipate the market is at some point going to level out a little bit.”
But, the median cost of a preowned house in the area is almost 50% ahead of where it was five years ago – an unheard of rate of appreciation.
“Housing demand is still strong, evidenced by the increase in home sales,” Bill Jordan, president of the MetroTex Association of REALTORS® said in a statement. “Unfortunately, our limited inventory just can’t keep up with that demand.
“If we can get a healthier supply of homes this summer we should see the pricing increases cool down and create a healthy market correction.”
Source: Dallas Morning News