Luxury home sales in Texas, defined as homes priced at $1 million or higher in the Austin, Dallas-Fort Worth, Houston, San Antonio, Corpus Christi and Midland metropolitan statistical areas (MSAs), were strong in the first eight months of 2016, according to the latest Texas Luxury Home Sales Report released Monday by the Texas Association of Realtors.
From January – August 2016, luxury home sales volume increased in all of Texas's four major metro areas except Houston, which experienced a 7.9% year-over-year decline in luxury home sales. The highest annual gains in luxury home sales were in Corpus Christi and Midland, Texas, where luxury home sales jumped 60% and 166.7%, respectively.
During the same time frame, luxury home prices remained flat or declined across the state. The lone exception was Midland, where the median price for luxury homes increased 13.8% year-over-year. Luxury home prices were highest in Dallas-Fort Worth, with a median price of $1,400,000.
"The diversity and resiliency of Texas real estate is evident in the luxury housing market," said Leslie Rouda Smith, chairman of the Texas Association of Realtors. "The details of a million-dollar home vary—it could be a lakeside property in Austin, a luxury condominium in Dallas, a vacation property along the coast or a large home with acreage in west Texas."
Dr. Jim Gaines, chief economist at the Real Estate Center at Texas A&M University, said, "Several factors are driving Texas' luxury home sales growth in 2016. Consistent with the downturn of the oil and gas sector, home owners are putting more expensive homes on the market. Other luxury home sales are from new-home construction contracted two years ago, when the energy sector was healthier."
All six MSAs featured in the report experienced double-digit gains in luxury homes on the market from January – August 2016. In Austin, Corpus Christi, Midland and San Antonio, luxury homes also spent less time on the market than a year ago.
Luxury homes in the Austin-Round Rock MSA had the highest price per square foot – $345 – among major metro areas in Texas. According to the report, the high price per square foot for luxury homes is driven both by higher-end building materials as well as rising development costs.
"Rising home prices and development costs are pushing higher-end homes into the $1 million-dollar-plus price class. New construction in the luxury housing market can easily reach $500 or $600 per square foot, particularly among high-rise condominiums in urban centers," added Smith.
The Texas Luxury Home Sales Report is based on data from The Real Estate Center at Texas A&M University and analyzes sales data of homes priced at $1 million and higher from January through August 2016 for six MSAs in Texas.