For the fourth consecutive year, the Texas housing market continued to break records in home sales and median price, according to the 2018 Texas Real Estate Year in Review report released today by Texas Realtors.
"The unprecedented real estate market activity in Texas in 2018 is a testament to the state's business-friendly atmosphere and strong economy," said Tray Bates, 2019 chairman of Texas Realtors. "It's worth noting, though, that the rate of sales and price increases has cooled off a bit compared to prior years."
Home sales across the state increased 1.7% in 2018, with 344,030 homes sold. This is a smaller increase than the 4.1%, 4.5% and 4% increases of 2017, 2016 and 2015, respectively.
Median home prices increased 4.4% from the year prior to $232,900. However, similar to the number of home sales, the increase in median home price was lower than the 6.2%, 7.7% and 7.1% increases of the past three years.
Jim Gaines, Ph.D., chief economist with the Real Estate Center at Texas A&M University, explained, "Despite another record-breaking year in the Texas housing market, home sales activity around the state slowed due to continued shortages in housing inventory and increased interest rates. We're anticipating this will affect new home construction in 2019 due to the cost of land, shortage of labor and increased turnaround time for permitting."
Housing inventory across the state increased 0.2 months to 3.3 months of inventory in 2018. According to the Real Estate Center, a market balanced between supply and demand has between 6.0 and 6.5 months of inventory.Homes spent the same length of time on the market in 2018 as in 2017: an average of 58 days. Active listings statewide increased 1.4% from 2017 to 2018.
Bates concluded, "The availability of entry-level homes priced under $200,000 has decreased 13.5% since 2015. Due to high demand for housing in most areas of Texas, our inventory levels are critically low, and housing affordability remains a challenge. Texas Realtors will continue to work with state leaders in this current legislative session to support measures that make homeownership attainable for more Texans. Realtors will also continue to protect Texans' property rights and support all facets of the real estate industry as a smart investment for Texans for years to come."