Slow growing inventory is choking sales growth and driving prices up in the Dallas real estate market, with only 2.4 months of inventory in the Dallas market — an increase of 0.2 months from last quarter — according to the latest quarterly report from the Texas Association of Realtors and the Real Estate Center at Texas A&M University.
As a result the median home price in Dallas is up 9.81 percent from the first quarter of 2014, an increase of 6.81 percent from the same time a year ago and the second consecutive quarter our city has seen an increase in home prices. Statewide, inventory grew for the first time in three years, up to 3.6 in the second quarter of 2014 from an all-time low of 3.4 months in the first quarter of this year. Still, inventory is tighter than a pair of skinny jeans after Thanksgiving and continues to pose problems for our market.
“The statewide housing inventory shortage to date in 2014 has prevented Texas from seeing the double-digit increases in home sales growth that we saw last year, so this new increase in inventory is promising,” said TAR chairman Dan Hatfield. “However, home sales volume continues to keep pace with 2013 – the second-best year ever for Texas real estate – showing that housing demand continues to be very strong throughout the state.”
Now that the first half of 2014 is over we can look back at a very strong 2014 summer, with statewide home sales up more than 46 percent from Q1 2014, and 1.13 percent YoY. In Dallas, Q2 though sales are up more than 48 percent from Q1 2014, but that’s a -2.56 percent change from the same time last year.
“The development of new homes and vacant lots is on the rise throughout Texas, and as a result we’re seeing much-needed gains in inventory. That said, Texas is still facing an inventory shortage,” said Real Estate Center economist Jim Gaines. “A steady, ongoing supply of new housing stock – particularly in the first-time and move-up buyer market, where a majority of home sales volume occurs – will be crucial to Texas housing market growth in the second half of 2014 and in the future.”
What’s your boots-on-the-ground perspective?