Even though housing sales in Texas fell 3.2 percent, demand is still strong, the Texas A&M Real Estate Center’s June Housing Insight revealed. The same report revealed that Dallas’ affordable housing problems aren’t anywhere close to abating.
The report said that the Texas Residential Construction Cycle (Coincident) Index reached its highest level since 2008 last month, largely thanks to construction employment and wages. The index measures current construction activity in the state.
Housing shortages seem to have spurred an increase in supply activity, as the inventory of vacant developed lots rose 3.3 percent in Dallas-Fort Worth. However, single-family housing construction fell 1.8 percent in the second quarter. Texas is still at the top of the market with 16 percent of the national total for permits, though, and Dallas-Fort worth comes in at a strong second to Houston’s permit activity with 3,295.
Months of inventory in Texas came in at 3.7 months, quite behind the six months of inventory generally thought to be the sign of a balanced housing market.
Housing sales fell 3.2 percent in June, with a softening in the market mostly for the below $300,000 market.
“This same price cohort hindered the markets in Austin, Dallas, and Fort Worth, where housing affordability declined substantially over the past year,” the report said. “Through the first six months of 2018, total housing sales dropped 9.2 percent in Austin, 5.7 percent in Dallas, and 4.1 percent in Fort Worth. Most of the North Texas decline, however, occurred in the resale market.”
New-home sales in 2Q rose 7.3 percent in Dallas-Fort Worth. Average days on market fell under 42 days in Dallas, and 38 in Fort Worth. Homes priced $200,000 to $300,000 averaged 50 DOM statewide.
“The Texas median home price fell to a six-month low below $229,000,” the report said. “The median price per square foot (ppsf), however, rose for the 13th consecutive month to a record high $115.53.”
Dallas’ median price and price per square foot flattened at $281,348 and $131.45, respectively.
The Texas Housing Affordability Index fell below 1.50 in 2Q, indicating that a Texas family earning the median income in Texas could no longer afford homes priced 50 percent above the median sale price.
“The Dallas index settled at 1.39, the lowest of the major metros, followed by Austin at 1.40,” the report said. “Fort Worth had the largest decline in affordability, matching Houston at 1.63. In San Antonio, the affordability index sank six points to 1.50 in the second quarter.”