People are definitely buying homes right now — the numbers don’t lie. But finding the right home is a struggle. That’s definitely related to inventory, which is incredibly low.
Overall, Texas homebuyers cited difficulty in finding the right property in the 2020 Texas Homebuyers and Sellers Report just released by Texas Realtors.
“This report provides critical insight for Texas Realtors in assessing the ever-changing needs and expectations of the consumers we serve,” said Cindi Bulla, 2020 chairman of Texas Realtors. “For example, despite access to a myriad of technology resources to search for homes, buyers continue to place a high value on local Realtor market knowledge when it comes to selecting the right home, negotiating the right price and guidance through the buying process.”
According to the report, 67 percent of Texas homebuyers were married couples, with 17 percent being single females and 10 percent being single males. Unmarried couples were just 5 percent of the homebuying market. The median age of Texas homebuyers was 52, five years more than last year.
Numbers from Texas Realtors show that 78 percent of all Texas buyers identified as white/Caucasian, 14 percent Hispanic/Latino, 5 percent Black, and 4 percent Asian/Pacific Islander.
“While Texas was slightly better than the national average of homebuyer diversity, we still have work to do,” Bulla said. “Across the state, we are still seeing white buyers make up the largest share of homebuyers, while those identifying as Hispanic or Black make up 14 percent and 5 percent, respectively. We as Texas Realtors must be laser-focused on strategies to ensure that homeownership is attainable and affordable for our entire population.”
For Texans who sold their homes, the most popular reason for putting a home on the market was to move closer to friends or family, followed by job relocations and proximity to their work. Sellers spent a median of 12 years in their homes. The median sales price was $64,050 more than what sellers paid for their homes, and the median length the home spent on the market was four weeks.
Find more stats here.
July Home Sales in Texas Hit 35K Record
As we mentioned, the housing market in the Lone Star State is sizzling this summer, which is whiplash compared to April and May’s full stop. The lockdowns and shutdowns thanks to COVID-19 put the proverbial damper on things, but now the market is back.
“Pent-up demand from the spring fueled housing activity across the state,” said Dr. James Gaines, chief economist for the Real Estate Center at Texas A&M University. “After a strong June, existing homes sold through Texas Multiple Listing Services in July broke record highs with nearly 35,000 closed listings.
The economic hit was evident in the first and second quarters of 2020, but from July of last year, existing-home sales are up by 13.5 percent. NAR numbers show the country’s existing-home sales are up 24.7 percent month-over-month, too.
“The federal government’s initial bolstering of unemployment insurance and the foreclosure moratorium kept the economy afloat during one of the greatest shocks in our lifetime,” said Center Research Economist Dr. Luis Torres. “Moreover, the Federal Reserve’s monetary policy actions have pushed down interest and mortgage rates. The situation, however, is still developing from both a public health and economic perspective, and many challenges still lie ahead.”
The cause? Inventory. We’re at just 2.5 months of inventory right now (a balanced market has six), which is a month less than last year. There just aren’t enough affordable homes to sell. We’re at a record-high median price for an existing home in Texas: $260,000. That’s up 11 percent year-over-year. However, that’s mostly because people who have the money to spend on luxury properties are spending it right now.
“Most of this price appreciation is attributed to the relative strength in the upper price cohorts,” said Torres. “The Texas Repeat Sales Index accounts for this bias and revealed more moderate growth at 4 percent.”
Millennials Make Moves to The ‘Burbs, According to Study
OpenDoor recently completed a survey and came to the conclusion that people are moving and buying houses, so it’s probably best for them to buy and sell them using OpenDoor. The company just started buying homes again in their cash-offer program last month after a hiatus due to COVID-19, and now they’re actually expanding to cover 21 markets in America.
According to the report, 28 percent of people who participated made the decision to leave their city as a result of COVID-19, and an additional 25 percent accelerated their plans to move for the same reason. Of respondents, 17 percent planned to move in the coming year.
But just because people are selling, buying, and moving, doesn’t mean that safety has gone out the window during the homebuying process, which was a concern for respondents. Forty-three percent of respondents felt comfortable touring unoccupied homes, while 21 percent favored virtual options.
Of course, it’s a seller’s market, and some can’t resist the thought of cashing in or moving up in the market. It has been remarkably resilient, with more than 60 percent of buyers and sellers saying the market has already returned to normal. Prices are headed upward, too, buyers and sellers affirmed.
It’s encouraging to see that the housing market has been more resilient than some real estate industry observers expected. A large majority of both buyers (62%) and sellers (63%) either believe that things have already returned to normal in their housing market or will within the next six months.
In addition, sellers remain strongly optimistic about changing home prices, with 42% of respondents expecting price increases. And buyers are even more bullish, with 50% anticipating prices to rise.
Now, the meat of it: Yes, Millennials are moving away from cities, but they’re not taking off for the hills or anything. Close, but not too close is the aim for 21 percent of the market, and only a small number — just 5.5 percent — are moving to far-off, tiny towns.