For the sixth consecutive year, the Texas housing market broke records in terms of the number of homes sold and median price, while inventory levels hit a critical all-time low, according to the 2020 Texas Real Estate Year in Review report released Feb. 25 by Texas Realtors.
“Texas real estate sales broke records despite being in the middle of a pandemic,” said Marvin Jolly, 2021 chairman of Texas Realtors. “Housing inventory dropped to historically low levels in many areas of the state, and that shortage of homes for sale made many markets extremely favorable to sellers and challenging for buyers.”
Home sales across the state increased 9.5% in 2020, with 393,615 homes sold. This is a larger increase than the 3.8% increase in 2019.
Housing inventory dropped to 1.7 months of inventory, a decrease of 1.3 months from 2019. According to the Texas Real Estate Research Center, a market balanced between supply and demand has between 6.0 and 6.5 months of inventory.
Median home price increased 8% from the prior year to $259,230. Price class distribution showed that the largest percentage of homes sold across the state (34.5%) fell in the $200,000-$299,000 price range.
“The 2021 housing market will be characterized by strong demand with low inventories accompanied by strong price growth,”explained Luis Torres, Ph.D., research economist with the Texas Real Estate Research Center at Texas A&M University. “Inventories of homes priced under $300,000 will be especially low, affecting sales in that price range. The economic recovery helped by the additional federal fiscal stimulus and vaccination rates will contribute to Texas housing demand in 2021.”
Active listings statewide declined 22.1% from 2019 to 2020. Homes spent an average of 55 days on the market, four days less than 2019.
Chairman Jolly concluded, “Rising home prices coupled with the housing shortage has made affordability a challenge across our state. These issues remain top of mind for Texas Realtors as we continue through the 87th legislative session. We will continue to champion legislation that will ensure homeownership remains attainable and a sound investment for years to come.”
Nationwide, the housing market has remained remarkably resilient in the face of the economic fallout of the coronavirus pandemic. Economists’ biggest worries are availability and affordability. Inventory of available houses slipped to a four-month supply. Last January, there was a five-month supply.