Empty shelves at the supermarket are not the only shortage created by the pandemic. Homes are in short supply, too.
“Unless a buyer is looking for a luxury home, there are fewer to choose from,” says Dr. Jim Gaines, chief economist for the Real Estate Center at Texas A&M University. “Texas’ months of inventory fell to a historic 3.2 months in May as the state’s supply of active listings plummeted to its lowest level in three-and-a-half years.”
Researchers consider a six-month inventory a balanced market. Sales of homes priced less than $300,000 continue brisk, said Gaines. The Texas inventory of homes in that price range slid to an all-time low of 2.4 months, according to the Center’s latest Texas Housing Insight report.
While closings for luxury homes (those priced more than $500,000) fell, the supply of unsold homes in the higher price range increased for the first time this year. The supply of luxury homes stands at 7.6 months.
“This disparity exemplifies the shortage of affordable housing during a time when the rocky economic atmosphere may make lower-priced homes look more financially feasible to the potential homebuyer,” said Gaines.
Active listings fell the most in Central Texas. After increasing for two months, Austin’s inventory fell to 1.9 months. San Antonio’s inventory reached a historic low of three months. In Dallas and Fort Worth, inventories decreased to 2.6 and 2.4 months, respectively. At 3.4 months, Houston’s inventory of unsold homes was slightly above the state average.
Reduced showing and visiting of homes during March and April translated to slightly softer housing demand, notes the Center’s monthly report. On average, a Texas home is on the market 61 days, longer than it has been in a year.
Homes in Houston and San Antonio sell in an average 62 and 63 days, respectively. In Austin, homes are on the market an average of 55 days, six days longer than the previous month. In North Texas, the average days on market are 57 in Dallas and 50 in Fort Worth.
For more information, read the latest Texas Housing Insight.