May was packed with indicators of an improving housing market here in Texas.
According to the latest Multiple Listing Service (MLS) data, existing home sales were up 20 percent over May 2011, prices were up 8 percent, and inventory was at a comfortable six months.
“There’s no doubt that the market in Texas and in most of our major metropolitan areas in Texas is definitely picking up,” said Real Estate Center Research Economist Dr. Jim Gaines on this week’s Real Estate Red Zone podcast. “Sales have picked up. The year-to-date is up 13 percent, which is very, very good.”
Gaines said the increased sales activity may reflect a release of some pent-up demand in the market as people become aware that now is an opportune time to buy, while prices are down and mortgage interest rates are at historical lows.
“The increased activity level may also indicate a positive shift in homebuyer attitudes with more confidence in the future of the housing market,” Gaines said.
Home sales for May were just shy of 23,500 units, compared with 19,623 the previous month and 19,602 a year ago.
While the May numbers suggest a much stronger 2012 summer sales season than the last few years, Gaines said the market is still hampered by tight mortgage credit availability and a relative limited inventory of homes offered for sale.
The median home price was $162,400, “the highest median home price across the state we’ve ever recorded here at the Center, and we’ve been doing this now for about thirty-something years,” Gaines said.
Texas had an overall inventory of six months. Some markets were below five months. Others, such as Collin County and Garland, were below four. While that generally suggests a seller’s market, Gaines said that isn’t the case here.
“With the low inventory of properties for sale, normally you would expect prices to pick up more aggressively,” Gaines said. “That hasn’t happened, because it’s not being offset by that much increase in demand. The demand isn’t up that much yet to really create the surge in home prices of4or 5 percentor more appreciation rate.”
New home permits were up 20.5 percent year-to-date, another bright spot in the state’s housing market.
“[Texas is] one of the few markets in the country where new home construction is beginning to really pick up and show signs of life again,” Gaines said. “Now, having said that, it is up 20.5 percent from the historical low. But you have to take that first step in recovery, and it looks like we are definitely taking that first step.”
Source: Real Estate Center