Texas home sales volume and home prices reached all-time highs for the second year in a row in 2016, according to the 2016 Texas Real Estate Year in Review Report released today by the Texas Association of REALTORS.
“Strong gains in end-of-year home sales activity were a key factor in making 2016 another record year for Texas real estate,” said Vicki Fullerton, chairman of the Texas Association of REALTORS. “Last year’s record home sales activity was fueled by the momentum of multiple years’ strong job and population growth across the state, despite the fact that Texas job and economic growth began to slow in 2016.”
Texas home prices rose steadily throughout last year, with the median price in 2016 increasing 7.7 percent from the year prior, to $210,000. Over the same timeframe, Texas also experienced continued growth in home sales volume, which increased 4.6 percent to 324,924 homes sold in 2016.
Jim Gaines, Ph.D., chief economist with the Real Estate Center at Texas A&M University, explained, “The 2017 Texas housing market is projected to keep pace with last year’s strong levels, but it may be difficult to match 2016 levels due to current housing supply levels. Household incomes are rising at a disproportionally low rate than home prices, creating housing affordability challenges across the state. In housing development, labor shortages and regulatory barriers are slowing construction and in turn, driving up new home prices.”
The state’s low housing inventory level remained consistent with the prior year, ending at 3.3 months of inventory in December 2016. According to the Real Estate Center at Texas A&M University, a market balanced between supply and demand has between 6.0 and 6.5 months of inventory.
Texas homes also continued to spend approximately the same length of time on the market in 2016, an average of 58 days, and active listings increased 6 percent from 2015 to 2016.
Chairman Fullerton concluded, “Rising home prices and skyrocketing property taxes are driving up the cost of homeownership at an alarming rate. Growth in property values makes homeownership a strong investment, but must be balanced by lower tax rates so that Texans are not being forced out of their homes. The Texas Association of REALTORSurges state legislators to pass legislation that ensures an honest and transparent conversation occurs at the local level if more tax revenue is needed and gives property owners the right to decide when their tax rates should be raised.”
About the Texas Real Estate Year in Review Report
Data for the Texas Real Estate Year in Review Report is provided by the Data Relevance Project, a partnership among local REALTOR associations and their MLSs, the Real Estate Center at Texas A&M University, and the Texas Association of REALTORS. The report provides annual real estate sales data from a statewide perspective and for 25 metropolitan statistical areas in Texas.
Click here for the full report.