The unprecedented housing market activity recorded in Texas during the first half of 2022 was followed by calmer activity that reflects pre-pandemic levels and a 7% decline year to date as of October. While sales are expected to slow through the remainder of the year as is typical during the last quarter, home prices in 2022 may prove to be some of the highest ever recorded. The median home price in Texas is during the third quarter of this year was $345,000 — 11.3% higher compared to the same time a year ago, when the median price of a home in Texas was $310,000. As industry professionals prepare for changing market conditions, economists at the National Association of REALTORS® predict that home prices across the nation will hover near current levels due to limited availability of housing inventory. Though the months of inventory in our state has doubled and active listings have increased more than 30% compared to last year, the number of homes available for sale continue to be well below the six months of supply that is associated with moderate price appreciation.
“Inventory levels are still tight, which is why some homes for sale are still receiving multiple offers, “ said National Association of REALTORS® Chief Economist Lawrence Yun. “In October, 24% of homes received offers over the asking price. Conversely, homes sitting on the market for more than 120 days saw prices reduced by an average of 15.8%.”
In 2023, Yun expects national home sales to decline by 7% and median price to increase by 1%. The number of homes being sold in Texas today more closely reflects levels seen prior to the pandemic, which may offer relief for those seeking a wider variety of available properties. Higher interest rates present a challenge for buyers, as those in the position to purchase real estate have more homes to choose from and are less likely to find themselves in bidding wars. Sellers may also have to wait a little longer to get an offer, but home prices in many markets remain near the all-time highs recorded earlier this year.
Interest rates continue to play a major role in real estate, as some potential buyers may find challenges in qualifying for mortgages. According to the latest Texas Housing Affordability Outlook published by the Texas Real Estate Research Center at Texas A&M University, affordability continued to decline amid higher interest rates and elevated home prices.
Looking to the coming year, Texas REALTORS® is preparing to once again advocate for property owners during the 88th Texas Legislative Session. The association will focus on addressing issues that create a healthy environment for property owners and consumers. In September, Texas REALTORS® Public Policy Oversight Committee Liaison Christy Gessler and I testified before legislative committees reviewing the effects of legislation from previous sessions. Speaking before the Texas House Ways & Means Committee and the Senate Local Government Committee regarding a 2019 law that increased the transparency of property taxes, we voiced the REALTORS®’ position that further relief, reform, and education are necessary. Gessler also appeared before the House Committee on Business and Industry to talk about HOA reform laws that went into effect in September 2021. Nationally, NAR continues to stress that government must invest in boosting our nation’s housing supply if we are to make housing affordable. In Texas, this means removing regulatory barriers to construction, making zoning reforms and providing incentives to spur housing development.
No matter what lies ahead, Texas REALTORS® will be working for you. Whether advocating on behalf of property owners or bringing you market insights, your professional REALTOR® associations exist to help you and your clients succeed. Your expertise in representing those seeking to buy, sell or lease property is more important than ever. While statewide and national trends are interesting, buyers and sellers need to know what’s happening in their local areas, making it critical to work with a REALTOR®.