Signs That Texas’ Red-Hot Housing Market May Have Peaked

The Texas housing market shows signs of having “stabilized” after reaching record highs, according to new data and analysis from the Real Estate Center at Texas A&M University.

The latest data from November shows that single-family construction permits fell for the first time in five months, though construction activity is still very high, with Texas leading the nation in the number of construction permits issued.

Median home prices fell in Austin by $14,600 from an all-time high in October to $314,400. San Antonio’s metric shed $6,300, falling to $229,500.

The median price in North Texas was $293,600 and $251,800 in Dallas and Fort Worth, respectively. Houston’s price decreased for the second straight month to $245,100.

In a monthly report, Texas A&M researchers note that inventory for homes priced less than $300,000 expanded, a trend that they attribute to concentrated efforts by builders.

Overall, however, the market is still hot and the average months of inventory is 3.6, which is much less than a benchmark level of six months that’s considered a “balanced” housing market. In some areas inventory decreased rather than increased, including Austin and Dallas, indicating housing shortages in those areas.

Luxury homes (those priced more than $500,000) are less in demand, with an inventory of 8.3 months.

Total housing sales, a different metric from housing permits, also flattened in November, though demand remains strong amid low interest rates and ongoing strength in the job market. The report explains, “Activity for homes priced above $200,000 slowed after reaching record-breaking levels the previous month but increased more than 10% compared with 2018…”

For more details, read Texas Housing Insight, a publication of the Real Estate Center at Texas A&M University.