July 22, 2020 — Austin
The mandatory shelter-in-place orders related to COVID-19 caused the number of home sales across Texas to decline in the second quarter of 2020, while median price increased, according to the 2020-Q2 Texas Quarterly Housing Report released today by Texas Realtors.
“Even though Texans entered Q2 in the jaws of COVID-19, the housing market held its own,” said Cindi Bulla, chairman of Texas Realtors. “The second quarter of 2020 fared amazingly well by comparison to the same period of 2019, which was arguably one of our best years ever. Gov. Abbott’s early declaration of real estate as an essential service allowed Texas Realtors to transition to virtual platforms and carefully choreographed safety protocols for the few necessary in-person contacts, virtually eliminating disruption to the real estate sector.”
Home sales declined 9.9%, with 91,970 homes sold in the second quarter of 2020. Statewide, the median price increased 2.9% to $252,000. Of all the homes sold within the second quarter, 34.6% were priced from $200,000 to $299,999, the highest share of sales among all price-class distributions.
Jim Gaines, Ph.D., chief economist with the Real Estate Center at Texas A&M University, commented, “With COVID-19 and the mandatory shut down, the Texas housing market performed as expected in Q2. We have a tighter market compared to last year, causing prices to remain high. However, in June we saw demand pick up with buyers becoming more active and taking advantage of the low interest rates. The housing market is one of the few segments of the economy that has held strong. Barring another shutdown, we anticipate it to perform reasonably well in Q3.”
Active listings declined 22% in Q2 to 88,337 listings. Texas homes spent an average of 57 days on the market during the same time frame, five days more than the second quarter of 2019.
Housing inventory in Texas declined 0.9 months to 3.0 months of inventory. 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.
Chairman Bulla concluded, “It’s important to note that closed sales are off by only 10% compared to the second quarter of 2019. Pent up demand still resulted in rising prices, though at a slower pace. There is every reason for optimism as we move into Q3. However, our biggest problem remains the availability of affordable inventory.”