AUSTIN – (Realty News Report) – Texas real estate activity reached historic levels in 2020, with Texas Realtors reporting 393,615 homes sold across the state — the highest annual total in Texas real estate history.
“Texas real estate sales broke records despite being in the middle of a pandemic,” said Marvin Jolly, 2021 chairman of Texas Realtors. “Housing inventory dropped to historically low levels in many areas of the state, and that shortage of homes for sale made many markets extremely favorable to sellers and challenging for buyers.”
Strong buyer demand paired with tight inventory pushed Texas home prices to record levels. The statewide median sales price in 2020 was $259,230, an 8 percent increase over the previous year.
Historically low mortgage rates—30-year fixed rates fell below 3 percent at times—helped energize sales. The statewide sales total in 2020 rose 9.5 percent compared with 2019, according to Texas Realtors.
Lower mortgage rates improved monthly affordability for many buyers, even as home prices rose. Renters in many major Texas markets saw rents decline in 2020 as landlords adjusted to increased competition from homebuying, according to the Texas Real Estate Year in Review report released by Texas Realtors.
Still, rising prices combined with limited supply heightened affordability concerns for many prospective buyers.
“Rising home prices coupled with the housing shortage has made affordability a challenge across our state. These issues remain top of mind for Texas Realtors as we continue through the 87th legislative session,” Jolly said. “We will continue to champion legislation that will ensure homeownership remains attainable and a sound investment for years to come.”
Inventory tightened dramatically, falling to 1.7 months of supply — down 1.3 months from 2019. The Texas Real Estate Research Center notes a balanced market typically has between 6.0 and 6.5 months of inventory, underscoring that Texas was a clear seller’s market in 2020.
Active listings statewide declined 22.1 percent year over year, and homes spent an average of 55 days on the market — four days fewer than in 2019.
Texas Homes Forecast: What’s Ahead in 2021?
“The 2021 housing market will be characterized by strong demand with low inventories accompanied by strong price growth,” explained Luis Torres, Ph.D., research economist with the Texas Real Estate Research Center at Texas A&M University. “Inventories of homes priced under $300,000 will be especially low, affecting sales in that price range. The economic recovery helped by additional federal fiscal stimulus and vaccination rates will contribute to Texas housing demand in 2021.”
Builder activity also rose in 2020, with 128,331 new homes sold during the year.
The median price per square foot for Texas homes (including new and existing residences) was $128.74 in 2020, up 6.2 percent from 2019.
The annual sales total of 393,615 residential transactions includes single-family homes, townhomes and condominiums, a Texas Realtors spokesman said.
In the Houston area, the Houston Association of Realtors reported 96,151 single-family home sales in 2020, a 10.5 percent increase from the 86,996 homes sold in 2019.
Feb. 26, 2021 Realty News Report Copyright 2021
File: Texas Home Sales Shatter All-Time Record
File: (2) Texas Realtors. Houston Association of Realtors. Texas Home Sales Shatter All-Time Record in 2020. Luis Torres. Marvin Jolly.