Texas Existing Home Sales Hit Record High, Then COVID-19 Arrived
COLLEGE STATION, Tex. (Real Estate Center) – After
accounting for seasonal factors, existing homes sold through Texas Multiple
Listing Services reached a record high last month. That milestone was quickly
forgotten, however, with the arrival of the COVID-19 virus.
“A great beginning to the real estate selling season was suddenly awash in
disruption,” said Dr. James Gaines, chief economist for the Real Estate Center
at Texas A&M University.
“Texas existing-home sales increased 2.6 percent year over year in February,
extending eight months of positive growth,” he said. “Low mortgage rates and a
healthy labor market drove resale activity.”
According to the National Association of Realtors (NAR), February marked the
highest month of home sales nationally since February 2007, rising 6.5 percent
from January and 7.2 percent from a year ago. All of the gain was from sales of
single-family units, which rose 7.3 percent from a year ago to 5.17 million
sales.
Center Research Economist Dr. Luis Torres said February is likely "the
last hurrah" for the housing market for a while.
"The sudden stop of economic activity and financial market volatility is
disrupting the selling and purchasing of homes," Torres said. "There
are anecdotal reports from NAR that the traffic of sellers and purchasers is
slowing down considerably."
“On the supply side, more than 32,000 existing homes hit the Texas market in
February, but strong sales held the months of inventory below three months,”
said Gaines. “The shortage of homes priced less than $300,000 continued to
exacerbate affordability constraints. The median price for an existing home
sold in Texas was $230,000 compared with the national median of $270,100.
“The economic and public health response to the novel coronavirus will
drastically affect housing market activity in coming months,” said Gaines.
“Social distancing and self-isolation will reduce the number of homes viewed
and shown by real estate agents, keeping both buyers and sellers on the
sidelines for some time.
“We expect March data to be partially affected by COVID-19, but April numbers
will provide a more complete description of the degree of disruption.”
Read more about the Real Estate
Center’s research staff thoughts on the economic impact of COVID-19.
Funded primarily by Texas real estate licensee fees, the Real Estate
Center was created by the state legislature to meet the needs of many
audiences, including the real estate industry, instructors, researchers, and
the public. The Center is part of Mays Business School at Texas A&M
University.
