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By Omar Mohammed
Reporter, Economy & Finance
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Home prices in Texas are falling, a signal of challenges facing the housing market after the pandemic-era boom.
Some markets in the state have seen prices decline the most out of any metro areas in the country. Austin's market recorded a nearly 3 percent price drop for the week ending June 2 from the same time a year ago, followed by San Antonio's fall of 1.2 percent, along with Fort Worth, which registered the same decline, according to data from Redfin.
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At the national level, prices were up more than 4 percent, an all-time high during the four weeks ending June 2.
Austin was among parts of the country that experienced a significant influx of new residents, which helped push up competition for homes and contributed to a jump in prices. But the boom of the COVID years has slowed and the market is experiencing a downturn. The median price of a home in the area is down 2 percent in the first quarter to $436,000, according to Texas Realtors, from last year.
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While Texas as a state saw its median price jump 1.6 percent to about $331,000, sales were flat in the first quarter from a year ago.
The drop in prices in certain Texas cities could be good news for buyers and sellers alike.
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As prices decline, buyers who have had to wait to acquire homes after mortgage rates shot up to two-decade highs—above 7 percent—can now take the opportunity to own a home. For sellers, while a drop in prices may hurt their equity, it nevertheless could mean that they could finally attract buyers for their homes.
Texas Realtors noted that listed homes for sale have increased, giving opportunities for buyers.
"The number of homes listed went up nearly across the state. This will give many buyers more options than they had in the past several years," Jef Conn, chairman of Texas Realtors, said recently.
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But the market was struggling to provide enough homes for sale. The inventory was at 3.8 months' worth of supply, well below the six to 6.5 months that experts say is needed for a healthy housing market.
"Most areas of Texas still recorded inventory levels below that number, indicating that an adequate supply of housing continues to be a concern," according to Texas Realtors.
The housing sector may be turning into a buyer's market, suggested Conn.
"During the pandemic, buyers often were rushed, trying to compete with many other offers. Now, most buyers have a little more time to vet properties and make an offer," he said. "While interest rates have remained stubborn, there are good opportunities for buyers."
But it is not all bad for sellers, he added. "For sellers, prices have held up compared to a year ago, signaling good opportunities to sell," Conn said.
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