North Texas home sales make up for pandemic losses with August surge
The North Texas housing market continued to thumb its nose at the pandemic in August, with home sales up 11% from a year ago.
Local real estate agents sold more than 12,000 single-family homes through their multiple listing service — the largest sales number ever for the month of August.
Last month's sales total was down from the record 13,504 purchases recorded in the area in July. But the recent increases in local housing activity have made up for big declines early in the COVID-19 pandemic.
Homes sold in North Texas by real estate agents through the first eight months of 2020 are 4% ahead of last year's record number of transactions, according to the latest data from the Real Estate Center at Texas A&M University and North Texas Real Estate Information Systems.
"There is still strong demand because of the low interest rates," said James Gaines, chief economist at the Real Estate Center. "Every homebuilder I've talked to is building houses as fast as they can — they can't build them fast enough. And there aren't enough existing homes for sale."
Along with the surge in sales, median home prices in the area have spiked.
August's median home resales price of $292,000 was up 9% from a year earlier and close to an all-time high.
A severe shortage of homes on the market in the Dallas-Fort Worth area has caused home sales prices to jump.
Gaines said some of the price increase comes from consumers buying more expensive houses.
"The last few months, there has been a bigger move toward the higher-priced market," he said. "They have an opportunity with low interest rates to get a bigger house. That's caused the averages and median prices to come up."
At the end of August, only 14,642 single-family homes were listed for sale with local real estate agents — a 45% year-over-year decline.
The number of homes listed for in North Texas is at its lowest level in more than two decades. And there is only a 1.5-month supply of houses up for sale.
Record low home mortgage rates this year have caused a run on home purchases, even in the face of the COVID-19 outbreak, which plunged the U.S. into recession and cost the country millions of jobs.
Early indications are that the North Texas home-buying binge will continue in September.
Pending home sales in the area — properties under contract but not yet sold — are running 28% higher than in August 2019.
Gaines predicts that the double-digit percentage increases in home sales will moderate at some point.
"We are anticipating that these phenomenal monthly increases year over year are going to slow down," he said. "All this pent-up demand will eventually be used up."
Housing has emerged as the brightest spot in the economy — a turnabout from the Great Recession, when the housing sector took a beating.
"The economists are looking at the housing sector right now to be the only driver of the economy," Gaines said. "What else is there?"