North Texas home sales rebound after pandemic slowdown

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After steep declines in April and May, North Texas home sales rebounded in June. Area real estate agents sold 16% more single-family homes than in June of 2019.

The increase comes after a 25% year-over-year drop in May and a 17% decline in April, according to data from the Real Estate Center at Texas A&M University and North Texas Real Estate Information Systems.

Last month's sales of 11,987 set a record for the month of June and were more than 40% higher than in May.

While the resurgence in home sales is good news for a local economy battered by COVID-19, it's unclear how much of June's home sales rise was caused by sales that were delayed by the pandemic.

During lockdown periods in late March and April, many home buyers and sellers put their plans on hold.

Now that the economy has begun to restart, real estate agents say they are seeing more buyer traffic.

"Despite the recent surge in positive COVID-19 cases, it appears that North Texans continue to be out and about and are shopping for homes," said Ted Wilson, principal with Dallas-based housing analyst Residential Strategies. "The uptick in June sales likely is reflective of some buyers that delayed purchase decisions from earlier this spring."

And near-record low mortgage rates are attractive to consumers.

"Clearly, as the 30-year mortgage rate approaches 3%, buyers are coming off the sidelines," Wilson said. "For those households that can qualify for a home purchase, many are taking advantage of the low cost of money to improve their living situation. Activity is especially strong among millennial first-time buyers and for houses priced under $300,000."

Pending home sales — properties under contract but not yet sold — were 28% higher at the end of last month vs. a year ago, indicating that there are more property purchases in the pipeline.

North Texas median home sales prices in June were up 3% from a year ago after a 1% year-over-year decline in May.

The number of houses on the market with real estate agents continues to fall because fewer sellers are putting their properties up for purchase.

At the end of June, there were 36% fewer homes up for grabs in the area than in 2019.

Only 17,222 single-family homes were listed for sale with real estate agents in the more than two dozen North Texas counties included in the survey.

For the first six months of the year, North Texas real estate agents have sold 51,229 single-family homes — 2% less than in the first half of 2019.

The biggest increases in sales so far this year have been for homes priced between $250,000 and $500,000. Sales of houses at $900,000 and up were down in the first six months of 2020.

Texas economist Mark Dotzour said that the pandemic hasn't killed the desire for home purchases, and June's sales bounce is a positive indicator.

"There is no corner to be turned — it's just a continuation of the potent demand that began around Labor Day," Dotzour said. "People want to own houses. The shortage of supply will only be exacerbated by tight lending appetite from banks. This will drive prices even higher. The bottom third of the market is still on fire."

Real estate agents say their business is picking up.

"At the Ebby Halliday Companies, our pending contracts are up 20% and listings are up 21%," said Chris Kelly, CEO of the residential sales firm.

Even with the latest positive new on the home front, economists are cautious.

The DFW area's employment has fallen by more than 200,000 jobs because of the pandemic. And with the infection rates soaring in Texas, there are worries about the potential for another economic shutdown.

A new forecast from CoreLogic warns that Dallas-area home prices could fall by as much as 6% over the next year.

Tribune Content Agency