October home sales in the area were a quarter higher than a year ago.
North Texas homebuying saw another surge in October, with sales up 25% from a year ago.
Last month’s jump in home purchases in the area fueled a 12% year-over-year spike in prices — the largest such gain in more than three years. The median sales price for preowned single-family homes in North Texas is now just under $300,000.
The price of homes sold by North Texas real estate agents has risen almost 50% in the past five years, according to data from the Real Estate Center at Texas A&M University and North Texas Real Estate Information Systems.
Local real estate agents sold 11,186 single-family homes in October — the largest sales total ever for the month.
Through the first nine months of 2020, an all-time-high 99,078 houses changed hands through the real estate agents’ multiple listing service, 8% more than in the same period last year.
Record low mortgage rates and a pandemic that is keeping people at home are credited with driving the white-hot demand for housing in North Texas.
But with inventories of houses for sale at the lowest point in decades, prices are being pushed higher and higher.
Also, buyers are opting for larger, pricier properties thanks to low financing costs that put them within reach.
“Part of that increase in the median and average price is because the market share of homes being sold priced over $500,000 has increased,” said James Gaines, chief economist with the Real Estate Center. “That bumps prices up more than what the real value change is.
“With the low interest rates, people can afford to buy more house.”
The supply of houses for sale in the more than 20 counties included in the North Texas survey area has fallen 50% from a year ago to just 12,600 homes. That’s only about a 1.3-month supply at the current sales pace.
“It’s astounding — you have a just-in-time inventory like in manufacturing,” Gaines said. “A house gets listed for sale and it may already have a contract on it.”
This year’s sharp decline in homes on the market has been blamed on sellers who aren’t willing to show their properties during the pandemic. With a vaccine on the horizon, there are predictions that more owners will opt to sell in 2021.
“There is some reason to suspect there are people who right now are not selling their house that might want to that are waiting for all this pandemic stuff to be over,” Gaines said. “I don’t think that’s going to happen the next day after a vaccine.
“It might happen over a period of time.”
October was the fifth month in a row of double-digit year-over-year percentage increases in North Texas home purchases.
After sharp declines in homebuying during the early months of the COVID-19 pandemic, buyers rushed back into the market starting in June.
Gaines said he discounts forecasts that call for a significant slowdown in housing activity starting next year. “We’ve never been through a pandemic before, so all the models don’t work,” he said.
At the end of October, pending home sales for North Texas were 20% higher than a year ago, with more than 11,000 properties under contract for sale and not yet closed.
The annual increase in pending purchases indicates that November will see another sales surge, coming during a month that typically has a smaller number of transactions.
The shortage of available preowned homes in the Dallas-Fort Worth area has shifted some buyers to the new-house market.
“With the lack of existing home inventory, homebuilders report that they are benefiting from the situation,” said Ted Wilson, principal with Dallas-based housing analyst Residential Strategies. “Many would-be homebuyers are now looking at their new-home options.
“The shortage of existing homes priced under $300,000 has become especially acute in the D-FW area.”
Housing analysts worry that this year’s increases in median home prices in Dallas-Fort Worth will eventually put downward pressure on purchases.
“We are pricing out of the market,” said Paige Shipp, vice president of research for CDCG Asset Management. “With every increase, fewer and fewer people can afford homes — no matter now low mortgage rates are.”