Should Apartment Owners be Worried About Rising Home Sales in Texas?
- Aug 10, 2012
Austin—In a report that might have long-term implications for the multifamily industry in Texas, which has been having a very good run lately, single-family home sale momentum seems to be returning to the state. At least, that’s the conclusion of the latest Texas Quarterly Housing Report issued today by the Texas Association of Realtors. Compared with the same quarter last year, second quarter 2012 single-family home sales were up significantly.
During 2Q12, 67,334 single-family homes were sold in Texas, an increase of 13.04 percent over the second quarter of 2011 according to the report. In addition, the median price in the second quarter of 2012 was $161,400, which is 7.45 percent higher than during 2Q11.
The growth in sales and prices wasn’t limited to a handful of markets, according to the Realtors, but was broad-based. Statewide results can be dominated by large-market trends (Houston, DFW, San Antonio, Austin) because of high volume, but this time around increases in both sales volume and median price were seen throughout most of the 48 Texas markets included in the report.
In addition to improvements in sales volume and median price in the second quarter of 2012, the inventory figure improved, according to the report. The Texas market featured 5.9 months of inventory in second quarter, which is 2.2 months less than during 2Q11. The Real Estate Center cites 6.5 months of inventory as a market in which demand is balanced with supply, so demand seems to be getting the upper hand.
Though the report doesn’t address it, in the short run these numbers won’t mean much for the booming apartment markets in the largest cities in the state (again, (Houston, DFW, San Antonio, Austin). In each of those markets, demand for apartments has consistently outstripped supply in recent quarters, and job growth probably means that trend will continue for some time to come. It’s possible, however, that if Texas sees a sustained recovery in single-family sales, that will eat somewhat into the future demand growth for apartments, even as more apartments are being developed.