By Wolf Richter for WOLF STREET.
The housing market in Texas just hit another multi-year record of sorts: Active listings reached a new high in October in the data of Realtor.com going back to 2016. New listings are showing up at about the normal rate for this time of the year, but sales are lethargic despite dropping asking prices – prices clearly haven’t dropped enough – and so the inventory keeps piling up and going stale.
Active listings rose to 115,739 homes, up by 28% year-over-year, up by 42% from two years ago, and up by about 13% from 2018 and 2019 (data via Realtor.com).
Median Days on the Market drag out.
The median number of days a property sat on the market for sale before it either sold or was pulled off the market in seller-frustration rose to 61 days in October, the most for any October since 2019.
This metric is a result of:
- How aggressively sellers pulled listings off the market without sale;
- And how fast properties sold that did sell.
When sellers get more motivated, they leave the property on the market longer, rather than pulling it off after a few weeks if nothing happens. And they might try reducing the price until it sells. This causes the median number of days on the market to lengthen.
Inventories are piling up because prices are too high. But they’re coming down.
Just about anything can be sold if the price is low enough. But many sellers still want their aspirational prices, and so they pull their vacant home off the market, hoping that this too shall pass, and pay the substantial carrying costs of a vacant home, especially if leveraged, rather than list the home at a price that is low enough to sell.
Listing prices are prices that sellers imagine. They’re not transaction prices. Transaction prices are set by buyers. In the major metros in Texas, transaction prices have fallen to varying degrees. More in a moment.
The median listing price in Texas dropped to $370,700 in October, down by about 2% from a year ago and down by about 3% from two years ago. Compared to the seasonal peak in June 2022, the median listing price is down by 7.9% (data via Realtor.com):
Price reductions trim too-high listing price.
In October, there were 37,984 listings with price reductions in Texas, the third highest for any October in the data by Realtor.com going back to 2016. Only the Octobers in 2022 and 2018 were higher. Obviously, as we can see from the inventory pile-up, these price reductions are not doing the job.
Listing prices need to be attractive in the first place, and when they don’t catch, price reductions need to be bold and stand out in this field of competition, because there is a lot of competition now (data via Realtor.com).
Transaction prices (closed sales) for the major markets in Texas have declined, in some markets more than in others. The October prices will be released in a week. Here are the transaction prices through September, according to data from the “raw” Zillow Home Value Index (ZHVI), which we feature in our Most Splendid Housing Bubbles in America series.
Austin metro: -4.0 year-over-year, -20% from the June 2022 peak, and back to where it had been in May 2021.
Dallas-Fort Worth metro: -0.3% year-over-year, -4.4% from the peak in June 2022:
Houston metro: +0.4% year-over-year, -1.9% from the July 2022 peak
San Antonio metro: -2.7% year-over-year; -6.8% from the July 2022 peak:
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