Houston, Dallas-Fort Worth, Austin, San Antonio: Even as sales plunge, vacant homes pile on the market that were held off the market during Covid.
By Wolf Richter for WOLF STREET.
The inventory of vacant homes is coming out of the woodwork in Texas, even as sales have plunged and buyers have lost interest.
New listings in the state jumped by 22% in March from February, to 45,004 homes, the biggest number of new listings for any March in the data by realtor.com going back to 2016. Compared to 2019, new listings rose by 14%, and compared to 2018 by 17%. But back then, buyers weren’t on strike and sales hadn’t plunged.
As we can see in the chart, in March, new listings peeled away from the crowded field. The fat red line with big red boxes in all charts below denotes 2025; the dotted red line denotes 2024. This is quite the moment, even as sales are so low:
Active listings in Texas jumped by 26% year-over-year in March, and by 65% from two years ago, to 113,165 homes, the highest for any March in the data from realtor.com going back to 2016. Compared to 2018, active listings were up by 34%, compared to 2019 by 21%. But back then, sales hadn’t gotten crushed.
Active listings already peeled away from the field in mid-2024 and have kept widening the gap.
Shadow inventory is coming on the market: In 2021, active listings had collapsed, but demand was huge and people were buying homes hand-over fist, paying whatever, and seeing how prices exploded, they didn’t put their old home on the market but kept it vacant to ride the price spike up all the way. These vacant homes held off the market for speculative purposes were the reason inventories collapsed back then, as sales soared, and they formed part of the shadow inventory.
Now those vacant homes are coming on the market, but without their owners having to buy a new home because they’d already bought a home years ago, which now causes inventory to balloon and sales to plunge – the reverse of the effect it caused in 2021, when inventories collapsed while sales soared.
A similar situation of the shadow inventory of vacant homes piling on the market, even as sales plunged, is now also playing out in Florida.
In the Dallas-Fort Worth metro (Dallas-Fort Worth-Arlington), active listings jumped by 38% year-over-year and by 91% from two years ago, to 23,675 homes, the highest for any March in the data by realtor.com going back to 2016.
Compared to 2018, active listings are up by 55% and compared to 2019 by 17%.
In the Austin metro (Austin-Round Rock-San Marcos), active listings jumped by 17% in March from February, a huge jump for this time of the year, to 9,229 homes, the highest for any March in the data going back to 2016.
Year-over-year, active listings jumped by 22% from the already high levels a year ago. Compared to two years ago, listings jumped by 41%; compared to 2018, by 46%; and to 2019 by 38%.
This is the same saga of the shadow inventory: Vacant homes that people had moved out of during the pandemic but held off the market to ride up the price spike all the way.
Back then by buying a home in massive numbers without putting their old home on the market, inventory ran down to close to zero in Austin, and prices spiked in a ridiculous manner, by 70% from March 2020 through May 2022.
Now prices have begun to reverse that spike and are down by 23% from the peak through February in the Austin metro, as we noted in our lineup of The 33 Most Splendid Housing Bubbles of America.
Housing charts should never ever look like this. It documents pure housing insanity triggered by the government’s free-money recklessness and the Fed’s even more reckless interest rate repression at the time.
Now the government’s free money is gone, what’s left is the huge debt that this free money left behind, and that no one knows what to do with. The Fed U-turned in 2022, and mortgage rates moved back to 7% today, as per the daily measure by Mortgage News Daily. And the return to anything close to normalcy in terms of prices and sales volume is going to be a long bumpy road, and Austin is an early example of what this might look like.
In the Houston metro (Houston-Pasadena-The Woodlands), new listings also pulled away from the crowd in March when they jumped by 16% in March from February, and by 12% year-over-year, to 11,256 homes, the highest for any March in the data going back to 2016.
Active listings in the Houston metro jumped by 31% year-over-year and by 61% from two years ago, to 28,302 homes, the highest for any March in the data going back to 2016.
But buyers are on strike: In the South, pending sales of existing homes rose month-to-month in February, seasonally adjusted, but were down by 3.4% from the collapsed levels in February 2024, and marked the worst February in the data from the National Association of Realtors. Compared to 2019, pending sales plunged by 29%.
It is this reality of surging inventories – fueled by the shadow inventory now starting to come out of the shadows while sales have plunged amid too-high prices – that has turned the housing market into a further encouragement for buyers to remain on strike and let this play out.
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