Slowly Restoring Balance in Florida and Texas Markets
During the housing boom caused by the pandemic, Florida and Texas experienced an influx of new residents, leading to significant price growth in a short span. However, recent data on home sales and inventory suggests that these hot markets may finally be stabilizing, or potentially softening.
According to Florida Realtors®, the largest Realtor® association in the U.S., existing home sales for detached single-family homes and condos in Florida saw a decline in June compared to the previous year. Year-over-year, sales for detached single-family homes were down by 7.9%, while condo sales fell by 11%. Moreover, comparing second-quarter figures to the same period last year, sales for existing single-family homes dropped by 11.2%, and condo sales fell by 17.7%.
Despite the decline in sales, median sale prices for detached single-family homes and condos remained unchanged in June when compared to the previous year. On a quarterly basis, prices experienced a minimal increase of 0.2% and 1.9%, respectively, in the second quarter of 2023 compared to the same period in 2022.
In addition to the stable prices, there has been a notable increase in inventory, which may provide some relief for buyers. Florida Realtors® reported that single-family home inventory rose by nearly 14% year-over-year in June, resulting in a current supply of 2.8 months for existing single-family homes and 3.6 months for condos and townhouses.
These inventory gains indicate a return to some balance in the once red-hot Florida market, according to Florida Realtors® Chief Economist Dr. Brad O’Connor. He stated that the current inventory level is approximately halfway between the pre-pandemic level in 2019 and the low point during the pandemic in 2021. O’Connor further noted that the improvement in inventory levels suggests that the upward pricing pressures are starting to moderate.
Overall, the housing markets in Florida and Texas seem to be showing signs of stabilization and even potential softening. The decline in sales, stable median prices, and increased inventory offer hope for buyers looking for a more balanced market.
The housing market in Texas is currently experiencing a temporary cooldown, presenting a different perspective. According to Texas Realtors®, the median home price in the state has decreased by 3.1% year-over-year, dropping from $357,388 in Q2 2022 to $345,000 in the second quarter of 2023. Interestingly, more than half of the Texas markets have actually observed an increase in median prices, as stated by Marcus Phipps, the 2023 Chairman of the Texas Realtors®. Nonetheless, all metro areas have witnessed a rise in the average number of days homes spend on the market, along with an increase in available listings.
During the pandemic, both Austin and Dallas had been booming housing markets. However, Austin, which is the most expensive metro in the state, has been heavily impacted by the housing correction in the past year. The Texas Realtors® quarterly report reveals a 13.8% decline in median home prices in Austin compared to the same quarter last year, making it the metro with the largest price drop. Dallas, on the other hand, has seen a 4.7% decrease in median home prices within the same timeframe.
Similar to Florida, Texas has also experienced an increase in inventory. The inventory has grown from a two-month supply in Q2 2022 to 3.2 months in Q2 2023. However, it is important to note that the market is not yet in a balanced state. According to the Texas Real Estate Research Center, a healthier market typically reflects six to 6.5 months of inventory.
This report sheds light on the varying conditions within the Texas housing market, illustrating the dynamic nature of the industry.