Texas Market Picks Up Pace in Q1

Texas' real estate market experienced a healthy first quarter, picking up right where 2012 left off, the ""Texas Association of Realtors"":https://www.texasrealtors.com/index.cfm revealed in its latest Quarterly Housing Report.

[IMAGE]

According to the association, Q1's gains were fueled by surging demand for homes, which were in turn driven by population and job growth throughout the quarter.

""2012 was a strong year for Texas real estate and, based on these first-quarter results, 2013 looks to be even stronger. We've heard a lot about the growth of Texas and now we're starting to really see the impact on our real estate market,"" said chairman Shad Bogany.

According to the report, 53,937 single-family homes were sold in the Lone Star State during the first quarter, a 17.5 percent increase over the same quarter last year. Of the 48 markets included in the report, 40 posted increases in sales, indicating a broad-based surge.

The median price for Texas homes also increased, growing 7.0 percent to $158,000. Median prices in Texas have risen on a year-over-year basis since the quarterly report began in 2009.

[COLUMN_BREAK]

""Historically, the median price for Texas homes has increased about four percent each year and we usually see the biggest jump in price between the first and second quarters,"" said Jim Gaines, Ph.D., economist with the Real Estate Center at Texas A&M University. ""So, with price increases already in the range of seven percent in the first quarter, we could see Texas homes increase in value significantly this year.""

In the same timeframe, the average price was $204,718, about 6.9 percent higher year-over-year.
The market averaged 4.2 months of inventory in the first quarter, a drop of 1.7 months from the prior year and significantly less than the 6.5 month figure cited by the Real Estate Center as a balanced market.

""There is clearly demand for Texas homes and rising prices are encouraging more homeowners to consider listing their properties. However, if a homeowner wants to move up, they must be able to find a property to move to, so more supply is needed to capture the grown potential in the market,"" Gaines said.

While inventory remains a concern, Gaines expressed confidence that Texas' housing recovery is based on a solid foundation.

""In the coming months, I expect we'll start to hear national news reports about increasing sales in other markets, possibly exceeding those in Texas. That's because other markets boomed in the mid-2000s and busted in the late 2000s, meaning they need dramatic increases in sales volume and price to recover,"" he explained. ""I call that an 'echo boom' and it's more indicative of market fluctuations than fundamentals.

""That never happened in Texas, so the increases you're seeing in our state are indicative of true increases in demand, driven by population growth. Assuming we continue to add jobs as we have recently, that will make our increases more sustainable.""