Homeowners throughout the US have been slashing their prices to make their properties more attractive to buyers. This trend is most popular in Florida and Texas, as over 30% of homes are now much cheaper than before. But does that mean more sales?
AgentStory.com answers the question with a resounding no. Basically, landlords in Texas have been struggling to sell their homes in recent months. But further reviews show that it might actually be a good thing for the market.
Bad News From Texas
AgentStory.com, a leading real estate company, recently analyzed some home listings and agent performance in Texas. It discovered that property sales had gone down at an alarming rate.
Approximately 65% of homes worth $2 million and above didn’t sell. In other words, the home was either removed from the site or expired after a while.
Let’s Start With Austin, Texas
As for homes in Austin worth $1 – $2 million, their sales went down by 48%. This next category actually performed better as properties priced between $800,000 to $1 million went down by 40%.
The trend continues as Texas homes sold between $450,000 and $800,000 dropped by 36%. What about homes listed for $300,000 to $450,000? Their sales were reduced by 36%. But properties that cost $300,000 or less had the lowest rate at just 18%.
Houston Got Hit Hard Too
Houston wasn’t spared from this trend either. Homes worth $2 million and above dropped in sales by 55%. This decline was between September 2023 and February 2024.
At the same time, homes priced between $1 million and $2 million dropped by 51%. The same also happened for properties between $800,000 and $1 million. As for buildings worth $450,000 to $800,000, they went down by 53% too.
Things Aren’t Looking Good For Dallas Either
The housing market isn’t friendly in Dallas either. Homes worth $2 million or more didn’t sell and dropped by 21%. Even houses worth $1 to $2 million saw 36% of properties struggle to sell.
As for listings valued between $800,000-$1 million, around 37% didn’t sell. Even 35% of homes valued at $450,000 and $800,000 were unable to get off the shelf. Lastly, sales for buildings worth $300,000 and $450,000 met the same fate at 38%.
The Median Price Of The Three Cities
All cities in Texas were hit hard, but the big three, Austin, Houston, and Dallas were hit the hardest. That’s because they have some of the state’s most expensive properties. Here’s more context:
The Median house price in Texas is $380,000. But for just Austin, Dallas, and Houston, the cost is $650,000, $450,000 and $359,997 respectively. This shows how these three were the most expensive states and why they got hit the hardest.
Here’s Why It’s Happening
Everyone’s alarmed at how badly home sales are performing. What’s the problem? The answer is simple – progress. Landlords and agents can make sales because the market is beginning to do better. Let us explain!
Recently, Texas and Florida teamed up to build new homes in their states. This new addition naturally caused prices to go down as there was more supply to meet the high demand for more homes.
Buyers Are Waiting For Better Opportunities
The recent drop in demand means sellers will reduce their prices to be more appealing in the market. Buyers know this and want to stretch it out as far as possible.
They will wait a little longer to see how sellers react, especially now as homebuying season heats up. Once the price slashes go even lower, the buyers will swoop in and claim their real estate prize.
‘It’s Great News For Homebuyers’
Reventure CEO Nick Gerli commented on the situation recently. He said: “The surge in inventory, and the associated decline in home prices that has started in some Texas metros, is great news for homebuyers across the state.”
He continues, stating that it means Texas is slowly becoming a buyer’s market. “I wouldn’t be surprised if things continue to get better for Texas buyers in 2024,” he adds.
It’s Also Essential For Tackling Homelessness
Homelessness seems to be a general problem throughout the US. For Texas, the homeless population increased by 21.2% in 2021. This means that a total of 49,567 individuals are struggling for permanent residence.
There are many reasons Why these people are homeless and one of them is how expensive homes are. The few that have some money saved behind can barely use it to get a permanent place to stay.
Won’t Homeowners Sell At A Loss?
Homeowners are steadily lowering their prices to attract more buyers this season. But won’t this make them sell at a loss? Technically, no. While their earnings will be smaller now than last year, it doesn’t count as a loss.
The homes were built several years ago and at a far cheaper cost than the selling price. So, even if they drop by a few figures, it’s still a worthwhile deal. Besides, they can always take their listing off the market if it gets too unfavorable.
Will Prices Continue To Drop
The future of Texas’ housing market is unpredictable, especially regarding whether the prices will continue to drop. Let’s analyze the data. First, the Median price of homes in Texas was around $287,000 in February 2020.
This figure peaked in the summer of 2022 at about $402,500. Now, compared to 2024, the median price for homes is approximately $380,000, which is far beyond pre-pandemic levels. So, while the current price is definitely low, they’re still nowhere near their original level.
Texas Forecast For 2024
While it’s hard to predict how the market will go, some experts have given their prediction for Texas. They estimate that the year will end up about 2.8% overall then increase a bit by 1.5%.
In other words, they don’t only think that prices will drop, but they’ll also rise as time progresses. Why? Probably due to people and investors buying the “cheap” houses in Texas.
For Now, Sales Are Terrible
So far, homeowners and agents can’t sell their homes, leading to more than 30% of them being removed from the market. This problem is because Texas decided to add new homes to the state and meet the growing demand.
Although the news may sound scary, it’s actually a good thing. Apparently, the price drop means more investors will be thrilled to spend on Texas and push the economy forward. But, after a while, the price drop will stop and return to normal except Texas keeps adding more units.
