Texas’ housing market falters as prices fall, sales drop

The Texan cities of Dallas and Austin have seen the biggest year-over-year drops in the four weeks ending July 14, according to a recent report by real estate brokerage Redfin. The Lone Star State’s housing market is experiencing a modest downturn following the addition of new inventory.

In the Dallas metropolitan area, the median sale price dropped by 2.3 percent in the four weeks ending July 14, compared to the same time frame a year earlier—the biggest decrease in the country. It was followed by Austin, which saw a 2.1 percent year-over-year drop.

Both Dallas and Austin exploded with activity during the COVID-19 pandemic, with home prices being pushed up by people moving from out of state, thanks to the opportunity to work remotely. In Dallas, home prices peaked in May 2022, reaching an all-time high of $488,000. In Austin, the median list price of a home reached an annual record of $503,000 in 2022, according to the Austin Board of Realtors.

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An aerial view of the downtown skyline on February 22, 2024 in Dallas, Texas. The city and Austin saw the biggest year-over-year home price drops in the entire country in the four weeks ending July…
An aerial view of the downtown skyline on February 22, 2024 in Dallas, Texas. The city and Austin saw the biggest year-over-year home price drops in the entire country in the four weeks ending July 14, according to a recent Redfin report.
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However, while home prices fell gently in Dallas following the end of the pandemic boom, the Texas capital of Austin saw dramatic drops, which led some to say that the city’s housing bubble was finally bursting. Newsweek contacted Redfin for comment by email early on Friday morning.

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In both cities, as is the case for much of Texas, home prices are likely dropping because the growth of inventory has outpaced demand.

The Lone Star State has significantly increased its inventory compared to 2023 level: in June, there were 156,743 homes for sale in Texas, up 22.4 percent year-over-year. The number of newly listed homes was 43,262, down 0.64 percent year-over-year.

As the number of options available on the market has been growing and mortgage rates remain high, hovering around the 7 percent mark, buyers in Texas have been allowed to be a little more choosy. Homes listed for sale lingered on the market for an average of 42 days, up 8 year-over-year. A listing is considered stale when it spends at least 30 days on the market without going under contract.

Sellers are trying to meet buyers’ expectations, often reducing their prices. Redfin says 35.8 percent of homes had price drops, up from 31 percent in June last year.

The median sale price of a home in Texas was $354,800 in June, according to the real estate brokerage, down 0.94 percent year-over-year. It is the first drop since prices started climbing back in the state in October 2023, and it goes against the national trend. In the four weeks ending July 14, the median sale price of a home in the U.S. was $396,379, up 4.4 percent year-over-year—just about $100 shy of last week’s all-time high.

The metropolitan area with the biggest decrease in pending sales in the country is also in Texas: in Houston, pending sales have fallen by 24.4 percent year-over-year in the four weeks ending July 14, according to Redfin. The city has also seen the second-biggest decrease in new listings, which fell by 6.6 percent compared to a year earlier.

Home prices are budging in Houston, where they remain relatively high, possibly discouraging aspiring buyers. As of June, the median sale price of a home in the city was $349,000, up 2 percent year-over-year, according to Redfin.