Real Estate Ups and Downs

First-time Texas homebuyers bear the brunt of record low inventory

Good news if you're planning to sell your home, not so good if you're looking to buy: According to the Texas Quarterly Housing Report, even though median home prices were up statewide in the first quarter of 2015, housing inventory hit an all-time low.

In Dallas specifically, home sales in 1Q2015 were up 1.82 percent over the same period last year, and the median price increased nearly 12 percent — from $192,600 to $215,700. Available homes for sale, though, have dropped 18 percent, to just 1.8 months of inventory.

In Fort Worth, sales were up 4.43 percent, median price was up 13.62 percent and inventory plummeted 25 percent from first quarter of 2014, to 2.1 months. Collin County had very little change in home sales, but there isn't that much there to buy: Inventory dropped more than 13 percent, down to only 1.3 months of inventory.

Across Texas, the 1Q2015 numbers look like this: Sales were up a little more than 4 percent; the median price went up nearly 8 percent; and inventory was down almost 9 percent, to 3.1 months, a new record low.

“The first quarter of the year is typically a slow period for home buying and selling, so we were thrilled to see strong home sales gains statewide in the first part of 2015,” says Scott Kesner, chairman of the Texas Association of Realtors, in a release.

The news isn't entirely rosy if you're a first-time homebuyer, because low inventory and high prices can spell trouble down the road.

“Homes are being built as quickly as possible, yet most are not in the price range where inventory is needed most – the entry-level market,” says Jim Gaines, Ph.D., economist with the Real Estate Center at Texas A&M University. “Interest rates are still low, but tight lending standards, rising home prices and slim inventory have created a tough market for first-time homebuyers.”

You can read the first-quarter report in its entirety at the Texas Association of Realtors website.

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Rent Report

Here's how many Texans are paying too much for rent, report reveals

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Millions of Texas renters, both current residents and new arrivals, suffer from wallet whiplash.

A new report from the Texas Affiliation of Affordable Housing Providers shows 45 percent of the state’s renters spend more than 30 percent of their income on housing. Renters occupy more than 4.2 million Texas households, representing nearly half of the state’s residents.

Worse yet, 81 percent of extremely low-income households in Texas spend more than 50 percent of their income on housing, the report says. For that income group, Texas has a shortage of 864,000 affordable homes.

Thirty percent is the standard financial benchmark for spending too much income on rent, while 50 percent puts a renter in the “severely cost-burdened” bucket.

“To sustain growth and secure future prosperity, Texas will need more than 320,000 additional affordable homes [rented and owned] to address workforce housing affordability and meet the demands of a growing population,” says the report.

“Today, the state is creating thousands of new jobs,” the report adds, “but housing supply has not kept pace with demand, driving up housing costs and constraining continued economic growth.”

Not surprisingly, people who live in or move to three of Texas’ biggest metro areas get hit with the state’s highest apartment rental rates. Here’s Apartments.com’s list of the 10 most expensive places for renters in Texas, based on apartments whose average size ranges from 713 square feet in Austin to 771 square feet in Plano:

1. Frisco — $1,477 per month
2. Plano — $1,461 per month
3. Austin — $1,417 per month
4. Dallas — $1,413 per month
5. McKinney — $1,363 per month
6. Grand Prairie — $1,327 per month
7. Irving — $1,318 per month
8. Garland — $1,237 per month
9. Fort Worth — $1,217 per month
10. Houston — $1,183 per month

San Antonio boasts some of the lowest average rent among Texas’ 10 most affordable markets: $1,075 per month. Mesquite, a Dallas-Fort Worth suburb, also fits into that category, with average monthly rent of $1,052.

Earlier this month, Gov. Greg Abbott announced more than $114 million in grants to help develop or rehabilitate properties, providing more than 4,400 affordable rental units.

“As our state grows, we must ensure that Texans have access to the affordable housing they need to thrive,” Abbott says.

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