North Texas home sales surged in September — up 27% from a year ago. It was the largest such annual price gain in more than a decade.
Real estate agents sold 11,408 single-family homes, a record number of purchases for the month of September, when sales typically slow.
But not this year.
Record low mortgage rates have caused a run on home buying even in the face of the COVID-19 pandemic.
Last month’s huge home sales increase is the fourth month in a row of double-digit percentage sales gains compared with 2019 levels, according to data from the Real Estate Center at Texas A&M University and North Texas Real Estate Information Systems.
September’s year-over-year gain was the largest yet.
“It’s amazing that sales are up 27% over last year’s but not surprising based on what I have been hearing,” said Paige Shipp, a housing analyst for CDCG Asset Management. “D-FW continues to benefit from buyers fleeing pricier markets, and we’re seeing even more migration to D-FW than pre-COIVD.
“Will the demand persist for the remainder of 2020? All signs point to yes,” Shipp said. “But my concern is that there won’t be enough supply and the right supply for buyers.”
The number of single-family homes listed for sale with North Texas real estate agents is down almost 50% from September 2019 levels.
The tight local housing supply has fueled a jump in prices. Median home sales prices in the area rose 10% in September to $291,000, near an all-time high.
“As prices climb, fewer and fewer buyers can afford to purchase a home,” Shipp said. “So the fact that we are in a booming market could be the reason that sales slow in the future.”
North Texas median home sales prices have soared by more than 40% in the last five years.
“With the dramatic decline in the 30-year rate, the housing affordability challenges have become less of a concern,” said Ted Wilson, principal with Dallas-based housing analyst Residential Strategies. “But if prices to continue to increase at their current pace over the next year, it is reasonable to believe that demand might abate some as affordability becomes an issue again.”
With the big increases in the last few months, there have been 88,035 North Texas home sales in the first nine months of 2020, up 6% from the same period last year.
And a 23% rise in pending sales at the end of September — properties under contract but not yet closed — indicate that October will be another big month for home purchases.
“Listings continue to diminish and are now at a record low month supply — under two months,” said Wilson. “It would be difficult to imagine that existing sales will continue to climb unless there is an increase in the pace of new listings coming online.
“Prospective purchasers have very limited choices today.”
Home sales usually slow in the fall, but this year there’s no sign of waning buyer activity.
The recent annual sales increases have wiped out significant declines in home transactions in April and May when pandemic lockdowns slowed purchases.