The number of homes for sale and homebuyer interest dropped by more than 13% in March 2020, according to the latest reports. While that seems to set the stage for serious declines in the U.S. real estate market this year, experts say:
- The impacts and dynamics will be different in different areas of the country.
- The real estate market in the Northeastern U.S. faces the biggest risks and the most severe potential impacts.
- It’s still too early to predict just how extensive and severe the fallout in the U.S. real estate market will be due to COVID-19. The next few months are expected to be very telling.
Focusing on Texas, here’s a look at some key impacts the coronavirus has already had on local real estate markets and what experts predict for the future.
Coronavirus & the Texas Real Estate Market: 5 Impacts
Weeks into the COVID-19 outbreak, the Texas real estate market has already experienced these key impacts. The following data has been sourced from the latest reports from Realtor.com, reflecting findings for March 2020.
1. Big changes in listing prices for homes in Houston, Dallas & Austin
While few major U.S. metropolitans saw drops in home asking prices, two major areas of Texas did:
- In the Dallas-Fort Worth-Arlington area, listing prices declined by nearly 3%.
- In the Houston-The Woodlands-Sugar Land area, listing prices dropped by about 1.4%.
Interestingly, Austin saw the reverse happen, with the average asking price jumping up by about 3%.
2. A dramatic decline in inventory across the board
Like real estate markets in most major cities across the U.S., those in Texas saw steep drops in new listings. Specifically, total listings in the:
- Austin-Round Rock area dropped by nearly 21%
- Dallas-Fort Worth area dropped by about 10%
- Houston-The Woodlands-Sugar Land area dropped by nearly 5%
- San Antonio area dropped by 2.3%
That, coupled with slowdowns in new home construction, has radically shrunk homebuyers’ options in several Texas real estate markets.
3. A sharp decrease in home showings
Across the state, physical home showings have declined by more than 41%. While that may indicate a decline in buyer interest, it certainly also reflects:
- How COVID-19 has changed the home purchase process
- The move towards virtual showings and 3D tours, as a way to replace or limit in-person showings
4. Low risk of a major housing market shakeout in Dallas, Houston & Austin
Ten counties in Texas are among the top 50 least vulnerable counties in the U.S. when it comes to the potential for a major fallout in the local real estate market. That’s according to a Special Report from ATTOM Data Solutions, which found that some of the least vulnerable areas of Texas include the:
- The Dallas-Fort Worth metro area, including Dallas, Collin, and Tarrant counties
- Houston area, including Harris County
- Austin area, including Travis County
5. Few buyers sidelining their plans to purchase a home
Experts say that only about 5 to 10% of homebuyers in Texas will put off their purchase this year, based on the uncertainty brought on by both COVID-19 and the upcoming election. Generally, these buyers will include those making discretionary purchases, like buyers looking for second homes or vacation homes.
For the most part, however, homebuyers across the state will continue looking for houses to purchase, only changing up their strategies for finding and buying the house in the age of COVID-19 (instead of pushing pause on the purchase altogether).
How COVID-19 Will Affect the Texas Real Estate Market: The Bottom Line
Despite the impacts the coronavirus has already had on the Texas real estate market, the bottom line is that:
- The data and the market’s responses are constantly evolving.
- Job security and availability will play a key role in housing trends and the real estate market in the coming months.
- Homebuyers in Texas may have fewer options in the age of COVID-19, but there may be better deals in some areas.
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