Hot Texas new home market continues to post impressive numbers | HomesUSA.com® “Days on Market” index, other data shows vibrant activity
Dallas, Texas – April 23, 2018 – The Texas new home market has been on fire during the last year, as each month’s moving average of home sales has eclipsed the prior month. March was no exception, as evident in the state’s four largest new home markets – Dallas-Ft. Worth, Houston, Austin and San Antonio. New home sales were up, despite the fact that the pace of new home sales pace slowed slightly in March, according to the HomesUSA.com® New Homes Sales Index and other Multiple Listing Service data it released today.
“Texas continues to be perhaps America’s strongest new home market, and our mantra continues to be ‘build, baby, build!’,” said Ben Caballero, owner of HomesUSA.com and the number one ranked real estate agent in America. “At this point, only Houston is showing some signs it may be slightly over built. But demand could also be affected by a Hurricane Harvey hangover that has prompted some families to rent until the Houston drainage infrastructure has been addressed,” he added.
Tomorrow, the Commerce Department will issue its nationwide numbers on New Home Sales for March, at 10:00 am Eastern on Tuesday, April 24.
New home sales in Dallas-Ft. Worth, Houston, Austin and San Antonio totaled 3,631 in March, up from 3,623 in February. This is a 12-month rolling average of sales data, compiled by HomesUSA.com from local MLS and trade associations, including the Houston Association of REALTORS®, North Texas Real Estate Information Systems, San Antonio Board of REALTORS® and the Austin Board of REALTORS®.
The new home sales pace slowed slightly, as the HomesUSA.com New Homes Sales Index increased from 122.03 days in February to 122.63 days in March. The Index is a 12-month rolling average of the Days on Market (DOM) for new homes listed in the local Multiple Listing Services (MLSs) for Dallas-Ft. Worth, Houston, Austin, and San Antonio.
New home prices had been softening recently, but in March, the state index showed an increase in the average new home price. The statewide average was up to $349,757 in March from $349,017 in February.
Local Market Performance
In the state’s top new home market, Dallas-Ft. Worth, the sales pace of new homes quickened. The HomesUSA.com New Homes Sales Index showed the Days on Market (DOM) decreased in Dallas from 116.74 days in February to 115.66 days March.
In Houston, the opposite happened for the second month in a row. Its new home sales pace continued to slow as its DOM increased from 137.59 days in February to 140.69 days in March.
San Antonio’s new home sales pace picked up last month. Its DOM decreased from 108.79 days in February to 107.48 days in March. In Austin, new home sales pace slowed slightly last month, as its DOM increased from 112.73 days in February to 112.99 days in March.
New home prices stabilize
Statewide home prices have been stabilizing overall in 2018. That’s good news for home buyers, who saw monthly new home price increases dominate much of last year. (See Chart 1 – Texas New Home Sale Prices)
Dallas-Ft. Worth had the biggest jump in average new home prices last month, up in March to $353,796 from $356,480 in February. Houston saw a slight increase in new home prices in March. Its average new home price increased last month from $357,272 in February to $357,483 in March.
Austin has the best news for home buyers as new home prices dropped. The average new home price in March was $370,030, down from $371,284 in February. San Antonio saw an average new home price increase last month. Its average new home price in March was $293,018, up from $292,576 in February.
Texas New Home Sales Still Hot
New home sales remain strong statewide in Texas for March, yet sales growth is starting to flatten. The rolling 12-month average of new home sales statewide shows total home sales were slightly up from 3,623 in February to 3,631 in March. (See Chart 2 – New Home Sales | Texas)
That’s according to data compiled by HomesUSA.com® from local MLS and trade associations, including the Houston Association of REALTORS®, North Texas Real Estate Information Systems, San Antonio Board of REALTORS® and the Austin Board of REALTORS®.
The state’s two most prominent markets – Dallas-Ft. Worth and Houston – both experienced flat home sales in March. According to HomesUSA.com®, based on a 12-month rolling average, Dallas-Ft. Worth home sales in March were 1,332, down marginally from 1,335 sales in February. Houston home sales in March were 1,194 versus 1,193 sales in February.
New home sales were up in Austin from 622 sales in February to 630 sales in March. In San Antonio, new home sales were 474 in March versus 473 in February.
Understanding the new “Days on Market” Index
Caballero notes the average Days on Market for new homes “is about 65 days higher for new homes than for existing or ‘pre-owned’ homes.” Why?
“There’s a huge difference between the days on market for new homes and pre-owned or existing homes,” Caballero explained. “New homes are nearly always listed for sale during the early stages of construction. This early market exposure allows buyers the opportunity to customize the home. Plus, by placing more inventory on the market, as it is being built, expands the inventory of available homes, and that’s especially helpful for buyers and agents in a tight housing market.” (See Chart 3 – New Home Sales Index – Days on Market – Monthly numbers 1)
The HomesUSA.com® New Home Sales Index is the first index to track new home sales. Created by Caballero, who was named “Most Innovative Real Estate Agent” by real estate news firm Inman News, the index is an analysis of sales of homes listed in the Dallas-Fort Worth, Houston, Austin and San Antonio local Multiple Listing Services (MLS). (See Chart 4 – New Home Sales Index – Days on Market – Tracking)
1Prior month DOM numbers are subject to adjustment
Please note that the monthly data is based on information reported to the MLS that may be incomplete or subject to further revision by the MLS. While licensed real estate professionals are required to report closed sales to their local MLS in Texas within 72 hours of a closed sale, not all sales, unfortunately, are reported promptly, and some are published more than 30 days later. This late reporting causes the prior month’s reported index number to change to include newly reported sales. Only the previous month index number is impacted and that number, once adjusted, is the final and correct index number.