TX homes are flying off the market, challenging affordability

Dive Brief:

The Texas housing market is heating up, with homes in the state averaging a record 55 days on the market, according to The Dallas Morning News, citing data from Texas A&M University's Real Estate Center.
North Texas properties are selling faster than the state average, with those in Fort Worth and Dallas turning in an average of 30 days and 31 days, respectively.
Tight supply — less than four months statewide and less than three months in North Texas — is pushing home prices to new highs. Prices in the state are up 43.1% from 2007, compared to 7.4% nationwide for the period.

Dive Insight:

Texas housing markets are among the country’s most active. The Lone Star State has some of the country’s fastest-growing cities, with three of its metros leading a cohort of 11 major markets that each grew by more than 1,000 people per week from 2010 to 2016.

One contributor to the population influx has been the state’s relatively low cost of living and central location, which has encouraged corporate relocations and new development. Dallas, for example, is gearing up for companies like Toyota and Jacobs Engineering as they leave behind pricey Southern California real estate. In Irving, TX, Verizon is building a $1 billion, 2-million-square-foot mixed-use development near its offices there slated to include, retail, housing and office space as well as a Dallas Area Rapid Transit station.

The state’s affordability suits first-time buyers. A recent SmartAsset survey ranked Texas as the best state for this cohort due to its relatively stable market and high number of mortgage lenders in its major cities.

Still, affordability concerns are building as sales and prices continue to break records and inventory struggles to meet demand. Dallas–Fort Worth is at risk of losing its place among the nation’s most affordable markets after its median home price beat the national median in Q1.

The state is looking to new construction to meet its expanding housing needs. Texas took a 38% share of the master-planned community market in 2016. National builder Taylor Morrison is among those digging in, with a host of communities opening and selling this year. Major MPCs underway in the state include the new 7,200-acre Walsh community in Fort Worth, TX, and the recently opened, 3,600-acre Elyson, near Houston. Many of these communities include product in the entry-level category.