Florida and Texas markets are slowly regaining some balance
After heating way up over the past few years, prices and inventory in two of the most populous states are showing signs of stabilizing.
Key points:
- A Florida Realtors report found that while existing home sales were down in the state, prices didn’t change significantly from last year.
- In Texas, the statewide median sale price dropped 3.1% year-over-year, but Austin prices fell nearly 14%.
- Inventory in both states has increased to around a 3-month supply.
Massive waves of new residents flooded into Florida and Texas during the pandemic housing boom, leading to huge price growth in a short period of time. But the latest data on home sales and inventory suggests that the housing markets in two of the country's most populous states may finally be stabilizing — or even softening.
Florida's housing market is finding some balance
Florida Realtors, the largest Realtor association in the U.S., found that existing home sales for detached single-family homes and condos across the state were both down in June — 7.9% and 11%, respectively — year-over-year. And sales were down even more when comparing second quarter numbers to the same period last year. For the period of April through June, existing single-family home sales dropped 11.2% and condo sales fell 17.7% compared to the second quarter of 2022.
However, the median sale prices of $420,000 for detached single-family homes and $325,000 for condos and townhouses remained unchanged in June relative to the same period last year. On a quarterly basis, prices were up just a hair — .2% and 1.9%, respectively — in Q2 2023 vs. Q2 2022.
In addition to flattening prices, a noticeable uptick in inventory could offer some relief for buyers. According to Florida Realtors, single-family home inventory increased by nearly 14% year-over-year in June, putting the current supply at 2.8 months for existing single-family homes and 3.6 months for condos and townhouses.
The inventory gains are not only a good sign for buyers, but a signal that the hot Florida market is returning to some balance, Florida Realtors Chief Economist Dr. Brad O'Connor said in the report.
"Overall, we are at an inventory level that is about halfway between our pre-pandemic inventory level at this time in 2019 and our low point during the pandemic in 2021," he said. "The improvement we've seen in inventory levels is a sign that upward pricing pressures are moderating."
Texas could be fizzling out
The story looks a bit different in Texas, where the housing market as a whole appears to be cooling off — at least temporarily. According to Texas Realtors, the median price for homes in the state fell 3.1% year-over-year, from $357,388 in Q2 2022 to $345,000 in the second quarter of 2023, and listings were up more than 32%.
But not all metros and regions are experiencing the same conditions, Marcus Phipps, 2023 Chairman of the Texas Realtors said in the report.
"While the statewide median price eased down, median prices are actually up in about half of Texas markets," he said. "Despite that variation, the average number of days that homes spent on the market was up in every metro area, and the number of homes available increased in nearly every metro as well."
Austin and Dallas were particularly hot markets during much of the pandemic, but the former has also been one of the hardest hit during this past year's housing correction. According to the Texas Realtors quarterly report, median home prices in Austin — the most expensive metro in the state — were down 13.8% compared to the same quarter last year. The price drop was the largest of all metros analyzed.
Dallas has seen median home prices decline 4.7% during the same time.
Similar to Florida, inventory has also increased across Texas. Between Q2 2022 and Q2 2023, inventory increased from just two months of supply to 3.2 months. It's still far from a "balanced" market, however, as the Texas Real Estate Research Center suggests that six to 6.5 months of inventory is more reflective of a healthier market, the report notes.