Texas Real Estate Market: Will Sellers Dominate the Market in 2024? (2024)

Texas home prices saw a downward slide as the median sale price declined by a 0.2% year-over-year from $348,100 to $347,400. Despite a marginal decline in home sales, the market remains strong with 24,735 homes sold.

The number of homes listed on the market declined by 10.1% YoY from 125,000 to ~114,000 homes, with only 3 months of supply. Does the scarcity of houses make Texas a seller’s market? Let’s look at the facts.

Dallas homes sold for a median sale price of $420,000 in September, up 6.32% year-over-year. Homes in Houston sold for a median sale price of $325,000, a 1.40% increase year-over-year. There were a few markets in Texas where prices declined year-over-year.

Interest rates are at record highs, with few home buyers. But the inventory is so low that 15.6% of homes sold above the list price!

• If you are a home buyer: You can avoid bidding wars and avail seller concessions if you buy a home now. The 8.5% interest rate and mortgage payments are significant, but rates are unlikely to drop in the next few months. If they do, you can refi.
• If you are a home seller: You can lock in Texas’s stagnant home prices. Homes listed on MLS sell faster and for 17.5% more than off-MLS homes. That could be thousands of dollars in additional proceeds if you sell via Houzeo.

The current Texas real estate market statistics don’t reflect the national trend of high demand and low supply.Despite the strong housing demand, home sales tanked. The property prices also have decreased.

So, How is the Real Estate Market in Texas?

Swell! Home values in Texas rose by 48.46% in the last 5 years. Home sales decreased by 10.1% in September 2023 YoY and the mortgage rate climbed to 7.84%! So, Texas’s housing market remains resilient and in demand.

Even if mortgage rates continue to increase alarmingly, home sales will not falter. So, if you want to sell a Texas property, now is the right time to list it on MLS.

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Texas Real Estate Market Statistics

• Average Home Prices: The average median home price in Texas is $347,400, down by 0.2% YoY. In 2024, experts predict the median sale price will increase due to the tight inventory. Currently, the sale-to-list price ratio is at 97.60%, with a decline of 0.5 pt YoY compared to September 2022.
• Home Sales: As per September 2023 data, home sales decreased by 20.2% YoY! In September 2023, 24,735 homes were sold, down from 29,736 in September 2022.
• Average Rent Prices: Rental costs vary statewide. An average tenant in Dallas pays $1,592, while the one living in Austin pays $1,806.
• Median Days on Market: The median days on the market for homes for sale was 42 days, up by 9 days YoY.
• Pending Sales: The number of homes for sales shrank by 10.1% YoY compared to 2022. Currently, there are 114K homes for sale in Texas.
• Months of Supply: The average months of supply is 3 months. Texas’s inventory is as squeezed as the national housing market.

Texas Housing Market Predictions 2024

Texans have survived the shockwaves of skyrocketing mortgage rates and rising home prices of 2023. Here’s what we predict for Texas’s housing market:

1. Home Sellers Will Return to the Market in 2024: Sellers who chose the sidelines in 2023 will come back. Especially those who can’t avoid new jobs or want to move to a cheap place. Whitney, the analyst who predicted the 2008 financial crisis accurately, has forecasted that baby boomers looking to downsize will also add up to 30 million housing units. Yowaza!
2. Mortgage Interest Rates Will Stabilize by the 2nd Half of 2024: Mortgage rates hit 7.79% in October 2023, the highest level in 23 years. However, the rate dropped to 7.35% in November due to the softening labor market and slowing economy. Even the annual inflation rate went from 3.7% to 3.2%. We think the rates will remain above 6%, but they will stabilize in the second half.
3. The Number of Home Buyers Will Rise: The historically high interest rates averted buyers in 2023. But mortgage demand rose after the interest rates lowered to 7.35% in November. The easing inflation and stabilizing rates will bring back house hunters.
4. Home Prices Will Continue to Rise: Home prices were steady in the top metros across TX YoY, reaching $347K in September 2023. Experts predict home prices will rise because of the low supply-high demand dynamic changes.
5. New Home Constructions Sales Will Increase: Texas is leading the nation in new home construction, with 22.5% of occupied housing units. There are more than 200,000 permits issued in 2023. Houston leads Texas in new home construction with over 23,000 permits issued in 2023.
6. iBuyers Will Continue to Make Lowball Offers: iBuyers offered 104.1% of market value in 2021. They offered 86% in 2022 and around 70% in 2023. Opendoor and Offerpad have lost billions of dollars in 2023. As they struggle to survive, they will make lowball offers.

Bonus Prediction: Buyer Broker Commissions Will Be Negotiable!

In a shocking turn of events, the jury in Missouri awarded more than $5 billion in damages to the Sitzer-Burnett plaintiffs. This motivated nationwide home sellers to file grievances against NAR’s Cooperative Compensation Rule.

NAR’s Cooperative Compensation Rule or Participation Rule states that listing brokers must offer competitive compensation to buyer agents if they want to list properties on an NAR-affiliated MLS.

Lawsuits like Moehrl, Gibson, Batton, Nosalek, and Batton 2 challenge the Participation Rule. They accuse NAR and other top real estate companies of colluding and conspiring to keep agent commissions high.

If the jury also finds the defendants guilty in these cases, buyer agent compensation may change. Buyer agents may become obsolete by 2025! Phew.

While buyer agents are unlikely to be obsolete in 2024, they may be open to negotiating commissions. That’s probably how they will still have some skin in the game.

When Will the Housing Market Crash in Texas?

Texas’s spacious countryside, diverse cities, and strong economy will continue to attract buyers. 6 of the 15 fastest-growing U.S. cities namely Georgetown, Kyle, Leander, Little Elm, Conroe, and New Braunfels are in Texas. Georgetown is the fastest-growing city in Texas, with a population growth of 14.4% year over year.

Texas’s job market is also strong. The unemployment rate is at 4.10%. Texas’ private sector employment grew by 2.6% in September 2023, faster than the national average of 2.0%. And Texas’ low tax rates and strong economy are a major attraction for businesses and individuals alike.

The average cost of living in Texas is $45,114. The median household income is $73,000. Living in the bustling cities and scenic countryside of Texas is relatively affordable. So it is unlikely that Texas’s housing market would crash anytime soon.

2024: Is it a Buyer’s or Seller’s Market?

2024 will be a terrific market for sellers. (And buyers, too!)

Home prices in Texas are steady but they will rise till the supply-demand dynamic changes. The number of houses for sale in TX was 114,000 in September 2023. Sellers can leverage the limited supply of homes in Texas to ask for better asking prices, making it the best time to sell a house in Texas.

In November, the mortgage rate plummeted from a two-decade-high rate of 8% to 7.35%, adding more new listings on the market. This shows that those who refused to sell due to mortgage rate lock are finally acclimatizing to 7% rates. Come Spring 2024, more homeowners will follow suit and list properties on Texas MLS.

The steady increase in new home listings in Texas has also brought back buyers who were hugging the sidelines. In fact, the recent uptick in mortgage applications shows that buyers are returning.

House hunters who could not find affordable homes in 2023 will also start shopping in 2024. The demand for Texas houses will increase – and that’s why sellers may be able to dominate the market.

However, new builds will compete for attention from buyers. Home builders have persuaded buyers to buy new construction homes with mortgage buydowns worth $30K in 2023! Builders will continue offering concessions in 2024, and home sellers may have to wage wars against them.

Listings of new constructions, baby boomers looking to downsize, and desperate home sellers will flood the market in 2024. The properties for sale in Texas will increase. So, whether you are looking for a condo in Miami or a single-family primary home in Tampa, you will find your dream home next spring.

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Disclaimer: This article is for informational purposes only. It does not constitute an offer, solicitation of an offer, or any advice or recommendation. Houzeo doesn’t provide any legal or financial advice. The views and opinions expressed herein are those of the author and do not necessarily reflect the views of Houzeo Corp., its affiliates, or its employees. However, the author does not make any representation or warranty, express or implied, as to the information’s accuracy or completeness, nor does the author recommend that the attached information serve as the basis of any investment decision.

Frequently Asked Questions about Texas Real Estate Market

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