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Download REX Analysis – The Impacts of COVID-19 On The Texas Housing Market
AUSTIN, TEXAS, Wednesday, September 23 – REX, the Texas-based company leading the digital real estate economy, released a new report Wednesday detailing the state’s housing market trends during the COVID-19 pandemic.
Public data compiled and analyzed by REX’s data team, led by Chief Data Scientist Andy Terrel, tells the story of a flurry of activity in the market as consumers reacted to pent-up demand over a weak spring, long-term low inventory, and low interest rates.
“Inventory volume in Texas has been down for two years now,” said Terrel. “An influx of out-of-state workers taking advantage of lower prices and rock bottom interest rates has kept volume in Texas low,” said Terrel. “COVID-19 slowed the market dramatically but new listings have recovered at a rapid pace over the course of the summer.”
New jobs and continual reports of mid-sized companies to large corporations relocating to Texas has had a positive impact on the housing market throughout 2020. Terrel also predicted any new Federal stimulus package would increase the constant demand between now and the end of the package’s benefits.
Prior to the pandemic, 2019 homeownership in Texas sat at 62% but the volume of homes on the market was down in most metropolitan areas across the state (13% YOY in listing volume in January 2020).
Indicators of a summer surge included:
- Home sales were up in August compared to YOY figures from August 2019: 22% in Austin, 11% in Dallas-Ft. Worth-Arlington, 6% in Houstin, and 7% in San Antonio.
- The volume of active listings was down down in August 22% YOY from Q2 2019; 32% in Austin, 28% in Dallas-Ft. Worth-Arlington, 23% in Houstin, and 22% in San Antonio.
- Home value was on the rise throughout the summer, hitting an average of $252,000 in Q2 2020, up 2.9% YOY. Among MSAs of interest:
- Austin: $353K in July 2020, up 10% YOY
- Dallas-Ft. Worth-Arlington: For SFH, $292K in August 2020, up 9% YOY
- Houston: $270K in July 2020, up 8% YOY
- San Antonio: $260K in August 2020, up 9% YOY
Employment in Texas during the pandemic bounced back quickly. Professional and business services fell from 1.84M in February 2020 to 1.69M in April 2020. However, as of July 2020, statewide employment had recovered to 1.75M.
- Employment in financial activities (finance, insurance, and real estate) fell from 816K in March 2020 to 796K in May 2020; as of July 2020, employment had recovered to 804K
- Employment in construction fell from 797K in February 2020 to 729K in April 2020; as of July 2020, employment had recovered to 737K
State revenue did suffer some setbacks due to the pandemic. The Texas Comptroller projects a 9.5% decline in general revenue-related funds available for general-purpose spending for the 2020-21 two year budget process. This represents a decline from $11.6B to $110.2B in available general-revenue funds.
Digital Real Estate Creating Opportunity for Texans, Experiencing Rapid Growth
The digital real estate economy has gained significant momentum nationwide during COVID-19, thanks to the convenience and savings offered through online tours, reduced transaction fees, and bundled services. Gains in this area have helped consumers maximize equity, stimulate growth in the housing market, and soften the negative impacts to state revenue and losses in the financial and construction sector job market.
REX’s growth across Texas serves as an example:
- Homeowners in Texas are increasingly turning to REX to market and sell their home. Statewide leads are up 52% in July compared to April. Leads are up 56% in Austin and 47% in San Antonio over the same time period.
- Interested buyers are taking advantage of REX’s online platform and industry-first virtual showings tool. Since April 2020, requests to tour REX’s listings in Texas have jumped 120%. Tours doubled in Austin and spiked a full 140% in San Antonio.
REX is continuing to convert offers to escrows at a rapid pace after posting record company figures in the month of July. In Texas, escrows are up 180% from February and 75% since April. Escrows in metropolitan areas were even higher — 120% in Austin since February and 200% in San Antonio over the same time period.