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RECON for May 25, 2021RECON for May 25, 20212021-05-25T05:00:00Z2021-05-25T05:00:00Z
House with for sale/sold sign
Texas’ housing boom lost momentum in April as existing homes sold through Multiple Listing Services ticked down 0.8 percent month over month. One restriction of the Texas housing market is the severe lack of inventory for sale. Keep scrolling for more. (Photo from Center files.)
May 25, 2021

Constrained inventories, rising mortgage rates, declining affordability slow Texas housing

​​​​COLLEGE STATION (Texas Real Estate Research Center) – Texas’ housing boom lost momentum in April as existing homes sold through Texas Multiple Listing Services (MLS) ticked down 0.8 percent month over month.

"While Texas housing sales may recover to January peak levels, we do not expect activity to maintain its double-digit annual rate of increase in the long term," said Dr. Luis Torres, research economist for the Texas Real Estate Research Center at Texas A&M University. 

One restriction of the Texas housing market is the severe lack of inventory for sale.

"The number of new MLS listings rose for the second straight month in April, but Texas’ months of inventory remained less than 1.3 months," according to Torres. "For homes priced less than $300,000, which constitutes three-quarters of total sales, only one month of inventory was available. In the major metros, inventory was even more constrained."

Torres noted that the median credit profiles of Texas borrowers improved during March, reflecting the fact that only the most qualified housing applicants are able to outbid their competition for their desired homes in a period of exceptionally tight inventories and strong housing demand.

In addition to depleted inventory, national mortgage-interest rates have crept up in the past few months from a series trough of 2.68 percent in December 2020 to 3.06 percent in April.

Torres notes that mortgage rate fluctuations within Texas reflected the trend in national data. Combined with double-digit home-price appreciation, income growth cannot keep up, threatening housing affordability.

"Our Texas Repeat Sales Home Price Index, which accounts for the fact that the sales composition is shifting toward higher-priced homes due to lack of inventory at the bottom price cohorts, corroborated substantial and unsustainable home-price appreciation of 10.4 percent annual growth during 1Q2020," said Torres. "Meanwhile, the Center’s Home Affordability Index revealed housing affordability declined in Austin, Fort Worth, and Houston over the past three months relative to 4Q2020."

According to the National Association of Realtors, existing-home sales fell for the third straight month in April, decreasing 2.4 percent. Potential homebuyers across the country are experiencing many of the same challenges Texas buyers face – diminished inventory, rapid median-price growth, and tough competition for what homes are available for sale.
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Texas job growth slows in April

AUSTIN (Texas Workforce Commission) ​– The state's job growth lost momentum last month but still inched upward. 

Texas added 13,000 nonagricultural jobs in April, marking gains in 11 of the last 12 months, according to the Texas Workforce Commission. 

With the job gains, the Texas economy needs to gain almost 457,000 jobs to return to pre-pandemic levels.

April's seasonally adjusted ​unemployment rate was 6.7 percent, down 0.2 percent from March 2021 and higher than the nation's rate of 6.1 percent.

"Anecdotal evidence from service sector businesses points toward the lack of available applicants and generous unemployment benefits as major impediments in rehiring workers," said Dr. Luis Torres, research economist at the Texas Real Estate Research Center. 

To eliminate the incentive of remaining unemployed, Texas will opt out of further federal unemployment compensation related to the COVID-19 pandemic effective June 26, 2021. The measure would reduce minimum unemployment payments from $19,240 a year to $3,640 a year.​

Amarillo had the lowest nonse​asonally adjusted unemployment rate in the state​ at 4 percent. McAllen-Edinburg-Mission had the highest at 10.3 percent. 

All employment sectors had seasonally adjusted job gains since April 2020 except for mining and logging, which saw employment fall 11.7 percent. The leisure and hospitality sector's employment jumped 46.1 percent over the year. ​
Sketchy drawing of commercial buildingsThe Texas Real Estate Research Center's Texas Quarterly Commercial Report looks at past, present, and future commercial real estate activity in the state's four major metropolitan areas. It covers the office, retail, and warehouse sectors. Read and download the report for free, and subscribe to know when the next issue is published. 

Cold Creek Solutions finds anchor tenant for cold storage facility

​​DENTON (Dallas Business Journal) – Southwest Warehouse Services is taking half of Cold Creek Solutions’ planned 374,560-sf cold storage facility on a 15-year lease. 

The building will be on 23 acres just northwest of I-35 and Barthold Rd. ​

The project breaks ground next quarter and will be complete in second quarter 2022.

Once completed, the project will be only the 15th cold storage facility constructed in the last 20 years in Texas, according to JLL.

ARCO National Construction will design and build the facility. 
NewsTalk Texas logoHungry for more Texas real estate news? Then feast your eyes on NewsTalk Texas, our online news database. Here are a few of the stories you'll find there this week: NewsTalk Texas is updated each weekday, throughout the day. 

SA multifamily portfolio under new ownership

SAN ANTONIO (Berkadia) – ValCap Group LLC has sold the Park West-Parliament Bend Portfolio, a two-property multifamily portfolio.

The 327-unit Park West is at 11845 West Ave. It has one- and two-bedroom floor plans and a fitness center, swimming pool, business center, TV lounge, laundry facilities, playground, basketball and volleyball courts, dog park, and outdoor​​ area with grilling stations.

The 232-unit Parliament Bend at 11838 Parliament St. has one- and two-bedroom units. Amenities include a fitness center, swimming pool, clubhouse, laundry facilities, playground, basketball and volleyball courts, dog park, and outdoor area with grilling stations.

The buyers were Old Three Hundred Capital and Pearlmark Real Estate.

Berkadia San Antonio represented the seller. ​
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Work starts on Five Corners business park

​​HOUSTON (Realty News Report) – Work has started on the Business Center at Five Corners, a five-building, 542,090-sf industrial park along Beltway 8.

The development is on 44 acres near Hira​​m Clarke Rd. between S. Post Oak and Almeda Roads wi​thin the Five Corners Management District.​​ 

Buildings will range from 68,304 to 138,163 sf. The property will have 595 surface parking spaces.​

Delivery is set for first quarter 2022.

​The project is a joint venture of Levey Group and ANICO Eagle. CBRE is handling leasing.​​
Communication Matters video seriesThe Texas Real Estate Research Center's Texas Home Price Index measures price appreciation changes for residential single-family homes. It provides data for eight different Texas metros across three different price ranges.

Scannell starts on San Antonio spec project

​​SAN ANTONIO (CBRE) – Scannell Properties has begun construction on Cornerstone Logistics Crossing, a Class A speculative industrial park.

The 28.8-acre project will have two buildings, one measuring 224,220 and the other 199,040 sf. It will have 32-ft clear heights, flexible space configuration, concrete tilt-wall construction, and trailer parking.

Delivery is set for late third quarter and early fourth quarter 2021.

CBRE is marketing​ the project for lease.​

300K-sf office building planned for CityLine in Richardson

​​RICHARDSON (Dallas Business Journal) – A partnership between Transwestern Development Company and BC Station​ Partners has revealed plans for The Exchange at CityLine, a six-story, 300,000-sf build-to-suit office project. 

Designed by BOKA Powell, the project will be near the southeast corner of N. Central Expy. and President George Bush Tpke.

The project will include on-site fitness and food service accommodations and a parking garage with a 4.5 per 1,000 parking ratio. 

Transwestern is handling marketing.
Looking for reliable rural land data for Mississippi, Louisiana, Alabama, and Texas? We've got you covered. Get the data exclusively from the Texas Real Estate Research Center.
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Material herein is published according to the fair-use doctrine of U.S. copyright laws related to non-profit, educational institutions. Items attributed to sources other than the Texas Real Estate Research Center at Texas A&M University should not be reprinted without permission of the original source. To send news items for consideration, e-mail Hayley Rieder. The Texas Real Estate Research Center is part of Mays Business School at Texas A&M University in College Station - the heart of the Research Valley.

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