Texas Sets Sales And Price Records

Last year was the best year for residential real estate in Texas since … 2015.

Boosted by strong gains in home sales activity toward the end of the year, a record 324,924 homes were sold in Texas last year, according to the “2016 Texas Real Estate Year in Review Report” from the Texas Association of Realtors. The median sales price reached $210,000—also an all-time high.

Compared with 2015, the previous record year for both metrics, total sales increased 4.6 percent and the median price rose 7.7 percent.

“Last year’s record home sales activity was fueled by the momentum of multiple years’ strong job and population growth across the state, despite the fact that Texas job and economic growth began to slow in 2016,” Vicki Fullerton, chairman of the Texas Association of Realtors, said in a statement.

This year isn’t expected to be as strong, partly due to affordability concerns. Household incomes aren’t rising as fast as home prices, a situation exacerbated by the inadequate pace of new-home construction due to labor shortages and regulatory obstacles. As of the end of December, the state had a little over three months of inventory—well short of the six months of inventory typical of a market with balanced supply and demand.

Homeowners in Texas also deal with some of the highest property taxes in the nation. The average effective property tax is 1.94 percent, according to SmartAsset’s Property Tax Calculator. The rate varies by county: Fort Worth, at 2.32 percent, has the highest tax rate among the major cities, followed by Houston (2.26 percent), Dallas (2.17), El Paso (2.13 percent), San Antonio (2.10 percent), and Austin (1.97 percent).

“Rising home prices and skyrocketing property taxes are driving up the cost of homeownership at an alarming rate,” Fullerton said in a statement.