Housing inventory levels across Texas have reached the highest level since at least 2017, according to market expert Nick Gerli, a record which he suggests will lead to cooling prices in the coming months.
"There's now over 113,000 listings on the market in Texas," Gerli, CEO of Reventure, wrote on X earlier this week, citing data compiled by his app. "That's nearly triple the level 3 years ago. And comfortably higher than pre-pandemic," he added.
For Gerli, all of this suggests "continued downward price pressure in Texas throughout the rest of 2024." Newsweek contacted Gerli for comment by email on Friday morning.
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According to Reventure data, in 2017, there were 103,726 active listings in Texas; a year later, they dropped slightly to 103,069. While in 2019 they grew to 106,691 listings, a year later they plummeted to 74,650. In 2021, at the height of the pandemic, inventory reached a five-year low of 45,795.
Since then, inventory has been growing in the Lone Star State: in 2022, there were 68,569 listings in Texas; in 2023, 81,587; and this year, 113,613, according to Reventure data.
Redfin reported an even higher number of active listings in June, at a total of 157,875, up 23.3 percent compared to a year earlier. Of these, 43,317 were newly listed homes.
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"Texas is getting hit with housing inventory all over the state," Gerli wrote on the social media platform. "Most notably in Austin, Dallas, and San Antonio. Where inventory is now well above long-term norms."
San Antonio had a 52 percent inventory surplus, according to Gerli; Austin had a 51 percent surplus; Dallas 38 percent; and Houston 14 percent.
"The result is that list prices across Texas are dropping," Gerli said. In Austin, prices are down 6 percent year-over-year. In Dallas and San Antonio, they're down 4 percent. "Of course -- even with these declines in prices, values are still way too high for most homebuyers to afford. Which is causing continued soft demand," Gerli noted.
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According to Redfin, the median sale price of a home in Texas was $354,300 in June, down 1.1 percent compared to a year earlier.
"Texas is facing some similar issues to Florida, in that homebuilders are still delivering a huge pipeline of houses even in a down demand environment," he added. "At the same time, many investors in Texas are offloading properties purchased near the peak of the bubble. The result: a rampant surge in inventory and price cuts."
High prices across Texas despite surging inventory is a cause for concern for Gerli.
"This was a market that used to be truly affordable. From 2005 to 2019, home values in Texas were either undervalued or fairly valued," Gerli said.
"But today prices are about 24 percent overvalued compared to long-term norms. Less than a couple of years ago, but still at an unprecedented high level. When prices are so overvalued, it creates a lot of downside risk in the market. It means that values have detached from local income fundamentals," he continued.
"Either: the prices need to drop, or the incomes need to go up, or some combination thereof, to return buyer demand into the market."