Killeen-Area Home Sales And Prices Continue To Surge

With both the price of homes and the number of sales increasing in the third quarter, the Killeen area continues to be a desirable location for prospective home buyers.

Local Realtor and Killeen Mayor Jose Segarra said he believes the biggest draw to the area is lower prices when compared to other metropolitan areas.

“Especially when compared to some of our major surrounding cities like the Austin-Round Rock MSA, where their median sales price is $465,000 — which is almost double to our MSA at $235,000,” Segarra said.

Across Texas, the housing market has slowed slightly after a strong summer sales season, according to the Texas Quarterly Housing Report released by Texas Realtors.

The number of sales has declined 3.5 percent in the third quarter compared to the previous year, according to the report, marking the first time quarterly home sales in Texas have decreased year-over-year since the second quarter of 2020.

“Although we’re seeing a slight decline in homes sold from the same period a year ago, it’s important to remember we’re comparing to 2020’s record-breaking numbers,” said Marvin Jolly, chairman of Texas Realtors. “Across the state, we’re still experiencing strong demand for housing, and buyers are moving to Texas from all over the nation.”

The total number of Texas homes sold dipped to 115,272; the median sales price of $310,000 represents a 16.9 percent increase compared to the third quarter of 2020, according to the report.

However, compared to the third quarter last year, Killeen – Temple MSA home sales increased 11% to 2,586 single-family home sales, while median price increased 19.3% to $235,000, according to Saachi Subramaniam, spokesperson for Texas Realtors.

But even with competitive sales prices, the Killeen area is still suffering from low inventory.

“We have seen a slight increase from our summer months, but are still seeing a tremendous shortage of inventory,” Segarra said.

To put it in perspective, the current inventory of less than one month’s worth of homes for sale; in years past, the Killeen area would have more than six months of inventory, he said.

Housing inventory in Texas decreased to 1.6 months in the third quarter, a decline from 2.3 months in the third quarter of 2020, according to the Texas Realtors report. Data from the Texas Real Estate Research Center at Texas A&M University shows a market balanced between supply and demand has between 6.0 and 6.5 months of inventory.

The median price of homes in Harker Heights is at $289,750, up 23.3 percent over previous years, with an inventory of 0.7 month’s supply, which is down a tenth of a percent from the previous year, according to data from the Fort Hood Area Association of Realtors (FHAAR).

Homes in Killeen have a median price of $198,000, which is up 24.5 percent over the previous year, and with 149 active listings, their inventory of 0.6 of a month’s supply is a tenth higher than the previous year, the data shows.

Overall, Bell County has a median price of $230,000, with 372 active listings—or 0.7 months of inventory, which is two tenths lower than last year, according to FHAAR.

Across Texas, FHAAR shows a median price of $309,700 for homes, which is 16.9 percent higher than last year, and with 57,495 active listings the state has 1.6 months of inventory, which is down six tenths from the previous year.

“Because of the shortage of supply and the continued demand that we see, home prices are still rising,” Segarra said. “We have seen some of the largest home price increases in the shortest time periods, probably in the history of our area.”

One of the largest contributors to the shortage is the lack of scarcity of new construction, Segarra said. Even though builders are working to add new homes to the market, manufacturing delays and increased prices of goods have delayed the production significantly.

As the holiday season approaches, Segarra said he anticipates the sales rates will slow down slightly, but because of the tremendous demand, it may not make a huge difference.

“We may also see more investors who understand the market take advantage of the holiday slow down before it picks up again in the first quarter of 2022,” Segarra said.

The housing frenzy due to the pandemic has possibly peaked, according to Luis Torres, Ph.D., research economist with the Texas Real Estate Research Center at Texas A&M University.

“Home prices and homes sales are beginning to slow. In addition, months of inventory and home listings have reached a trough and are now increasing,” Torres said.

Torres agreed the housing market as the year closes will be characterized by strong demand with low inventories accompanied by strong price growth, albeit at a slower rate.

“Our housing supply remains stretched, but we’re not seeing as many properties with a frenzy of offers above asking price like earlier in the year,” concluded Jolly, chairman of Texas Realtors. “Regardless, buyers in many markets still may find it challenging to get their offers accepted. We encourage anyone looking to buy or sell a home to work with a Texas Realtor to help you navigate the local real estate market.”