An upward trend: Study shows killeen real estate market subdued in 2023, but it’s heating back up | Local News
Last year’s real estate market was notably more subdued in the real estate market compared to recent trends — but at the start of 2024, the market appears to be heating up again, experts say.
A recent study by Construction Coverage ranked Killeen 93rd compared to similarly sized real estate markets throughout 2023.
The study compared the median sale price from year to year, the percent of homes that sold above asking price, the median number of days on the market, the average sale-to-list percentage, and the number of listings with price drops.
Their data shows the median home sale price in Killeen was $232,000 — representing a decrease of 1.3 percent from the previous year. The market seemed to favor sellers, the study showed: 23.8 percent of homes sold for more than their asking price after spending just more than 33 days on the market.
“Based on these and other key metrics included in the complete analysis, Killeen’s housing market ranks 93rd out of 122 midsize US cities,” the report stated.
Local expert Michael DeHart with the Fort Hood Area Association of Realtors said this study seems to focus on a specific portion of the construction industry.
“Not all builders list their properties in an MLS,” DeHart said. “In many cases, they have their own market analysis based on their figures.”
Even with the different perspective, DeHart noted similarities between the sales data from the Construction Coverage study.
According to FHAA January reports, closed sales statewide are up 7% over the previous year. In Bell County, the number of closed sales decreased 8% from last year, and in Killeen, the number of closed sales was down about 24% from last year, DeHart said.
“The number of active listings is up, and the amount of available inventory is inching up, but not yet to what would be considered normal levels,” DeHart said. “We’d like to see about 6 months of available inventory, and statewide that number is 3.5 months.”
The trend is consistently stabilizing across Coryell and Lampasas counties as well, DeHart noted: Copperas Cove saw a 17% increase in closed sales over the previous year.
“So, this January ‘trend’ is still as it has been for recent months,” DeHart said. “Closed sales, locally, are down while the number of active listings is up and the amount of inventory is slowly growing.”
There are several contributing factors to the market, DeHart said.
“Access to, and the availability of money is key,” DeHart said. “Interest rates hover around 7% compared to the sub 4% rates of a few years ago. More people are using credit cards to get by and accumulating huge debt that affects their ability to get a mortgage.”
Inflation rates were as high as 7% in 2021 and are now around 3 percent, DeHart said, compared to 1.9% in 2018.
Another contributing factor is production costs which remain high.
“Softwood or framing lumber costs dropped 2.3% in December,” DeHart said. “Gypsum building materials and ready-mix concrete have also seen decreases, but steel has increased by 3%.”
The lack of available inventory, cost of construction, combined with high interest rates yields higher prices for homes, and higher mortgage rates and payments for consumers, DeHart said.
With the increase in active listings, comes a slight decrease in median home prices compared to last year, according to Jose Segarra, owner of Homevets Realty.
“We’re still below our typical balanced market conditions,” Segarra said. “While it’s possible that we’ll continue to see some moderation in the significant home price gains experienced in previous years, in comparison to our usual price increments, we remain on track.”
Segarra said he is pleased the local housing market remains relatively affordable compared to other cities — which attracts buyers.
“Additionally, the proximity to Austin significantly contributes to this hot real estate market because of Austin’s substantially higher home prices, our area becomes an attractive alternative for those looking for more cost-effective housing options,” Segarra said. “When comparing Killeen to other cities of similar size, our affordability stands out. With a sizable veteran population, including active-duty and retired personnel, our market thrives on services tailored to their needs.”
Segarra sees the affordability as a major contributing factor to the housing growth and making Killeen a top choice for buyers.
Deborah Beene of Cloud Real Estate added a broader look at the housing market.
“If you compare the market with 2022, the answer would appear to be that the market is stabilizing,” Beene said. “However, a deeper consideration would be that 2021 and 2022 were an anomaly and cannot be used as a marker in the overall market trends of the real estate industry.”
Since 2022, prices have remained stable while the inventory has risen and days on market have also risen, Beene noted the role interest rates play in driving the market.
“Better markers would be to consider the real estate market in March 2019 as well as the overall economy in 2019 to today’s numbers and statistics,” Beene said.
“Taking out these two years of outliers gives a much more accurate idea of where we have been and where we are going. Given that data our prices continue to increase at a healthy pace.”
Killeen continues to be a great investment community for both homeowners and investors, Beene said.
“Our strong employment base which is ever expanding to include new industries as well as our cost of living, infrastructure and forward thinking by planners are paving the way to continue this positive environment,” Beene said.
“The Killeen market sees ups and downs in the market, but never as drastic as you see at the national or even state level,” DeHart said. “In a market like this it is important to have a licensed Texas realtor helping you with the over 100 critical decision points involved in buying or selling a home.”