For the past decade, Killeen has seen a slow but steady drop in new houses being built inside city limits — from 1,245 in 2006 to 681 in 2016.
The figures show the lowest amount of new housing permits Killeen has issued since 1998, when 674 permits were issued.
Housing inventory — which is defined as how long it would take before all active listings are sold if housing prices remained static — has seen a drop since 2011, falling from 9.1 months of inventory to four months in the Killeen-Temple area, according to the Texas A&M Real Estate Center.
A steady drop in new house inventory might seem like a cause for concern, but Jim Gaines, with the real estate center, said it shouldn’t be.
“Every number I see tells me that the housing market in that area is actually pretty stable right now,” Gaines said. “What you are actually seeing is that a lot of houses are still being built and sold, just not within the city limits. For instance, the number of active listings in Bell County is currently up about 10 percent from this time last year.”
Killeen is now a seller’s market, with the Texas Association of Realtors reporting 3.7 months of housing inventory at a median home price of $117,000. Realtors said that this year more houses are being built outside of the cities, resulting in higher numbers for the counties.
At the end of November, there were 590 active listings in Killeen, down 15.4 percent from almost 700 homes in November 2015, according to the third quarter report. Gaines said proximity to Fort Hood is one likely reason the housing market has remained stable for so long despite a smaller number of houses being built.
“Likely, what you have there are military personnel buying a house, and then selling it again in a year or two when they have to leave,” he said. “So that house is back on the market. ... They don’t really get to take advantage of any value appreciation because the market just doesn’t move that fast.”
Supply and demand determines median home prices for the area, according to Roger Chesser, deputy chief appraiser for Bell County. Military personnel represent one of the biggest markets in the Killeen area, but service members often have to sell and buy without the negotiating that normally goes into the house-shopping process.
“I think anytime you have more affordable housing in the area, (that’s) a good thing, especially if you are a buyer,” Chesser said. “Killeen’s market is not nearly as volatile as people would think with the military presence — it is actually very stable.”
Chesser said that Killeen, lagging behind the rest of Texas in terms of median house prices, is actually in a good spot.
“We haven’t seen any double-digit increases recently like some other areas (such as Austin), but we also didn’t see any double-digit decreases that a lot of areas saw when the housing bubble burst,” he said. “More subdivisions are being built and more homes are going in, and I think that is a very good thing.”
A drop in active listings means the number of single-family residences sold this quarter skyrocketed. There were 155 homes sold in November, up 64.9 percent from about 55 houses sold in November 2015. Gaines said the 64 percent increase is not as dramatic as it appears to be.
“Two things happened this November and last November to make that percentage so high,” he said Dec. 21. “Last November, we know it was a very slow year for that area, having just 55 houses sold, and several pending sales didn’t go through until December. This year we had a spike in sales because many of the pending sales from October went through this month. We don’t know everything that happened this November yet, but we know last November was very slow, so that huge percentage isn’t as amazing as it looks at first glance.”
Overall, Gaines said the Killeen and Bell County housing markets are stable. He again cited the proximity of Fort Hood as a reason for lower housing inventory. He agreed with Chesser that the market is in a good place.
“The price has been very stable in that area lately, which is a good thing,” Gaines said. “The median price is lower than the rest of Texas, as well, so it’s probably a very affordable market, too.”
The median price per square foot in Killeen is $73; the statewide median price is $99.
Texas as a whole is experiencing a slight uptick in median home prices and active listings, with houses statewide being listed about $214,000 this year and with about 103,100 homes actively on the market at the end of November, according to the third quarter report issued by the Fort Hood Area Association of Realtors and the Texas Realtors Association.
“Texas home sales in 2016 continue to edge out last year’s record-breaking sales volume, and, in many local markets, growth is still very strong,” said Leslie Rouda Smith, chairman of the Texas Realtors group.