T
he Texas housing market is facing a surge in inventory, making it harder for sellers to compete. This is largely due to former Airbnb properties flooding the market after investors bought houses in less popular tourist destinations, only to find they couldn't sell them.

    According to Galveston real estate agent Tom Schwenk, many of these homeowners are now struggling to sell their properties because Galveston isn't a prime destination like the Hamptons. The oversupply has created challenges for sellers and those seeking to rent out homes purchased during the COVID-19 pandemic-era buying frenzy.

    New home listings in Galveston have risen to 828 in the first quarter of 2025, up from just over 500 last quarter. The Greater Houston market has a supply of nearly 33,000 available homes, the highest point since June 2011. However, this oversupply hasn't yet translated into a sharp drop in median home prices across Texas.

    Experts predict that house prices could soon react to the surge in inventory, with some analysts suggesting a 4% drop over the next 12 months. Shae Cottar, regional director for LPT Realty, notes that lower mortgage rates are giving Houston homebuyers optimism, but many are still proceeding with caution due to economic headwinds.

    Jef Conn, chairman of Texas REALTORS, advises sellers to make their homes market-ready and price them well in order to attract an offer. Marco Santarelli, founder of Norada Real Estate Investments, believes the Texas housing market is undergoing a significant correction after a period of unsustainable growth.