Homes in Smith County are pictured

A low inventory of homes for sale didn’t stop the Tyler area’s 2021 real estate market from outpacing the previous year.

The five counties in the Greater Tyler Area Association of Realtors’ Multiple Listing Service saw about $1.67 billion in homes sales in 2021, up $280 million from 2020. The number of home sales increased to 6,091 from 5,730, with an average price of $294,377 – almost $40,000 more than in 2020.

Those increases occurred in a market that saw 1,080 homes listed for the year, down from 1,619 in 2020.

“Even with low inventory from the year before, we still have drastically more home sales than the previous year,” said John Wampler, one of the founders of Realty ONE Group Rose in Tyler. He’s this year’s chairman of the Greater Tyler Association of Realtors.

“What we’re fighting with right now is very low inventory,” he said, explaining that a healthy market would typically have around 8 months of housing inventory for sale. The market is averaging 2.3 months of supply, he said.

“Right now people are not wanting to sell because they don’t know where to go,” he said.

RELATED: Using data from the U.S. Census Bureau, this study showed Tyler ranks among the destinations for residents leaving Austin for good.

Those themes are reflected in the housing market statewide, according to a recent report available from the Texas A&M Real Estate Research Center.

“Elevated demand persisted as homes averaged roughly one month on the market,” the report says. “On the supply side, single-family housing permits increased for the second consecutive month, but housing starts declined as lumber and other input material prices rose. The relatively low level of inventory available for sale is the greatest challenge to Texas’ housing market. The state’s diverse and expanding economy, favorable business policies, and steady population growth, however, support a favorable outlook.”

Wampler said there are “so many cash buyers coming in from out of state,” with buyers jumping on properties as soon as they’re listed.

“We’re very blessed to be in the area we’re in,” he said of the out of state interest. “We’re close to all the major cities. We have great health care and great schools. At the same time, we have a lower cost of living than the major cities.”

While the average home price is up to almost $300,000, the prices are better than in California or major Texas cities, he said.RELATED: Smith County ranks as one of the fastest growing counties in Texas

“You can still strike a bargain here,” Wampler said “People are just looking for that quality of life before COVID hit.”

Bryan Robinson, senior vice president and director of mortgage lending for Texas Bank and Trust, said low interest rates in 2021 were “very consumer friendly” and helped balance increasing home prices.

The increasing prices, low inventory and higher construction costs for new homes were low spots in the East Texas market.

“”Appraisal turn times were slow due to high volume of requests and a shortage of appraisers,” he said.

Interest rates will likely rise this year.

“We’ve already seen the 30-year rate move up about a half of a percent since mid-December,” Robinson said. “I think it is realistic to see rates at 4% in the third quarter, at the latest, which is still very low by historical standards.”

A challenge facing the real estate market is inflation. Personal incomes aren’t growing at the same rate as increasing mortgage rates and appreciation in home prices, he said.

“Now, add in inflation, at levels which haven’t been seen since the early ‘80s, to that mix and it does have a negative effect on borrowers,” Robinson said. “This impacts lower income borrowers the most.”

Still he expects the strong market to continue this year.

“We should still see an active housing market with plenty of demand, continued low inventory, and attractive interest rates,” he said.

Wampler agreed, noting the large pool of buyers and cash coming into the market.

“We’re going to see a mirror of last year, this year,” he said. “We’re just fighting inventory.”