HOUSTON REAL ESTATE MID-YEAR UPDATE:
HOME PRICES AND SALES VOLUME SET RECORDS
Housing inventory reaches highest level in nearly five years.
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This month’s Houston real estate sales update is out: We meet the year’s halfway mark with record-breaking numbers for Houston home prices and sales volume.
The trend remains consistent with the strong 2016 closing and first quarter of 2017. The greatest sales gains took place among homes priced from $750,000 and above (categorized as the luxury market), followed by homes in the $150,000 to $249,999 range.
June was the eighth straight month that the luxury segment enjoyed rising sales.
The Houston real estate market held to positive territory for the first half 2017, with single-family home prices and sales both climbing consistently month-over-month. This coincides with the stablizing Houston economy. (See How Rising Interest Rates Impact The Real Estate Market.)
The real estate market’s surge is tied with Houston’s stabilizing energy sector, continued job growth, and a more diversified economy. By numbers:
- Houston job growth: Metro Houston added 45,300 jobs in 12 months ending in May 2017. In the same period last year, Houston only added 4,000 jobs.(1)
- Diversified economy: Five sectors accounted for the bulk of job growth, namely health care, employment services, public education, food and drinking services, fabricated metal products.(1)
- With oil prices hovering in the $45 to $53-per barrel range, the energy sector is slowly gaining stability. Just this week, Halliburton announced hiring at least 100 people per month to meet demand(2). CNBC also reports projections of improving prices for the foreseeable future due to rising demand.(3)
Houston Real Estate Highlights for June 2017
- Single-family home sales rose 8.3 percent year-over-year with 8,414 units sold – the largest one-month sales volume of all time;
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- Total property sales increased 8.3 percent with 9,993 units sold;
- Total dollar volume jumped 10.4 percent to $2.9 billion;
- The single-family home median price rose 2.6 percent to a record high of $239,023;
- The single-family home average price increased 1.5 percent to $304,155, which was also a record high;
- Single-family homes months of inventory grew to a 4.4-months supply, the highest level since October 2012;
- Townhome/condominium sales edged up 1.2 percent, with the average price up 7.6 percent to $215,713 and the median price up 3.6 percent to $171,000;
- Leases of single-family homes jumped 17.4 percent with average rent down 4.0 percent to $1,806;
- Volume of townhome/condominium leases rocketed 21.3 percent with average rent up 2.5 percent to $1,698.
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Houston Real Estate Trends July 2017 Update:
Home Prices and Sales Volume Set Records
Temperatures weren’t the only thing soaring in June, as home prices and sales volume reached new heights, keeping 2017 on track to be a record year for Houston real estate. The greatest sales gains took place among homes priced from $750,000 and above (categorized as the luxury market), followed by homes in the $150,000 to $249,999 range. June was the eighth straight month that the luxury segment enjoyed rising sales.
A total of 8,414 single-family homes sold in June compared to 7,771 a year earlier, according to the latest monthly report produced by the Houston Association of Realtors (HAR). That represents an 8.3 percent increase and marks the largest one-month sales volume in history. On a year-to-date basis, home sales remain ahead of 2016’s volume by 7.4 percent. New listings pushed inventory levels from a 3.9-months supply to 4.4 months, the highest in almost five years.
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A total of 8,414 single-family homes sold in June compared to 7,771 a year earlier, according to the latest monthly report produced by the Houston Association of Realtors (HAR). That represents an 8.3 percent increase and marks the largest one-month sales volume in history. On a year-to-date basis, home sales remain ahead of 2016’s volume by 7.4 percent. New listings pushed inventory levels from a 3.9-months supply to 4.4 months, the highest in almost five years.
“June proved to be another phenomenal month for the Houston real estate market with buyers and renters sending volume and pricing into record territory,” said HAR Chair Cindy Hamann. “Between continued strong employment numbers and healthy housing inventory levels, we expect the market to remain vibrant.”
The single-family home median price (the figure at which half of the homes sold for more and half sold for less) climbed 2.6 percent to $239,023. The average price edged up 1.5 percent to $304,155. Both figures are all-time highs.
June sales of all property types in Houston totaled 9,993, up 8.3 percent from the same month last year. Total dollar volume for properties sold in June rose 10.4 percent to $2.9 billion.
June Monthly Market Comparison
The Houston real estate market saw across-the-board gains during the month of June, with single-family home sales, total property sales, total dollar volume, inventory and pricing all up compared to June 2016.
Month-end pending sales for single-family homes totaled 8,363, up 18.9 percent compared to last year. Total active listings, or the total number of available properties, jumped 16.4 percent from June 2016 to 43,326.
Single-family homes inventory grew from a 3.9-months supply to 4.4 months. For perspective, housing inventory across the U.S. currently stands at a 4.2-months supply, according to the latest report from the National Association of Realtors (NAR).
| CATEGORIES | JUNE 2016 | JUNE 2017 | CHANGE |
| Total property sales | 9,225 | 9,993 | 8.3% |
| Total dollar volume | $2,615,214,802 | $2,887,390,370 | 10.4% |
| Total active listings | 37,230 | 43,326 | 16.4% |
| Single-family home sales | 7,771 | 8,414 | 8.3% |
| Single-family average sales price | $299,761 | $304,155 | 1.5% |
| Single-family median sales price | $233,000 | $239,023 | 2.6% |
| Single-family months inventory* | 3.9 | 4.4 | 0.5 mos. |
| Single-family pending sales | 7,034 | 8,363 | 18.9% |
* Months inventory estimates the number of months it will take to deplete current active inventory based on the prior 12 months sales activity. This figure is representative of the single-family homes market.
Single-Family Homes Update
Single-family home sales totaled 8,414, the greatest one-month volume of all time. That is up 8.3 percent from June 2016, when sales volume was 7,771. The median price rose 2.6 percent to an all-time record high of $239,023. The average price increased 1.5 percent to $304,155, also an historic high.
Days on Market (DOM), or the number of days it took the average home to sell, fell slightly to 50 days versus 53 last year. Inventory rose from a 3.9-months supply to 4.4 months, matching a level last seen in October 2012.
Broken out by housing segment, May sales performed as follows:
- $1 – $99,999: decreased 12.1 percent
- $100,000 – $149,999: decreased 10.7 percent
- $150,000 – $249,999: increased 12.2 percent
- $250,000 – $499,999: increased 11.5 percent
- $500,000 – $749,999: increased 6.9 percent
- $750,000 and above: increased 13.0 percent
HAR also breaks out the sales figures for existing single-family homes. Existing home sales totaled 7,215 in June, up 9.1 percent versus the same month last year. The average sales price increased 3.4 percent to $294,251 while the median sales price rose 3.2 percent to $225,000.
Townhouse/Condominium Update
Townhome and condominium sales increased again in June, edging up 1.2 percent with a total of 678 units sold. The average price rose 7.6 percent to $215,713, while the median price climbed 3.6 percent to $171,000. Inventory grew from a 3.5-months supply to 4.3 months.
Lease Property Update
Houston’s lease market surged further in June, with consumer demand persisting among both single-family and townhome/condominium properties. Single-family home leases jumped 17.4 percent while townhome/condominium leases soared 21.3 percent. The average rent for single-family homes declined 4.0 percent to $1,806, while the average rent for townhomes/condominiums rose 2.5 percent to $1,698.
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