Home buyers continued to deplete inventory in September, pushing prices up further
Houston-area property sales have now held firmly to positive territory for 16 straight months, and September’s flurry of home buying caused a further drawdown of inventory and hike in prices.While monthly sales volume eased a bit compared to August, there was enough activity to lower available housing inventory to levels not seen since March 2002.
According to the latest monthly data prepared by the Houston Association of REALTORS® (HAR), single-family home sales rose 8.7 percent compared to September 2011. Contracts closed on 5,014 homes in September, driving inventory down to 4.7 months. Only the low end of the housing market experienced a drop in sales.
“Demand for homes throughout Houston continues to outpace supply as we transition into the fall season,” said Wayne A. Stroman, HAR chairman and CEO of Stroman Realty. “Home sales traditionally begin to taper off this time of year, so we are not worried about inventory declining to unhealthy levels. For those considering selling a home, current market conditions present excellent opportunities, and with interest rates falling to new record lows, this also remains an outstanding time to buy.”
The single-family home average price increased 4.7 percent year-over-year to $220,992, the highest level for a September in Houston. The median price—the figure at which half of the homes sold for more and half sold for less—climbed 6.1 percent to $165,000, also a record high for a September in Houston.
Foreclosure property sales reported in the Multiple Listing Service (MLS) declined 12.5 percent compared to September 2011. Foreclosures made up 16.1 percent of all property sales, the lowest one-month sales volume all year and a likely reflection of the sales decline among homes priced at $80,000 and below. The median price of September foreclosures was flat at $82,000.
September sales of all property types in Houston totaled 5,943, an 8.7 percent increase compared to September 2011. Total dollar volume for properties sold during the month increased 13.9 percent to $1.2 billion versus $1.1 billion a year earlier.
September Monthly Market Comparison
September brought Houston’s overall housing market positive results when all sales categories are compared to September 2011. On a year-over-year basis, total property sales, total dollar volume and average and median pricing all rose.
Month-end pending sales for September totaled 3,483. That is up 11.6 percent from last year and portends another positive month when the October property sales data are totaled. Active listings, or the number of available properties, at the end of September declined 17.8 percent from September 2011 to 39,319.
The inventory of single-family homes is now below five months, dropping from 6.8 months a year ago to 4.7 months, a level the Houston market last observed in March 2002. Last month, HAR reported that the August months inventory stood at 4.9, however that has been revised to 5.0. Housing inventory has remained below a six-month supply since December 2011. For perspective, the national inventory of single-family homes is 6.1 months, according to the National Association of REALTORS® (NAR). A supply of less than six months is traditionally defined as a “seller’s market,” however buyers have been enjoying the benefits of historically low mortgage interest rates.
Single-Family Homes Update
September sales of single-family homes in Houston totaled 5,014, up 8.7 percent from September 2011. That marks the 16th straight monthly increase and represents the longest stretch of positive sales since a 37-month run ended in February 2007, before the recession.
Broken out by housing segment, September sales saw gains everywhere but the low end:
- $1 – $79,999: declined 6.0 percent
- $80,000 – $149,999: increased 3.9 percent
- $150,000 – $249,999: increased 13.3 percent
- $250,000 – $499,999: increased 16.5 percent
- $500,000 – $1 million and above: increased 18.2 percent
The average price of a single-family home rose 4.7 percent from last year to $220,992, the highest level for a September in Houston. The highest and second highest average prices of all time were recorded in May and June of this year, respectively. At $165,000, the median sales price for single-family homes also achieved a record high for a September in Houston, up 6.1 percent year-over-year.
HAR also breaks out the sales performance of existing single-family homes throughout the Houston market. In September 2012, existing home sales totaled 4,330, a 14.0 percent increase from the same month last year. The average sales price rose 4.1 percent year-over-year to $208,597. The median sales price increased 7.2 percent to $154,300. Existing homes achieved all-time high prices in June of this year ($226,301 average and $161,500 median).
September sales of townhouses and condominiums climbed 4.4 percent from one year earlier. A total of 404 units sold last month versus 387 properties in September 2011. The average price rose 11.2 percent to $170,920 while the median price soared 19.0 percent to $139,250. Months inventory dropped 32.7 percent year-over-year to 5.4 months compared to 8.0 months in September 2011.
Lease Property Update
Houston’s lease property market had a mixed performance in September. Rentals of single-family homes rose 3.6 percent compared to September 2011, while year-over-year townhouse/condominium rentals declined 5.5 percent. The average rent among single-family lease homes and townhouse/condominiums retreated slightly from the record levels of July. The September average rent for a single-family home was $1,583, down from July’s record rate, while the average rent for a townhouse/condominium hit an all-time high in September of $1,387.
Houston Real Estate Milestones in September
- Single-family home sales rose 8.7 percent year-over-year, accounting for the market’s 16th consecutive monthly increase;
- At $220,992, the single-family home average price reached the highest level for a September in Houston;
- At $165,000, the single-family home median price also reached an historic high for a September in Houston;
- 4.7 months inventory of single-family homes is the lowest level in more than 10 years (March 2002) and is lower than the national average of 6.1 months;
- Sales of townhouses/condominiums climbed 4.4 percent year-over-year;
- Single-family home rentals rose 3.6 percent compared to September 2011;
- The average rent for a townhouse/condominium hit an all-time high of $1,387.