After performing largely on a par with the record 2014 sales year, the Houston real estate market lost momentum in October as the downturn in the oil industry coupled with the traditional fall season slowdown sent sales into a double-digit decline.
According to the latest monthly report prepared by the Houston Association of REALTORS® (HAR), October single-family home sales dropped 10.2 percent with a total of 5,873 sales compared to 6,541 a year earlier. That marks the fifth time this year that sales have fallen.
Declining sales affected homes in all pricing segments. Among those homes that did sell in October, Days on Market (DOM), or the number of days it took for the average home to sell, edged up to 53 days versus 51 in 2014.
Slower sales helped boost months of inventory, the estimated time it would take to deplete the current active housing inventory based on sales over the previous 12 months. It rose from a 2.8-months supply last October to a 3.5-months supply. Inventory has now held at a 3.5-months supply for the past four months, but remains below the current national housing supply of 4.8 months of inventory.
Home prices climbed to the highest levels ever for an October, with the average price of a single-family home up 3.7 percent year-over-year to $271,648. The median price—the figure at which half the homes sold for more and half for less—jumped 6.6 percent to $205,000.
Sales of all property types totaled 7,026 units, down 11.9 percent compared to last October. Total dollar volume fell 8.3 percent to $1.8 billion.
“At the beginning of the year, we discussed how Houston home sales would normalize by the end of 2015, and after an impressive run that rivaled last year’s record levels, it looks like the forecast is coming true in the fourth quarter,” said HAR Chair Nancy Furst with Berkshire Hathaway HomeServices Anderson Properties.
October Monthly Market Comparison
The Houston housing market showed declines in a majority of measurements in the October 2015 versus 2014 analysis, with single-family home sales, total property sales and total dollar volume all down, while prices climbed to record highs for an October.
Month-end pending sales for single-family homes totaled 6,374, a 2.7 percent drop from a year earlier, which suggests that slower sales may extend into November. Active listings, or the number of available properties, at the end of October rose 18.9 percent to 33,692.
Houston’s housing inventory has held at a 3.5-months supply since July of this year, up from the 2.8-months supply recorded in October 2014. That level still remains below the current 4.8-months national supply of homes reported by the National Association of REALTORS® (NAR).
Single-Family Homes Update
Single-family home sales totaled 5,873 in October, down 10.2 percent from October 2014. That marks the fifth and steepest sales decline of the year. Nonetheless, home prices achieved the highest levels ever for an October in Houston. The single-family average price rose 3.7 percent from last year to $271,648 while the median price jumped 6.6 percent year-over-year to $205,000.
The average number of days it took to sell a home, or DOM, was 53 in October versus 51 days a year earlier.
For perspective, single-family home sales tracked on a year-to-date basis were down 1.0 percent in October at 63,175.
Broken out by housing segment, October sales performed as follows:
- $1 – $79,999: decreased 27.2 percent
- $80,000 – $149,999: decreased 24.9 percent
- $150,000 – $249,999: decreased 5.6 percent
- $250,000 – $499,999: decreased 3.4 percent
- $500,000 and above: decreased 10.4 percent
HAR also breaks out the sales figures for existing single-family homes. Existing home sales totaled 5,074 in October, down 9.1 percent versus the same month last year. The average sales price rose 6.0 percent year-over-year to $254,686 while the median sales price climbed 6.5 percent to $189,500.
Sales of townhouses and condominiums tumbled 17.3 percent in October. A total of 508 units sold compared to 614 properties in October 2014. The average price remained unchanged at $196,242 and the median price slipped 1.0 percent to $146,500. Inventory grew from a 2.5-months supply to 3.2 months.
Lease Property Update
Demand for single-family lease homes rose 4.1 percent in October, while townhomes/condominiums saw demand jump 12.4 percent. The average rent for single-family homes was flat at $1,708, while the average rent for townhomes/condominiums dropped 5.0 percent to $1,510.
Houston Real Estate Highlights in October
- Single-family home sales fell 10.2 percent compared to October 2014, marking the fifth and steepest decline of 2015;
- Total property sales dropped 12.1 percent (7,026 units);\Total dollar volume decreased 8.3 percent to $1.8 billion;
- At $271,648, the single-family home average price reached a record high for an October;
- At $205,000, the single-family home median price also achieved a record October high;
- Single-family homes months of inventory climbed to a 3.5-months supply versus 2.8 months a year earlier;
- Townhomes/condominium sales dropped 17.3 percent with the average price flat at $196,242 and the median price down 1.0 percent to $146,500;
- Leases of single-family homes rose 4.1 percent with rents remaining unchanged at $1,708;
- Leases of townhomes/condominiums jumped 12.4 percent with rents sliding 5.0 percent to $1,510.