Buyers drive the supply of homes to the lowest level in 12 years
Houston homes continued to sell at an unprecedented pace in November, plunging the supply of available properties to levels last seen 12 years ago. The added demand sent average and median home prices to historic highs for a November in Houston.
According to the latest monthly data prepared by the Houston Association of REALTORS® (HAR), single-family home sales achieved the second highest monthly year-over-year percentage increase of 2012, rising 27.3 percent compared to November 2011. This marks the Houston area’s 18th consecutive month of positive sales. Contracts closed on 4,978 homes, driving inventory down to 4.1 months, a level last observed in December 2000.
All housing segments saw gains in November except for the low end of the market—those homes priced at $80,000 and below. Homes priced from $250,000 through the millions registered the greatest sales volume and accounted for the month’s jump in prices.
“Homes are selling at an unusually hefty pace for this time of year, and that has left fewer properties on the market and driven up prices,” said Wayne A. Stroman, HAR chairman and CEO of Stroman Realty. “With continued local job growth and historically low interest rates, this aggressive home buying trend is likely to continue into the new year. Homebuilders now face the challenge of meeting the demand.”
The single-family home average price jumped 10.5 percent year-over-year to $228,275, the highest level for a November in Houston. The median price—the figure at which half of the homes sold for more and half sold for less—rose 8.1 percent to $167,000, also a record high for a November in Houston.
Foreclosure property sales reported in the HAR Multiple Listing Service (MLS) declined 8.9 percent compared to November 2011. Foreclosures recorded the lowest one-month sales volume of the year in November, making up 15.0 percent of all property sales. This is seen as a likely reflection of the continued slowdown in the sales of homes priced under $80,000. The median price of November foreclosures ticked up 1.0 percent to $81,100.
November sales of all property types in Houston totaled 5,891, a 27.9 percent increase over the same month last year. Total dollar volume for properties sold in November leapt 41.2 percent to $1.3 billion versus $926 million a year earlier.
November Monthly Market Comparison
November brought Houston’s overall real estate market positive results when all sales categories are compared to November 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 November totaled 3,267. That is up 8.4 percent from last year and signals the likelihood of continued gains when December property sales data are totaled. However, it is a significantly smaller increase than last month’s 24.6 percent year-over-year gain in pending sales and suggests an easing in the pace of sales. Active listings, or the number of available properties, at the end of November declined 19.0 percent from November 2011 to 36,539.
Housing inventory in Houston has remained below a five-month supply since August of this year, dropping in November to 4.1 months from 6.2 months a year earlier. That is the lowest level recorded locally since December 2000. By contrast, the highest months inventory in recent history was 8.2 in June 1996. For perspective, the national inventory of single-family homes is 5.4 months, according to the National Association of REALTORSâ (NAR).
Single-Family Homes Update
November sales of single-family homes in Houston totaled 4,978, up 27.3 percent from November 2011. That marks the 18th consecutive monthly increase.
Broken out by housing segment, November sales performed as follows:
- $1 – $79,999: decreased 2.6 percent
- $80,000 – $149,999: increased 17.2 percent
- $150,000 – $249,999: increased 34.0 percent
- $250,000 – $499,999: increased 44.4 percent
- $500,000 – $1 million and above: increased 50.2 percent
The average price of a single-family home rose 10.5 percent from last year to $228,275, the highest level for a November in Houston. At $167,000, the median sales price for single-family homes also achieved a record high for a November in Houston, up 8.1 percent year-over-year.
HAR also breaks out the sales performance of existing single-family homes throughout the Houston market. In November 2012, existing home sales totaled 4,143, a 32.1 percent jump from the same month last year. The average sales price rose 11.7 percent year-over-year to $215,396. The median sales price increased 11.8 percent to $154,000.
November sales of townhouses and condominiums soared 39.6 percent from one year earlier. A total of 441 units sold last month versus 316 properties in November 2011. The average price increased 8.3 percent to $187,500 while the median price declined a fractional 0.4 percent to $135,000. Months inventory dove 36.6 percent year-over-year to 4.7 months compared to 7.4 months in November 2011.
Lease Property Update
Demand was up for Houston’s lease property market in November.Rentals of single-family homes climbed 16.5 percent compared to November 2011, while year-over-year townhouse/condominium rentals rose 18.5 percent. The average rent among single-family lease homes and townhouse/condominiums increased year-over-year but is down from the record levels reached over the summer. The November average rent for a single-family home was $1,517 while the average rent for a townhouse/condominium was $1,397.
Houston Real Estate Milestones in November
- Single-family home sales increased 27.3 percent year-over-year, accounting for the market’s 18th consecutive monthly increase;
- Total dollar volume jumped 41.2 percent, increasing from $926 million to $1.3 billion on a year-over-year basis;
- At $228,275, the single-family home average price reached the highest level for a November in Houston;
- At $167,000, the single-family home median price also reached an historic high for a November in Houston;
- 4.1 months inventory of single-family homes is the lowest level in 12 years (December 2000) and is lower than the national average of 5.4 months;
- Sales of townhouses/condominiums rose 39.6 percent year-over-year;
- Single-family home rentals rose 16.5 percent compared to November 2011 while townhouse/condominium rentals climbed 18.5 percent.