Aggressive home buying shrinks inventory further while driving the median price to a record high
It’s hard to tell that the spring home buying season has begun because real estate transactions throughout Greater Houston never slowed during the traditionally quieter winter months. The addition of nearly 119,000 jobs over the past 12 months and the resulting need for housing, combined with continued low interest rates, helped make March Houston’s 22nd consecutive month of positive home sales.
According to the latest monthly data prepared by the Houston Association of REALTORS® (HAR), home sales jumped 17.0 percent compared to last March. Housing inventory, which had been at a 13-year low of 3.6 months during the first two months of the year, shrank slightly in March to 3.5 months.
The lower supply of homes and added demand sent prices higher. The median price of a single-family home—the figure at which half the homes sold for more and half for less—rose 6.5 percent to $172,000, an all-time record high for Houston. The average price rose 4.6 percent year-over-year to $236,195, the second highest level ever.
Contracts closed on 5,779 single-family homes. That is the largest one-month sales volume since August 2012. All housing segments experienced gains except for those priced under $80,000. Homes selling between $80,000 and $250,000 registered the greatest sales volume increase.
“REALTORS® continue to see multiple offers on single-family homes and condos throughout the Houston market, which suggests that our local economy is growing stronger by the day,” said HAR Chairman Danny Frank with Prudential Anderson Properties. “Governor Rick Perry recently stated that Texas is the fastest growing state in the country, and most of those people seem to be coming to the Greater Houston area because our job market is better than that of Dallas, Austin and San Antonio.”
In reporting the addition of 118,700 net jobs during the past year, the U.S. Bureau of Labor Statistics ranked Houston No. 1 for job growth among the 20 most populous U.S. cities. The 4.5 percent hiring increase returns Houston to its previous job peak of the fall of 2011.
Foreclosure property sales reported in the HAR Multiple Listing Service (MLS) declined 27.2 percent compared to March 2012. Foreclosures currently make up 12.3 percent of all property sales, down from 15.8 percent one month earlier. The median price of foreclosures climbed 5.8 percent to $86,000.
March sales of all property types in Houston totaled 7,006, a 19.4 percent increase over the same month last year and the largest one-month volume since last August. Total dollar volume for properties sold leapt 23.6 percent to $1.6 billion versus $1.3 billion a year earlier.
March Monthly Market Comparison
March brought positive results to Houston’s overall real estate market when all sales categories are compared to March 2012. On a year-over- year basis, total property sales, total dollar volume and average and median pricing all rose.
Month-end pending sales totaled 4,433. That is up 6.5 percent from last year and portends the likelihood of another month of positive sales when the April figures are tallied. Active listings, or the number of available properties, at the end of March declined 22.1 percent from March 2012 to 32,704.
Housing inventory in Houston held at 3.6 months in January and February, but slipped slightly in March to 3.5 months. That remains the lowest level recorded since 1999. Inventory first fell below a five-month supply in August 2012 and then dropped below a four-month supply last December. The inventory of single-family homes across the United States stands at 4.7 months, according to the latest report from the National Association of REALTORS® (NAR).
Single-Family Homes Update
March sales of single-family homes in Houston totaled 5,779, up 17.0 percent from March 2012. That marks the 22nd straight monthly increase.
Broken out by housing segment, March sales performed as follows:
- $1 – $79,999: decreased 17.1 percent
- $80,000 – $149,999: increased 15.1 percent
- $150,000 – $249,999: increased 23.1 percent
- $250,000 – $499,999: increased 30.7 percent
- $500,000 – $1 million and above: increased 20.5 percent
The median price of a single-family home rose 6.5 percent from last year to $172,000, the highest level ever recorded in Houston. At $236,195, the average sales price for single-family homes achieved the second highest ever, up 4.6 percent year-over-year.
HAR also breaks out the sales performance of existing single-family homes throughout the Houston market. In March 2013, existing home sales totaled 4,915, a 23.3 percent increase from the same month last year. The average sales price rose 4.9 percent year-over-year to $221,714 while the median sales price jumped 10.3 percent to $159,900.
March sales of townhouses and condominiums rocketed 47.1 percent from one year earlier. A total of 550 units sold last month versus 374 properties in March 2012. The average price edged up 2.8 percent to $173,155 while the median price increased 3.0 percent to $139,000. Months inventory was 3.7 months compared to the 6.8 months level it held in March 2012.
Lease Property Update
Houston’s lease property market saw generally positive results in March. Rentals of single-family homes increased 7.8 percent compared to March 2012 and year-over-year townhouse/condominium rentals were flat. The average rent for single-family lease homes was $1,552 while it was $1,393 for townhouses/condominiums – representing increases of 4.3 percent and 5.0 percent respectively.
Houston Real Estate Milestones in March
- Single-family home sales increased 17.0 percent year-over-year, accounting for the market’s 22nd consecutive monthly increase and the largest one-month sales volume since August 2012;
- Total property sales rose 19.4 percent compared to one year earlier and also accounted for the largest one-month sales volume since August 2012;
- Total dollar volume jumped 23.6 percent, increasing from $1.3 billion to $1.6 billion on a year-over-year basis;
- At $172,000, the single-family home median price reached an historic high for Houston;
- At $236,195, the single-family home average price reached the second all-time highest level;
- 3.5 months inventory of single-family homes is the lowest level since 1999 and compares to the national average of 4.7 months;
- Sales of townhouses/condominiums shot up 47.1 percent year-over-year.