Inventory shrinks slightly and prices climb as the home buying frenzy continues
The fall home buying season began with gusto in Houston as sales and prices did in September what they have done for months – rose. The continued buying frenzy caused housing inventory to shrink very slightly after holding steady at a 3.0-months supply for two consecutive months. And in another scenario that has become all too familiar in this market, prices reached record one-month highs.
According to the latest monthly report prepared by the Houston Association of REALTORS® (HAR), single-family home sales totaled 6,490 units, an increase of 7.0 percent compared to September 2013. Months of inventory, an estimate of the time required to deplete the current active housing inventory based on the previous 12 months of sales activity, dipped to a 2.9-months supply from a 3.2-months supply last September. It remains well below the current national supply of 5.5 months of inventory.
The average price of a single-family home jumped 8.2 percent year-over-year to $269,440. The median price—the figure at which half the homes sold for more and half for less—rose 7.7 percent to $196,000.
September sales of all property types totaled 7,879 units, a 7.0-percent increase compared to the same month last year. Total dollar volume for properties sold soared 15.7 percent to $2 billion versus $1.7 billion a year earlier.
“As long as consumers continue to snap up homes at the current pace, replenishing our housing inventory will be a slow process,” said HAR Chair Chaille Ralph with Heritage Texas Properties. “Rental numbers were strong in September, suggesting that many would-be home buyers are continuing to go the lease route until the market bears the homes they’re looking for at the price point that suits them.”
September Monthly Market Comparison
The Houston housing market experienced across-the-board gains in September, with total property sales, total dollar volume and average and median pricing all up when compared to September 2013.
Month-end pending sales for all property types totaled 4,143. That is up 17.2 percent compared to last year and is considered a bellwether of continued positive sales activity next month. Active listings, or the number of available properties, at the end of September was 28,946 and is 10.8 percent below last year.
Houston’s housing inventory, after holding steady at a 3.0-months supply in July and August, shrank in September to a 2.9-months supply versus 3.2 months a year earlier. That compares to a 5.5-months supply of inventory across the U.S. recently reported by the National Association of REALTORS®.
Single-Family Homes Update
September single-family home sales totaled 6,490, up 7.0 percent from September 2013.
Home prices reached record highs for a September in Houston. The single-family average price increased 8.2 percent from last year to $269,440 and the median price climbed 7.7 percent year-over-year to $196,000. Transactions continued to close at a near-record pace. The number of days a home took to sell, or Days on Market, was 47. In July it reached a record low of 45 days.
Broken out by housing segment, September sales performed as follows:
- $1 – $79,999: decreased 20.7 percent
- $80,000 – $149,999: decreased 8.8 percent
- $150,000 – $249,999: increased 10.2 percent
- $250,000 – $499,999: increased 16.5 percent
- $500,000 – $1 million and above: increased 26.7 percent
HAR also breaks out the sales figures for existing single-family homes. In September, existing home sales totaled 5,715. That is up 10.2 percent from the same month last year. The average sales price increased 6.8 percent year-over-year to $250,966 while the median sales price jumped 7.5 percent to $182,800.
After two months of declines, sales of townhouses and condominiums rose 7.4 percent in September versus one year earlier. A total of 625 units sold last month compared to 582 properties in September 2013. The average price increased 7.5 percent to $195,064 and the median price shot up 10.7 percent to $150,500. Inventory reached to a 2.5-months supply versus a 3.1-months supply a year earlier.
Lease Property Update
Lease properties showed strong demand in September as inventory of for-sale properties remained tight. Single-family home rentals soared 13.2 percent compared to September 2013, while year-over-year townhouse/condominium rentals increased 8.8 percent. The average rent for a single-family home was up 2.7 percent to $1,749 and the average rent for a townhouse/condominium was flat at $1,533.
- Houston Real Estate Milestones in September
- Single-family home sales rose 7.0 percent versus September 2013;
- Total property sales were up 7.0 percent year-over year;
- Total dollar volume increased 15.7 percent, from $1.7 billion to $2 billion on a year-over-year basis;
- At $196,000, the single-family home median price achieved a record high for a September;
- At $269,440, the single-family home average price also reached a September high;
- Days on Market for single-family homes was 47, slightly above July’s record low of 45 days;
Rentals of single-family homes shot up 13.2 percent year-over-year and the cost of renting those homes increased 2.7 percent to $1,749.
- Townhouse/condominium rentals rose 8.8 percent, with rents flat at $1,533.