Home prices climb to historic highs and inventory levels improve
The Houston housing market has been on a see-saw ride this year, with home sales increasing and declining in alternating months. May marked a downward swing to the tune of 4.3 percent. Homes priced between $250,000 and $500,000 experienced positive sales activity, while homes between $150,000 and $250,000 were flat. Sales volume was down across the lower-priced segments.
According to the latest monthly report prepared by the Houston Association of Realtors (HAR), May single-family home sales totaled 6,807 units compared to 7,110 a year earlier. Months of inventory, the estimated time it would take to deplete the current active housing inventory based on the previous 12 months of sales, increased to a 3.1-months supply versus 2.8 months last May. That is the highest level since October 2013, but still well below the current national supply of 5.3 months of inventory.
Home prices climbed to all-time highs, with the average price of a single-family home up 4.5 percent year-over-year to $292,040. The median price—the figure at which half the homes sold for more and half for less—soared 10.5 percent to $223,000.
May sales of all property types totaled 8,278 units, down 4.2 percent compared to the same month last year. Total dollar volume was flat at $2.2 billion.
“We have had our ups and downs with home sales this year, but HAR predicted declines due to uncertainty about oil as well as tight inventory, so none of this comes as any surprise,” said HAR Chair Nancy Furst with Berkshire Hathaway HomeServices Anderson Properties. “We are on our way to a more normalized housing market after a record-setting 2014, and just like an airplane coming in for a landing, passengers are told to expect the possibility of some dips and bumps on approach.”
MAY MONTHLY MARKET COMPARISON
The Houston housing market had a mixed bag of indicators in the May 2015 versus May 2014 analysis, with single-family home sales and total property sales down, total dollar volume flat, and prices up to the highest levels of all time. Month-end pending sales for single-family homes totaled 8,127, a 3.0 percent decline versus one year earlier.
Houston’s housing inventory expanded in May to a 3.1-months supply versus the 2.8-months supply of one year earlier. That matches the inventory level of October 2013, but is well below the current national supply of homes which stands at a 5.3-months supply, according to the National Association of Realtors.
May single-family home sales totaled 6,807, down 4.3 percent from May 2014. Home prices reached the highest levels of all time in Houston. The single-family average price increased 4.5 percent from last year to $292,040 and the median price climbed 10.5 percent year-over-year to $223,000. The average number of days it took to sell a home, or Days on Market (DOM), was 47 in May, down from the DOM of 50 a year earlier.
Broken out by housing segment, May sales performed as follows:
- $1 – $79,999: decreased 19.4 percent
- $80,000 – $149,999: decreased 27.2 percent
- $150,000 – $249,999: flat
- $250,000 – $499,999: increased 7.6 percent
- $500,000 and above: increased 7.9 percent
HAR also breaks out the sales figures for existing single-family homes. In May, existing home sales totaled 5,860. That is down 6.5 percent from the same month last year. The average sales price rose 4.6 percent year-over-year to $273,945 while the median sales price shot up 10.1 percent to $207,000.
Sales of townhouses and condominiums experienced their first decline since January, falling 6.4 percent. A total of 630 units sold compared to 673 properties in May 2014. The average price, however, rose 3.5 percent to $202,228 and the median price also rose 3.5 percent to $150,000. Inventory grew slightly from a 2.6-months supply to 2.7 months.
LEASE PROPERTY UPDATE
Demand for single-family lease homes declined 6.7 percent in May while the average rent for such properties rose 6.6 percent to $1,843. Townhouse/ condominiums leases were up 3.7 percent in May with their average rent up 6.7 percent to $1,655.
HOUSTON REAL ESTATE MILESTONES IN MAY
- At $292,040, the single-family home average price reached an all-time record high;
- At $223,000, the single-family home median price also achieved an historic high;
- Single-family homes months of inventory edged up to a 3.1-months supply, matching a level last seen in October 2013;
- Days on Market for single-family homes was 47 days versus 50 days a year earlier.