Average price sees its first decline in nearly four years
The onset of the holiday shopping season and continued strains within the energy industry weighed on Houston’s housing market in November. Home sales fell for the second consecutive month and dragged average price down with them, marking the first price decline since February 2012.
According to the latest monthly report prepared by the Houston Association of REALTORS® (HAR), November single-family home sales slid 10.5 percent with a total of 4,595 sales compared to 5,135 a year earlier. Only homes in the $150,000 to $250,000 price segment experienced positive sales volume. That, coupled with a 22 percent drop in luxury home sales, accounted for the decline in average price. Among homes that did sell in November, Days on Market (DOM), or the number of days it took the average home to sell, edged up to 55 days versus 54 in 2014.
Slower sales allowed for a slight improvement in months of inventory, the estimated time it would take to empty out current active housing inventory based on sales over the previous 12 months. It grew from a 2.7-months supply last November to a 3.4-months supply. Inventory has held at about a 3.5-months supply for the past five months and remains below the current national housing supply of 4.8 months of inventory.
While the average price of a single-family home fell 3.5-percent year-over-year to $262,064, the median price—the figure at which half the homes sold for more and half for less— reached the highest level ever for a November, rising 2.2 percent to $200,000.
Sales of all property types totaled 5,623 units, down 10.1 percent compared to last November. Total dollar volume fell 13.5 percent to $1.4 billion.
“The Houston housing market saw further correction in November and will likely exit the year with exactly the declines that were forecast coming off record-setting sales in 2014 and an environment of limited inventory and plunging oil prices,” said HAR Chair Nancy Furst with Berkshire Hathaway HomeServices Anderson Properties.
November Monthly Market Comparison
The Houston housing market saw declines in most measurements in the November 2015 versus 2014 analysis, with single-family home sales, total property sales and total dollar volume all down along with single-family home average price, while median price of a single-family home climbed to a record high for a November.
Month-end pending sales for single-family homes totaled 5,617, a 6.3 percent drop from a year earlier, which is an indication that sales will likely remain in negative territory when the December numbers are tallied. Active listings, or the number of available properties, at the end of November rose 21.5 percent to 33,272.
Houston’s housing inventory has held at about a 3.5-months supply since July of this year, up from the 2.7-months supply recorded in November 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 4,595 in November, down 10.5 percent from November 2014. That marks the second straight monthly decline, although there have been a total of six months of negative sales for all of 2015.
The average price fell for the first time since February 2012, declining 3.5 percent to $262,064. However, the median price achieved the highest level ever for a November in Houston, rising 2.2 percent year-over-year to $200,000. The average number of days it took to sell a home, or DOM, was 55 in November versus 54 days a year earlier.
For perspective, single-family home sales tracked on a year-to-date basis were down 1.8 percent at 67,771.
Broken out by housing segment, November sales performed as follows:
- $1 – $79,999: decreased 28.6 percent
- $80,000 – $149,999: decreased 21.0 percent
- $150,000 – $249,999: increased 5.7 percent
- $250,000 – $499,999: decreased 9.1 percent
- $500,000 and above: decreased 22.0 percent
HAR also breaks out the sales figures for existing single-family homes. Existing home sales totaled 3,927 in November, down 7.6 percent versus the same month last year. The average sales price fell 3.8 percent year-over-year to $241,718 while the median sales price climbed 3.5 percent to $186,000.
Sales of townhouses and condominiums tumbled 10.3 percent in November. A total of 425 units sold compared to 474 properties in November 2014. The average price dropped 9.3 percent to $183,884 and the median price fell 15.2 percent to $130,000. Inventory grew from a 2.4-months supply to 3.2 months.
Lease Property Update
Demand for single-family lease homes rose 7.5 percent in November while townhomes/condominiums saw demand jump 8.1 percent. The average rent for single-family homes edged up 1.9 percent to $1,707 while the average rent for townhomes/condominiums was unchanged at $1,527.
Houston Real Estate Highlights in November
- Single-family home sales fell 10.5 percent compared to November 2014, marking the second consecutive monthly decline and sixth month of negative sales volume for all of 2015;
- Total property sales dropped 10.1 percent (5,623 units);
- Total dollar volume decreased 13.5 percent to $1.4 billion;
- At $262,064, the single-family home average price saw its first decline since February 2012;
- At $200,000, the single-family home median price achieved a November high;
- Single-family homes months of inventory climbed to a 3.4-months supply versus 2.7 months a year earlier;
- Townhomes/condominium sales dropped 10.3 percent with the average price down 9.3 percent to $183,884 and the median price down 15.2 percent to $130,000;
- Leases of single-family homes rose 7.5 percent with rents up 1.9 percent to at $1,707;
- Leases of townhomes/condominiums jumped 8.1 percent with rents flat $1,527.