Luxury market sees improvement, but inventory overall shrinks
Houston home sales enjoyed their second positive month of the new year, and after three months of declines, stability returned to the luxury market. However, the overall supply of homes across greater Houston shrank slightly in February, narrowing options for house hunters heading into the traditionally active spring home-buying season.
According to the latest monthly report from the Houston Association of REALTORS® (HAR), sales of single-family homes rose 5.3 percent in February, with 5,260 units sold. Homes priced between $500,000 and $750,000 experienced the strongest sales activity.
The single-family home median price (the figure at which half of the homes sold for more and half sold for less) increased 1.4 percent to $226,200 – the highest median ever for a February. The average price eked out a fractional 0.4 percent gain to reach a February high of $281,945.
“February was a positive month overall for Houston real estate, but we really need growth in inventory to ensure that there is a plentiful supply of homes as we enter the spring buying season,” said HAR Chair Kenya Burrell-VanWormer with JP Morgan Chase.
February sales of all property types in Houston totaled 6,375, an increase of 3.1 percent versus the same month last year. Total dollar volume grew 4.5 percent to $1.7 billion.
Lease Property Update
Rental properties drew less interest in February than a year earlier. Single-family home leases and townhome/condominium leases each fell 11.5 percent. The average rent for single-family homes was up 4.1 percent to $1,720 while the average rent for townhomes and condominiums rose 2.2 percent to $1,515.
February Monthly Market Comparison
Most of Houston’s monthly housing market indicators reflected positivity in February, with single-family home sales, total property sales, average and median pricing and total dollar volume all up compared to February 2017. Month-end pending sales for single-family homes totaled 6,912, up 11.1 percent versus last year. Total active listings, or the total number of available properties, however, declined 2.2 percent to 33,939.
Single-family homes inventory shrank to a 3.2-months supply from 3.4 months a year earlier. For perspective, housing inventory across the U.S. currently stands at a 3.4-months supply, according to the latest report from the National Association of REALTORS® (NAR).
Single-Family Homes Update
Single-family home sales rose in February, with 5,260 units sold throughout greater Houston. That is up 5.3 percent from a year earlier when sales volume totaled 4,997. After three consecutive months of declining sales volume, the luxury market – defined as homes priced from $750,000 and up – was flat in February.
The median price reached the highest level ever for a February in Houston, increasing 1.4 percent to $226,200. The average price rose a fractional 0.4 percent, which was sufficient to achieve a February record of $281,945.
Days on Market (DOM), or the number of days it took the average home to sell, decreased slightly from 67 to 65 days. Inventory fell from a 3.4-months supply to a 3.2-months supply year-over-year, its lowest level since December 2017.
Broken out by housing segment, February sales performed as follows:
- $1 – $99,999: decreased 2.8 percent
- $100,000 – $149,999: decreased 11.8 percent
- $150,000 – $249,999: increased 10.9 percent
- $250,000 – $499,999: increased 10.2 percent$
- 500,000 – $749,999: increased
- 18.8 percent*$750,000 and above: unchanged
*best performing segment
HAR also breaks out the sales figures for existing single-family homes. Existing home sales totaled 4,356 in February, up 8.0 percent versus the same month last year. The average sales price increased 1.7 percent to $267,806 while the median sales price rose 5.7 percent to $214,000.
Sales of townhomes and condominiums tumbled 5.1 percent in February, with a total of 466 units sold. The average price rose 2.0 percent to $210,887 while the median price increased 4.6 percent to $170,000. Inventory declined slightly year-over-year from a 3.7-months supply to 3.6 months.
Houston Real Estate Highlights in February
- Single-family home sales rose 5.3 percent year-over-year, with 5,260 units sold;
- Days on Market (DOM) for single-family homes decreased slightly from 67 days in February 2017 to 65 days this February;
- Total property sales increased 3.1 percent with 6,375 units sold;
- Total dollar volume climbed 4.5 percent to $1.7 billion;
- The single-family home median price rose 1.4 percent to $226,200, which represents a February high;
- The single-family home average price edged up 0.4 percent to a February high of $281,945;
- Single-family homes months of inventory shrank year-over-year from a 3.4-months supply to 3.2 months;
- Townhome/condominium sales fell 5.1 percent, with the average price up 2.0 percent to $210,887 and the median price up 4.6 percent to $170,000;
- Leases of single-family homes fell 11.5 percent with the average rent up 4.1 percent to $1,720;
- Volume of townhome/condominium leases dropped 11.5 percent with average rent up 2.2 percent to $1,515.