Houston Real Estate Update: July 2015 – Market Bounces Back
Sales rise, prices reach new historic highs, and inventory continues to grow.
THE HOUSTON HOUSING MARKET FLEXES ITS MUSCLE IN JUNE
The following is the most recent Houston MLS Report, published by the Houston Association of Realtors. The data covers Houston homes for sale and real estate trends from the last twelve months (June 2014 – June 2015).
June Houston Real Estate Milestones:
- Single-family home sales rose 4.1 percent versus June 2014;
- Total property sales were up 3.3 percent year-over-year to a record 9,480 units;
- Total dollar volume increased 9.5 percent to $2.7 billion;
- At $302,942, the single-family home average price reached an all-time record high;
- At $225,000, the single-family home median price also achieved an historic high;
- Single-family homes months of inventory edged up to a 3.2-months supply, matching a level not seen since September 2013;
- Days on Market for single-family homes fell to a record low 43 days versus 47 days a year earlier.
- Townhome/condominium sales rose 6.7 percent;
- Single family home leases were up 4.6 percent while townhome/condominium leases rose 5.1 percent with average rents up year-over-year.
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Houston Real Estate Updates In June
The Houston real estate market’s see-saw ride continued following May’s sales dip, with June sales volume up 4.1 percent and home prices setting new record highs. Only homes priced below $150,000 experienced a sales decline.
According to the latest monthly report prepared by the Houston Association of Realtors (HAR), June single-family home sales totaled 7,935 units—the highest one-month volume ever— compared to 7,621 a year earlier. The time it took to sell the average home reached a record low of 43 days.
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 3.2-months supply versus 2.9 months last June. That is the greatest supply since September 2013, but remains well below the current national supply of 5.1 months of inventory.
Home prices achieved historic highs, with the average price of a single-family home up 6.6 percent year-over-year to $302,942. The median price—the figure at which half the homes sold for more and half for less—rose 4.9 percent to $225,000.
June sales of all property types amounted to a record-setting 9,480 units, an increase of 3.3 percent versus the same month last year. Total dollar volume rose 9.5 percent to $2.7 billion.
“I think it speaks very well for the health of our real estate market when you have a month in which sales are up, rentals are up, inventory is growing, and you’re comparing it all to the record year of 2014,” said HAR Chair Nancy Furst with Berkshire Hathaway HomeServices Anderson Properties. “We still expect normalization in the marketplace later this year, and that may well mean these alternating up and down sales months, but the bottom line appears to be that there is no lack of interest in housing in Houston, Texas.”
June Monthly Market Comparison
The Houston housing market enjoyed across-the-board gains in the June 2015 versus June 2014 analysis, with single-family home sales, total property sales, and total dollar volume all up, and prices reaching the highest levels of all time. Month-end pending sales for single-family homes totaled 8,063, a 10.0 percent increase compared to a year earlier.
Houston’s housing inventory expanded in June to a 3.2-months supply versus the 2.9-months supply of one year earlier. That matches the inventory level of September 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.
|CATEGORIES||JUNE 2014||JUNE 2015||CHANGE|
|Total property sales||9,177||9,480||3.3%|
|Total dollar volume||$2,477,752,487||$2,712,021,860||9.5%|
|Total active listings||29,513||31,963||8.3%|
|Single-family home sales||7,621||7,935||4.1%|
|Single-family average sales price||$284,289||$302,942||6.6%|
|Single-family median sales price||$214,500||$225,000||4.9%|
|Single-family months inventory*||2.9||3.2||10.9%|
|Single-family pending sales**||7,331||8,063||10.0%|
* Months inventory estimates the number of months it will take to deplete current active inventory based on the prior 12 months sales activity. This figure is representative of the single-family homes market.
** Effective May 2015, in an effort to be consistent with industry standards, the Houston MLS is now including all categories of pending sales in its reporting. Previously, the Houston MLS did not include “option pending” and “pending continue to show” listings in its reporting of pending sales. The new methodology is now all-inclusive for listings that went under contract during the month.
Single-Family Homes Update
Single-family home sales totaled 7,935 in June, up 4.1 percent from June 2014. Home prices reached the highest levels of all time in Houston. The single-family average price jumped 6.6 percent from last year to $302,942 and the median price climbed 4.9 percent year-over-year to $225,000. The average number of days it took to sell a home, or Days on Market (DOM), reached a record low of 43 in June, down from the DOM of 47 a year earlier.
Single-family home sales tracked on a year-to-date basis were flat in June at 35,632.
Broken out by housing segment, June sales performed as follows:
- $1 – $79,999: decreased 23.0 percent
- $80,000 – $149,999: decreased 16.7 percent
- $150,000 – $249,999: increased 16.8 percent
- $250,000 – $499,999: increased 10.6 percent
- $500,000 and above: increased 14.9 percent
HAR also breaks out the sales figures for existing single-family homes. Existing home sales totaled 6,887 in June. That is a 5.1 percent increase over the same month last year. The average sales price rose 6.5 percent year-over-year to $286,441 while the median sales price gained 7.1 percent to $210,000.
After suffering their first decline of the year in May, sales of townhouses and condominiums rose 6.7 percent in June. A total of 721 units sold compared to 676 properties in June 2014. The average price, however, dipped 2.5 percent to $201,557 while the median price increased 4.9 percent to $161,000. Inventory grew slightly from a 2.6-months supply to 2.7 months.
Lease Property Update
Demand for single-family lease homes was on the rise in June to the tune of 4.6 percent. The average rent for such properties climbed 4.2 percent to $1,875. Townhouse/condominiums leases were up 5.1 percent in June with their average rent climbing 8.6 percent to $1,759.
The computerized Multiple Listing Service of the Houston Association of REALTORS® includes residential properties and new homes listed by 25,000 REALTORS® throughout Harris, Fort Bend and Montgomery counties, as well as parts of Brazoria, Galveston, Waller and Wharton counties. Residential home sales statistics as well as listing information for more than 50,000 properties may be found on the Internet at http://www.har.com.
The information published and disseminated to the HAR Multiple Listing Services is communicated verbatim, without change by Multiple Listing Services, as filed by MLS participants.
The MLS does not verify the information provided and disclaims any responsibility for its accuracy. All data is preliminary and subject to change. Monthly sales figures reported since November 1998 includes a statistical estimation to account for late entries. Twelve-month totals may vary from actual end-of-year figures. (Single-family detached homes were broken out separately in monthly figures beginning February 1988.)
Founded in 1918, the Houston Association of REALTORS® (HAR) is a 26,000-member organization of real estate professionals engaged in every aspect of the industry, including residential and commercial sales and leasing, appraisal, property management and counseling. It is the largest individual dues-paying membership trade association in Houston as well as the second largest local association/board of REALTORS® in the United States.