Houston Real Estate Update: May 2014 – Home Prices Reach Record Highs
Low housing inventory ends 34 consecutive months of positive sales
HOUSTON HOME PRICES REACH RECORD HIGHS DESPITE FLAT SALES
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 (April 2013 – April 2014).
Houston Real Estate Milestones from April:
- Single-family home sales were statistically flat year-over-year, marking an end to the market’s record 34 consecutive months of positive sales;
- Total property sales were also statistically flat compared to one year earlier;
- Total dollar volume increased 6.6 percent, from $1.8 billion to $2 billion on a year-over-year basis;
- At $195,000, the single-family home median price achieved a new record high for Houston;
- At $270,505, the single-family home average price also reached an all-time high;
- A 2.6-month supply of inventory of single-family homes is unchanged from December 2013, but down from a 3.4-month supply in April 2013, while comparing to the national average of 5.2 months;
- Rentals of single-family homes were up 10.9 percent while rentals of townhouses/condominiums rose 7.8 percent.
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Houston Real Estate Updates in March
Houston’s 34-month positive sales streak came to an end in April, reflecting the extremely tight supply of available housing. Despite the unchanged year-over-year sales volume, homes that did sell pushed pricing to the highest level of all time.
According to the latest monthly report prepared by the Houston Association of Realtors (HAR), home sales were unchanged from a year earlier, with April single-family home sales totaling 6,438. That is the largest one-month sales volume recorded since last August.
The supply of homes has remained at 2.6 months of inventory since December. However, it is down from the 3.4-month supply in April 2013 and markedly lower than the national supply of 5.2 months of inventory.
The average price of a single-family home increased 7.0 percent year-over-year to $270,505. The median price—the figure at which half the homes sold for more and half for less—rose 5.4 percent to $195,000. Both pricing figures represent record highs for Houston.
Single-family homes priced from $250,000 through the millions saw the greatest sales activity and accounted for the latest jump in prices. Homes priced at $150,000 and below experienced declines.
“It doesn’t come as a huge surprise that April sales were flat given our depleted housing inventory and the fact that sales last year at this time were virtually off the chart,” said HAR Chair Chaille Ralph with Heritage Texas Properties. “We also believe consumers may be waiting for more homes to hit the market in the price range they can afford before taking action. Many continue to rent in the interim, as reflected in our April report showing a further increase in single-family and townhome/condominium rentals.”
Foreclosure property sales reported in the HAR Multiple Listing Service (MLS) declined again, falling 43.7 percent compared to April 2013. Foreclosures now comprise 6.1 percent of all property sales, down from a 10.4 percent share a year earlier. The median price of foreclosures rose 8.5 percent to $90,084.
April sales of all property types totaled 7,857, statistically flat compared to the same month last year. Total dollar volume for properties sold rose 6.6 percent to $2 billion versus $1.8 billion a year earlier.
April Monthly Market Comparison
Despite no gains in total property sales for the month, total dollar volume and average and median pricing rose when compared to April 2013.
Month-end pending sales totaled 4,806, a 3.9 percent decline versus last year, which might suggest an environment of slower sales until inventory levels pick up. Active listings, or the number of available properties, at the end of April tumbled 13.5 percent to 28,114.
Houston’s housing inventory has held steady at a 2.6-month supply since December 2013, but is down from the 3.4 months of supply one year ago. The inventory of single-family homes across the U.S. currently stands at 5.2 months, according to the latest report from the National Association of Realtors.
|CATEGORIES||April 2013||April 2014||CHANGE|
|Total property sales||7,806||7,857||0.7%|
|Total dollar volume||$1,872,367,656||$1,996,240,808||6.6%|
|Total active listings||32,498||28,114||-13.5%|
|Total pending sales||4,999||4,806||-3.9%|
|Single-family home sales||6,419||6,438||0.3%|
|Single-family average sales price||$252,725||$270,505||7.0%|
|Single-family median sales price||$185,000||$195,000||5.4%|
|Single-family months inventory*||3.4||2.6||-21.9%|
* 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.
Single-Family Homes Update
April sales of single-family homes in Houston totaled 6,438. That is statistically unchanged from April 2013 and effectively ends the market’s record run of 34 consecutive months of increased sales. It also represents the greatest one-month sales volume since August 2013.
Home prices reached the highest levels of all time in Houston. The single-family median price climbed 5.4 percent from last year to $195,000 and the average price jumped 7.0 percent year-over-year to $270,505.
Broken out by housing segment, April sales performed as follows:
- $1 – $79,999: decreased 33.4 percent
- $80,000 – $149,999: decreased 6.3 percent
- $150,000 – $249,999: increased 7.0 percent
- $250,000 – $499,999: increased 7.7 percent
- $500,000 – $1 million and above: increased 6.0 percent
HAR also breaks out the sales performance of existing single-family homes for the Houston market. In April 2014, existing home sales totaled 5,564, a 1.7 percent increase from the same month last year. The average sales price rose 4.7 percent year-over-year to $252,497 while the median sales price increased 6.7 percent to $180,000.
Townhouse and condominium sales in April increased 3.2 percent from one year earlier. A total of 619 units sold last month compared to 600 properties in April 2013. The average price rose 9.2 percent to $209,434 and the median price increased 14.0 percent to $159,000. Inventory slid to a 2.7 months supply versus a 3.6 months supply in April 2013.
Lease Property Update
Houston’s lease property market showed continued strength in April, buoyed by the diminished supply of for-sale properties. Single-family home rentals rose 10.9 percent compared to April 2013 while year-over-year townhouse/condominium rentals climbed 7.8 percent. The average rent for a single-family home increased 4.1 percent to $1,667 and the average rent for a townhouse/condominium rose 5.1 percent to $1,477.
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.