Prices edge upward even as the supply of homes improves
The greater Houston real estate market remained in positive territory in May with a one percent rise in home sales and new record highs for both average and median prices. However, consumers showed waning interest in renting single-family homes and townhomes/condominiums.
According to the latest monthly report from the Houston Association of REALTORS® (HAR), 8,157 single-family homes sold in May versus 8,078 a year earlier. That represents a 1.0 percent increase and marks the second greatest one-month sales volume in history.
Home prices reached the highest levels of all time. The single-family home median price (the figure at which half of the homes sold for more and half sold for less) increased 3.4 percent to $243,000 and the average price edged up 1.3 percent to $305,511, beating the previous record of $305,065 set last month.
For the fourth straight month, the best-performing segment of the market consisted of homes priced in the $500,000 to $749,999 range, which jumped 10.3 percent. The luxury market – those homes priced at $750,000 and above – was unchanged year-over-year.
“We saw textbook seasonality at play across most of Houston in May as the spring homebuying season got underway, and an improving supply of homes definitely helped,” said HAR Chair Kenya Burrell-VanWormer with JPMorgan Chase. “Slower sales among luxury homes should ease pricing pressure going forward which we know would be welcomed news for those concerned about affordability, but for now, Houston remains a seller’s market.”
May sales of all property types totaled 9,721, an increase of 0.6 percent versus the same month last year. Total dollar volume rose 2.0 percent to $2.8 billion.
Lease Property Update
Activity among leased property slowed in May. Single-family home rentals declined 1.8 percent while leases of townhomes and condominiums fell 22.6 percent. The average rent for single-family homes rose 3.7 percent to $1,845 while the average rent for townhomes and condominiums edged up 1.0 percent to $1,580.
May Monthly Market Comparison
Measurements for the Houston real estate market’s May performance were largely positive, with single-family home sales, total property sales, pricing and total dollar volume all up compared to May 2017. Month-end pending sales for single-family homes totaled 8,991, a 12.1 percent increase over last year. Total active listings, or the total number of available properties, fell 1.4 percent to 39,478.
Single-family homes inventory was unchanged year-over-year, maintaining a 4.0-months supply, but is at its highest level since last August when it grew to a 4.3-months supply. For perspective, housing inventory across the U.S. also stands at a 4.0-months supply, according to the latest report from the National Association of REALTORS® (NAR).
Single-Family Homes Update
Single-family home sales rose 1.0 percent in May with 8,157 units sold throughout greater Houston compared to 8,078 a year earlier. That is the greatest one-month sales volume since June 2017 when 8,368 homes sold. On a year-to-date basis, home sales are 3.0 percent ahead of 2017’s record pace.
Prices reached historic highs in May. The median price increased 3.4 percent to $243,000. The average price rose 1.3 percent to $305,511. Days on Market (DOM), or the number of days it took the average home to sell, edged up from 51 to 52 days. Inventory held steady at a 4.0-months supply which is its highest level since August 2017 and is the same as the current national inventory level. Broken out by housing segment, May sales performed as follows:
- $1 – $99,999: decreased 13.8 percent
- $100,000 – $149,999: decreased 21.8 percent
- $150,000 – $249,999: unchanged
- $250,000 – $499,999: increased 6.9 percent
- $500,000 – $749,999: increased 10.3 percent
- $750,000 and above: unchanged
HAR also breaks out the sales figures for existing single-family homes. Existing home sales totaled 6,831 in May, up 1.2 percent versus the same month last year. The average sales price increased 2.8 percent to $297,959 while the median sales price rose 5.2 percent to $231,500.
Townhouse/Condominium Update After its first positive month of the year in April, sales of townhomes and condominiums fell 6.4 percent in May, with a total of 675 units sold versus 721 a year earlier. The average price rose 2.5 percent to $213,912 while the median price increased 3.0 percent to $170,000. Inventory grew slightly to a 4.2-months supply.
Houston Real Estate Highlights in May
- Single-family home sales rose 1.0 percent year-over-year, with 8,157 units sold, the second largest one-month sales volume of all time;
- Days on Market (DOM) for single-family homes increased slightly from 51 to 52 days;
- Total property sales edged up 0.6 percent with 9,721 units sold; Total dollar volume increased 2.0 percent to $2.8 billion;
- The single-family home median price rose 3.4 percent to $243,000, which represents an all-time high;
- The single-family home average price increased 1.3 percent to a record high of $305,511;
- Single-family homes months of inventory was flat at a 4.0-months supply, the highest level since last August and equal to the national inventory level;
- Townhome/condominium sales fell 6.4 percent, with the average price up 2.5 percent to $213,912 and the median price up 3.0 percent to $170,000;
- Leases of single-family homes declined 1.8 percent with the average rent up 3.7 percent to $1,845;
- Volume of townhome/condominium leases dropped 22.6 percent with the average rent up 1.0 percent to $1,580.