HOUSTON — (September 9, 2020) — Following a July that vaulted Houston real estate into the record books, August proved to be another healthy month for home sales despite the lingering coronavirus pandemic. The high end of the market staged the strongest performance, pulling up overall pricing along the way. However, with a decline in the number of listings for sale coming on the market, inventory has now fallen to its lowest level in five years, setting the stage for moderating sales in the weeks ahead despite historically low interest rates.
According to the latest Houston Association of Realtors (HAR) Market Update, 9,195 single-family homes sold in August compared to 8,673 a year earlier. That accounted for a 6.0 percent increase and marked the third consecutive month of positive sales.
Homes priced at $750,000 and above registered the greatest percentage increase, soaring 40.3 percent compared to August 2019. In second place was the $500,000 to $750,000 housing segment, which jumped 34.4 percent year-over-year. Homes between $250,000 and $500,000 — the market’s highest volume sales range – also achieved significant increases over 2019.
The single-family home median price climbed 7.6 percent to $269,000 while the average price rose 7.8 percent to $334,256. Both figures are record highs for an August. Year-to-date sales are running 2.8 percent ahead of 2019’s record pace.
Sales of all property types totaled 11,121 – up 7.3 percent from August 2019. Total dollar volume for the month increased 13.4 percent to $3.5 billion. After strong consumer interest in July, the lease market retreated in August, with declines in both the single-family and townhouse/condo markets.
“August was the third straight positive month for Houston real estate, but with a dwindling supply of homes entering the market, we expect sales volume to resume a more normalized pace for this time of year,” said HAR Chairman John Nugent with RE/MAX Space Center. “Consumers can still benefit from record low interest rates, however constrained inventory doesn’t offer them many housing options, which is unfortunate.”
Lease Property Update
Houston’s lease property market slowed in August. Leases of single-family homes fell 13.3 percent year-over-year while leases of townhomes and condominiums declined 13.7 percent. The average rent for single-family homes increased 2.3 percent to $1,961 while the average rent for townhomes and condominiums edged up 1.0 percent to $1,654..
August Monthly Market Comparison
With a slew of pending transactions converting to closed sales in August, the Houston housing market achieved its third consecutive month of positive home sales. On a year-to-date basis, the market is running 2.8 percent ahead of 2019’s record pace. Single-family home sales, total property sales and total dollar volume all rose compared to August 2019. Pending sales soared 35.9 percent. However, total active listings – or the total number of available properties – fell 23.0 percent.
Single-Family Homes Update
In August, single-family home sales rose 6.0 percent with 9,195 units sold throughout the greater Houston area compared to 8,673 a year earlier. On a year-to-date basis, sales are currently 2.8 percent ahead of last year’s record pace. Strong sales volume at the high end of the market elevated pricing levels. The single-family home median price rose 7.6 percent to $269,000 while the average price increased 7.8 percent to $334,256.
Days on Market (DOM), or the number of days it took the average home to sell, lowered from 53 to 51. Inventory registered a 2.8-months supply compared to 4.1 months a year earlier and is at levels not seen since April 2015. It is also slightly below the current national inventory level of 3.1 months recently reported by NAR.
Broken out by housing segment, August sales performed as follows:
- $1 – $99,999: decreased 34.2 percent
- $100,000 – $149,999: decreased 31.4 percent
- $150,000 – $249,999: decreased 4.4 percent
- $250,000 – $499,999: increased 18.3 percent
- $500,000 – $749,999: increased 34.4 percent
- $750,000 and above: increased 40.3 percent
HAR also breaks out sales figures for existing single-family homes. Existing home sales totaled 7,621 in August, up 7.0 percent compared to the same month last year. The average sales price rose 10.2 percent to $332,003 while the median sales price jumped 10.6 percent to $260,000.
For HAR’s new Monthly Activity Snapshot (MAS) of the August 2020 trends, please click HERE to access a downloadable PDF file.
Townhome and condominium edged up 1.3 percent in August, registering 647 closed sales compared to 639 a year earlier. The average price rose 4.5 percent to $216,733 and the median price increased 1.7 percent to $175,000. Inventory narrowed from a 4.6-months supply to 4.1 months.
Houston Real Estate Highlights in August
Following a record-setting performance in July, single-family home sales held to positive territory again in August, rising 6.0 percent year-over-year with 9,195 units sold;
- The Days on Market (DOM) figure for single-family homes lowered from 53 to 51 days;
- Total property sales rose 7.3 percent with 11,121 units sold;
- Total dollar volume jumped 13.4 percent to $3.5 billion;
- The single-family home median price rose 7.6 percent to $269,000 – the second highest median price of all time;
- The single-family home average price increased 7.8 percent to $334,256 – the second highest average price in history;
- Single-family homes months of inventory registered a 2.8-months supply, down from 4.1 months last August and below the national inventory level of 3.1 months;
- Townhome/condominium sales rose 1.3 percent, with the average price up 4.5 percent to $216,733 and the median price up 1.7 percent to $175,000;
- Single-family home rentals dropped 13.3 percent with the average rent up 2.3 percent to $1,961;
- Townhome/condominium leases fell 13.7 percent with the average rent up 1.0 percent to $1,654.