Sales volume and pricing soar to new highs as pent-up demand from COVID-19 heats up Houston housing for a second straight month
HOUSTON — (August 12, 2020) — A continued surge in closings from homes that went under contract after the lifting of COVID-19 stay-at-home measures propelled Houston real estate into record territory in July – surpassing June’s stronger-than-expected performance. However, a dwindling supply of homes caused by the burst of homebuying and home sellers holding back amid the ongoing COVID-19 crisis will make it difficult to keep up with the strong buyer demand.
According to the latest Houston Association of Realtors (HAR) Market Update, 10,975 single-family homes sold in July compared to 8,921 a year earlier. That translated to a 23.0 percent increase. That is a record sales volume for a single month and marks the first time that figure has surpassed 10,000.
Homes priced between $500,000 and $750,000 registered the greatest percentage increase, rocketing 51.9 percent compared to July 2019. The second-best performer was the luxury market – consisting of homes priced at $750,000 and above – which jumped 41.7 percent year-over-year. Homes between $200,000 and $500,000, the range in which the largest number of homes sell, also saw substantial increases over last year.
The combined strength in the high-end and mid-range markets pulled average and median pricing up to historic levels. The single-family home median price rose 8.7 percent to $271,830 while the average price climbed 8.5 percent to $338,350. Year-to-date sales are now 2.7 percent ahead of 2019’s record pace.
Sales of all property types totaled 13,043 – another record high – up 25.0 percent from July 2019. Total dollar volume for the month leapt 33.8 percent to $4.1 billion. Consumers also sent lease properties into positive territory in July.
“We are grateful for two consecutive months of strong activity across greater Houston, however we do not consider the current pace of home sales sustainable given the shrinking supply of homes and expect business to taper a bit this fall,” said HAR Chairman John Nugent with RE/MAX Space Center. “Historically low interest rates make this an outstanding time to buy a home, but without the inventory, there unfortunately isn’t much out there for consumers.”
Lease Property Update
July leases of single-family homes rose 2.9 percent year-over-year while leases of townhomes and condominiums climbed 6.9 percent. The average rent for single-family homes increased 1.8 percent to $1,940 while the average rent for townhomes and condominiums was flat at $1,659.
July Monthly Market Comparison
Continued pent-up housing demand stemming from coronavirus-related stay-at-home directives in the spring led to a second straight month of surging sales in July that pushed the Houston housing market ahead of 2019’s record pace. Single-family home sales, total property sales and total dollar volume all rose compared to July 2019. Pending sales shot up 33.9 percent. However, total active listings, or the total number of available properties, fell 19.4 percent.
With new listings trickling into the marketplace on top of the surge in sales, single-family homes inventory dwindled to a 3.0-month supply in July versus 4.2 months a year earlier. For perspective, housing inventory across the U.S. stands at a 4.0-months supply, according to the the National Association of Realtors (NAR).
Single-Family Homes Update
Single-family home sales soared 23.0 percent in July, with 10,975 units sold across greater Houston compared to 8,921 a year earlier. That is the greatest one-month sales volume of all time and represents the first time that figure has broken the 10,000-mark. On a year-to-date basis, sales are now running 2.7 percent ahead of last year’s record pace. Strong buying activity in the high end of the market drove pricing to historic levels. The single-family home median price rose 8.7 percent to $271,830 while the average price climbed 8.5 percent to $338,350.
Days on Market (DOM), or the number of days it took the average home to sell, edged up from 51 to 56. Inventory registered a 3.0-months supply compared to 4.2 months a year earlier and is below the current national inventory level of 4.0 months recently reported by NAR.
Broken out by housing segment, July sales performed as follows:
- $1 – $99,999: decreased 20.2 percent
- $100,000 – $149,999: decreased 29.3 percent
- $150,000 – $249,999: increased 13.4 percent
- $250,000 – $499,999: increased 37.1 percent
- $500,000 – $749,999: increased 51.9 percent
- $750,000 and above: increased 41.7 percent
HAR also breaks out sales figures for existing single-family homes. Existing home sales totaled 8,989 in July, up 22.5 percent compared to the same month last year. The average sales price rose 9.1 percent to $332,795 while the median sales price jumped 10.9 percent to $265,000.
For the latest weekly report on housing market trends throughout the greater Houston area, please see the HAR Weekly Activity Snapshot for the week ending August 10, available HERE as a downloadable PDF file.
Townhouse/Condominium Update
After ending three straight months of declining sales in June, townhome and condominium sales were flat in July, registering 690 closed sales compared to 691 a year earlier. The average price rose 9.9 percent to $223,190 and the median price climbed 12.3 percent to $183,000. Inventory narrowed slightly from a 4.6-months supply to 4.3 months.
Houston Real Estate Highlights in July
- Following a strong performance in June, single-family home sales soared into record-setting territory in July, leaping 23.0 percent year-over-year with 10,975 units sold – a record one-month sales volume;
- The Days on Market (DOM) figure for single-family homes expanded from 51 to 56 days;
- Total property sales soared 25.0 percent with a record-setting 13,043 units sold;
- Total dollar volume shot up 33.8 percent to $4.1 billion;
- The single-family home median price set a new record high of $271,830 as it rose 8.7 percent year-over year;
- The single-family home average price jumped 8.5 percent to $338,350 – also an historic high;
- Single-family homes months of inventory was at a 3.0-months supply, down from 4.2 months last July and below the national inventory level of 4.0 months;
- Townhome/condominium sales were flat, with the average price up 9.9 percent to $223,190 and the median price up 12.3 percent to $183,000;
- Single-family home rentals rose 2.9 percent with the average rent up 1.8 percent to $1,940;
- Townhome/condominium leases increased 6.9 percent with the average rent unchanged at $1,659.