Noteworthy News – November 2020

HOUSTON — (November 11, 2020) — Even with an ever-dwindling supply of housing and a lingering pandemic, consumers bought homes at a frenzied pace in October, keeping the Houston real estate market on the path to a record year. The high end of the market once again registered the greatest sales volume increase, with mid-range homes also attracting heavy activity.

According to the latest Houston Association of Realtors (HAR) Market Update, 9,287 single-family homes sold in October compared to 7,187 a year earlier. That represents a 29.2 percent increase and marks the fifth straight month of positive sales.

Homes priced at $750,000 and up surged 81.6 percent compared to October 2019. That was followed by the $500,000 to $750,000 housing segment, which jumped 78.4 percent year-over-year.  Homes between $250,000 and $500,000, which make up the market’s biggest share of sales, also achieved notable increases over last year.

The single-family home median price rose 11.1 percent to $266,685 while the average price increased 12.4 percent to $334,996. Both figures are record highs for an October. Year-to-date sales are currently 7.7 percent ahead of 2019’s record pace.

Sales of all property types totaled 11,232 – up 31.5 percent from October 2019. Total dollar volume for the month rose 46.1 percent to $3.5 billion. The lease market had mixed results in October with a 5.1 percent decline in single-family housing while townhouse/condo leases jumped 11.0 percent.

 “There was no way to anticipate that the Houston housing market would move at such incredible velocity when coronavirus struck, but I believe it is a testament to the importance of meeting consumers’ housing needs during a pandemic and the dedication of hard-working real estate professionals throughout our community,” said HAR Chairman John Nugent with RE/MAX Space Center.

October delivered a mixed performance for Houston’s lease property market. Leases of single-family homes fell 5.1 percent year-over-year while leases of townhomes and condominiums were rose 11.0 percent. The average rent for single-family homes increased 6.2 percent to $1,907 while the average rent for townhomes and condominiums increased 3.5 percent to $1,595.

Consumers snapped up what few homes were available, continuing to seize upon historically low mortgage interest rates even as COVID-19 cases nationwide began to climb. Houston real estate marked its fifth consecutive month of positive sales. On a year-to-date basis, the market is now running 7.7 percent ahead of 2019’s record pace. Single-family home sales, total property sales and total dollar volume all increased compared to October 2019. Pending sales shot up 38.6 percent. However, total active listings – or the total number of available properties – fell 25.9 percent.

A continued slowdown of new listings entering the market combined with another vibrant month of sales sent single-family homes inventory down to a 2.4-month supply compared to 3.8 months a year earlier. The last time inventory dropped that low was in December 2014. For October, new listings rose just 2.5 percent year-over-year. Housing inventory nationally stands at a 2.7-months supply, according to the National Association of Realtors (NAR).

Single-family home sales soared 29.2 percent in October with 9,287 units sold throughout the greater Houston area compared to 7,187 a year earlier. On a year-to-date basis, sales are outperforming last year’s record volume by 7.7 percent. Strong sales volume in the upper segment of the market once again pushed pricing up. The single-family home median price rose 11.1 percent to $266,685 while the average price increased 12.4 percent to $334,996. Both figures are historic highs for an October.

Days on Market (DOM), or the number of days it took the average home to sell, dropped from 59 to 47. Despite a 2.5 percent increase in new listings in September, inventory registered a 2.4-months supply compared to 3.8 months a year earlier and is near levels last seen almost six years ago, in December 2014. It is also below the current national inventory level of 2.7 months recently reported by NAR.

Broken out by housing segment, October sales performed as follows:

HAR also breaks out sales figures for existing single-family homes. Existing home sales totaled 7,542 in October, up 32.0 percent compared to the same month last year. The average sales price rose 15.9 percent to $331,499 while the median sales price jumped 15.5 percent to $259,900.

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For HAR’s new Monthly Activity Snapshot (MAS) of the October 2020 trends, please click HERE to access a downloadable PDF file.

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Townhouses and condominiums rocketed 28.3 percent in October, registering 648 closed sales compared to 506 a year earlier. The average price jumped 10.8 percent to $220,326 and the median price increased 8.2 percent to $178,000. Inventory fell from a 4.6-months supply to 4.1 months.

• Single-family home sales increased for a fifth consecutive month, surging 29.2 percent year-over-year with 9,287 units sold;

• The Days on Market (DOM) figure for single-family homes lowered from 59 to 47 days;

• Total property sales shot up 31.5 percent with 11,232 units sold;

• Total dollar volume jumped 46.1 percent to $3.5 billion;

• The single-family home median price climbed 11.1 percent to $266,685 – the highest median price for an October;

• The single-family home average price increased 12.4 percent to $334,996 – the highest average price for an October;

• Single-family homes months of inventory registered a 2.4-months supply, down from 3.8 months last October and below the national inventory level of 2.7 months. The last time inventory was that low was in December 2014;

• Townhome/condominium sales jumped 28.3 percent, with the average price up 10.8 percent to $220,326 and the median price up 8.2 percent to $178,000;

• Single-family home rentals fell 5.1 percent with the average rent up 6.2 percent to $1,907;

• Townhome/condominium leases jumped 11.0 percent with the average rent up 3.5 percent to $1,595.