Growing inventory helps meet increased buyer demand; pricing eases
Steady growth in the supply of homes provided the fuel needed to help boost to the Houston real estate market in May, with single-family home sales up 10 percent year-over-year. As the market has seen for several months, the greatest concentration of home buying continued to take place among mid-range housing—homes priced between $150,000 and $500,000. The average and median price remained virtually the same as May of 2015.
According to the latest monthly report prepared by the Houston Association of REALTORS® (HAR), a total of 7,343 homes sold in May compared to 6,678 a year earlier. On a year-to-date basis, home sales rose 3.6 percent versus May of 2015. New listings buoyed inventory levels from a 3.0-months supply to 3.6 months.
“We are seeing more normal market conditions for this time of year and that is the direct result of more plentiful housing inventory for buyers,” said HAR Chairman Mario Arriaga with First Group. “A year ago, the supply of homes was historically low, which increased buyer-side demand and pushed up pricing. These are the fundamental forces of supply and demand, and with more available housing and an easing of prices, we look forward to a healthy pace of sales throughout the summer.”
The single-family home average price declined a fractional 0.5 percent in May to $290,931. The median price—the figure at which half of the homes sold for more and half sold for less—held steady at $225,000.
May sales of all property types in Houston totaled 8,703, up 7.1 percent from the same month last year. Total dollar volume for properties sold in May rose 7.3 percent to $2.4 billion.
May Monthly Market Comparison
The Houston real estate market gauges held to positive territory in May compared to those from a year earlier and continue to reflect what are widely considered sustainable market conditions. On a year-over-year basis, single-family homes sales and total dollar volume were up, inventory grew and prices were statistically flat.
Month-end pending sales for single-family homes totaled 8,286, an increase of 14.6 percent compared to last year which portends the likelihood of more positive sales when the June numbers are tallied. Total active listings, or the total number of available properties, at the end of May climbed 17.4 percent from May 2015 to 35,416.
An increase in new listings in May boosted single-family homes inventory, with levels climbing from a 3.0-months supply to 3.6 months. For perspective, housing inventory across the U.S. currently stands at a 4.7-months supply, according to the latest report from the National Association of REALTORS® (NAR).
Single-Family Homes Update
Single-family home sales totaled 7,343 in May, up 10.0 percent from May 2015.
The average price was statistically unchanged at $290,931 and the median price was also unchanged at $225,000. Days on Market (DOM), or the number of days it took the average home to sell, edged up to 52 days versus 49 last year.
Broken out by housing segment, May sales performed as follows:
- $1 – $79,999: decreased 29.6 percent
- $80,000 – $149,999: decreased 10.3 percent
- $150,000 – $249,999: increased 20.0 percent
- $250,000 – $499,999: increased 15.4 percent
- $500,000 and above: decreased 6.5 percent
HAR also breaks out the sales figures for existing single-family homes. Existing home sales totaled 6,190 in May, up 9.1 percent versus the same month last year. The average sales price edged up 1.6 percent year-over-year to $277,957 while the median sales price rose 2.4 percent to $211,000.
Townhouse/Condominium Update
Townhome and condominium sales were unchanged with 621 units selling in both May of 2016 and 2015. The average price declined 2.6 percent to $198,411 while the median price climbed 7.6 percent to $163,000. Inventory grew from a 2.6-months supply to 3.4 months.
Lease Property Update
Renters were out in force in May. Single-family home leases rose 4.1 percent, while townhome/condominium leases jumped 10.7 percent. The average rent for single-family homes held steady at $1,866 and the average rent for townhomes/condominiums also remained unchanged at $1,666.
Houston Real Estate Highlights in May
- Single-family home sales rose 10 percent compared to last May;
- On a year-to-date basis, single-family home sales are up 3.4 percent;
- Total property sales jumped 7.1 percent to 8,703 units;
- Total dollar volume rose 7.3 percent to $2.4 billion;
- At $290,931, the single-family home average price was statistically unchanged from last year;
- The single-family home median price was also flat at $225,000;
- Single-family homes months of inventory climbed to a 3.6-months supply versus 3.0 months a year earlier;
- Townhome/condominium sales were unchanged with the average price down 2.6 percent to $198,411 and the median price up 7.6 percent to $163,000;
- Leases of single-family homes were up 4.1 percent with rents unchanged at $1,866;
- Leases of townhomes/condominiums soared 10.7 percent with rents unchanged at $1,666.
