Housing inventory grows to pre-Harvey levels

HOUSTON — (July 10, 2019) — Despite continued strength in the Houston real estate market fueled by more robust inventory and low interest rates, June home sales could not match the historic levels of a year earlier, in June of 2018. According to the latest monthly report from the Houston Association of REALTORS® (HAR), single-family home sales were down 3.4 percent. However, on a year-to-date basis, sales are still outpacing 2018’s record volume.

Homes in the $250,000 to $500,000 range comprised the only housing segment to enjoy sales gains when compared to last June’s record-breaking performance. The luxury segment (homes priced at $750,000 and above) was flat.

The median price of a single-family home (the figure at which half of the homes sold for more and half sold for less) reached an all-time high, climbing 2.9 percent to $252,000. The average price rose to the highest level ever for a June, up 2.0 percent to $321,973.

Consumers shopping for a home in the greater Houston area now have more options available, as housing inventory reached a 4.4-months supply in June – returning to levels last seen before Hurricane Harvey ravaged the market in August 2017. A year ago, the supply stood at 4.1 months.

June sales of all property types totaled 9,461. That is down 5.1 percent compared to the same month last year. Total dollar volume for the month declined 3.1 percent to $2.9 billion.  

 “We knew it would be difficult to top last June’s record-breaking sales volume, but the Houston real estate market remains strong and now offers prospective buyers an even greater selection of housing than they’ve had in some time,” said HAR Chair Shannon Cobb Evans with Heritage Texas Properties. “Consumers also continue to show interest in rental properties, which had another impressive performance in June.

Lease Property Update

Consumer demand for lease properties was up again in June compared to one year prior. Single-family home rentals rose 3.0 percent while rentals of townhomes and condominiums increased 3.2 percent. The average rent for single-family homes edged up 2.2 percent to $1,922 while the average rent for townhomes and condominiums fell 3.2 percent to $1,606.

June Monthly Market Comparison

The Houston real estate market provided a mixed bag of readings in June. Single-family home sales, total property sales and total dollar volume declined when compared to June 2018 while pricing and inventory were on the rise. Month-end pending sales of single-family homes totaled 8,796, a 13.2 percent increase over last year. Total active listings, or the total number of available properties, climbed 11.0 percent to 45,262.

Single-family homes inventory grew to a 4.4-months supply in June. That is up from 4.1 months a year earlier and restores a supply level that prevailed before Hurricane Harvey affected the region in August of 2017. For perspective, housing inventory across the U.S. currently stands at a 4.3-months supply, according to the latest report from the National Association of REALTORS® (NAR).

Single-Family Homes Update

June marked the first month of 2019 with declining single-family home sales, due to the record-breaking levels of one year earlier. Realtors sold a total of 8,097 units versus 8,385 a year earlier. That translates to a 3.4 percent decline. On a year-to-date basis, however, single-family home sales are running 1.4 percent ahead of 2018’s record pace.

The median home price reached an all-time high of $252,000, up 2.9 percent from June 2018. The average price rose 2.0 percent to $321,973, the highest ever for a June.

Days on Market (DOM), or the number of days it took the average home to sell, was 49 compared to 48 a year ago. Inventory expanded to a 4.4-months supply. That is up from 4.1 months year-over-year and restores a supply of homes last seen before Hurricane Harvey struck in August 2017. It is slightly above the national inventory of 4.3 months reported by NAR.

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

  • $1 – $99,999: decreased 8.1 percent
  • $100,000 – $149,999: decreased 31.9 percent
  • $150,000 – $249,999: decreased 4.7 percent
  • $250,000 – $499,999: increased 0.7 percent
  • $500,000 – $749,999: decreased 4.7 percent
  • $750,000 and above: unchanged

 HAR also breaks out sales activity for existing single-family homes. Existing home sales totaled 6,821 in June, down 2.6 percent versus the same month last year. The average sales price rose 3.3 percent to $314,725 while the median sales price increased 3.8 percent to $243,000.

Townhouse/Condominium Update

Townhouse and condominium sales have struggled in 2019, with declines recorded every month except April when they eked out a 0.8 percent gain. In June, 584 townhouses and condominiums sold, down 16.2 percent from a year earlier when 697 units sold. The average price rose 6.7 percent to $224,812 while the median price increased 8.7 percent to $177,250. Inventory grew from a 4.2-months supply to 4.9 months.

Houston Real Estate Highlights in June

  • Single-family home sales fell shy of last June’s record-setting levels, declining 3.4 percent year-over-year, with 8,097 units sold, marking the first down sales month of 2019;
  • On a year-to-date basis, single-family home sales are 1.4 percent ahead of 2018’s record pace;
  • Days on Market (DOM) for single-family homes went from 48 to 49 days;
  • Total property sales fell 5.1 percent, with 9,461 units sold;
  • Total dollar volume slid 3.1 percent to slightly more than $2.9 billion;
  • The single-family home median price rose 2.9 percent to $252,000, achieving an all-time high;
  • The single-family home average price was up 2.0 percent to $321,973 – a record high for a June;
  • Single-family homes months of inventory reached a 4.4-months supply, up from 4.1 months last June and the most plentiful level since before Hurricane Harvey tore through the region in August 2017. For comparison, the national inventory is at a 4.3-months supply, according to NAR;
  • Townhome/condominium sales fell 16.2 percent with 584 units sold. The average price was up 6.7 percent to $224,812 and the median price rose 8.7 percent to $177,250;
  • Single-family home rentals increased 3.0 percent with the average rent up 2.2 percent to $1,922;
  • Volume of townhome/condominium leases rose 3.2 percent with the average rent down 3.2 percent to $1,606.