The luxury market leads the way with a surge in sales

With an uptick in home sales and expanding inventory, the Houston real estate market’s positive momentum in February brings an optimistic outlook for the spring homebuying season.

According to the Houston Association of Realtors’ (HAR) February 2024 Market Update, single-family home sales across the Greater Houston area rose 7.6 percent. That is only the third increase in the past year. The first was in November 2023 when sales were up 5.2 percent. The Houston Multiple Listing Service (MLS) recorded sales of 6,221 units compared to 5,781 in February 2023. Months supply of homes climbed from 2.5 to 3.4.

The high end of the market saw the strongest performance in February. Home sales in the luxury segment ($1 million+), which represents just 3.5 percent of all homes on the market, surged 48.0 percent year-over-year. That was followed by the segment that consisted of homes priced between $500,000 and $1 million which rose 18.3 percent year-over-year. Only homes priced between $150,000 to $250,000 saw declines during the month. Rentals of single-family homes continued to hold strong in February. HAR will publish its February 2024 Rental Home Update on Wednesday, March 20.

“With pent-up demand, consumers appear to finally be pushing aside interest rate concerns and returning to the market, which bodes well for the spring homebuying season,” said HAR Chair Thomas Mouton with Century 21 Exclusive. “The increase in home sales, slight appreciation in home prices and expanding inventory, creates opportunities for both buyers and sellers in the marketplace.”

The average price of a single-family home throughout Greater Houston rose 4.1 percent to $400,252 and the median price increased 3.0 percent to $329,686.

February Monthly Market Comparison

February marked the second consecutive month that single-family homes sales were in positive territory with sales climbing 7.6 percent year-over-year. Last month, sales rose 8.9 percent.

In addition to the increase in single-family sales volume, total property sales were up 7.0 percent and total dollar volume increased 11.8 percent from $2.6 billion to $2.9 billion. Single-family pending sales rose 12.9 percent. Active listings, or the total number of available properties, were 22.0 percent ahead of the prior year.

Months of inventory expanded from a 2.5-months supply last February to 3.4 months, which is slightly below the 3.5-months supply that prevailed in October and November 2023. Housing inventory nationally is at a 3.0-months supply, according to the latest report from the National Association of Realtors (NAR). A 4.0- to 6.0-month supply is generally considered a “balanced market” in which neither buyer nor seller has an advantage.

Single-Family Homes Update

In February, single-family home sales experienced only the third increase in the past 12 months, climbing 7.6 percent year-over-year with a total of 6,221 units sold across the Greater Houston area versus 5,781 in 2023. The average price rose 4.1 percent to $400,252 while the median price rose 3.0 percent to $329,686.

Days on Market, or the actual time it took to sell a home, lowered from 64 to 57 days. Months of inventory increased to a 3.4-months supply compared to 2.5 months a year earlier. The current national supply stands at 3.0 months, as reported by NAR.

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

  • $1 – $99,999: increased 6.9 percent
  • $100,000 – $149,999: increased 8.9 percent
  • $150,000 – $249,999: decreased 3.8 percent
  • $250,000 – $499,999: increased 8.9 percent
  • $500,000 – $999,999: increased 18.3 percent
  • $1M and above: increased 48.0 percent

HAR also breaks out sales figures for existing single-family homes. Existing home sales totaled 4,139 in February, up 6.5 percent from the same month last year. The average price rose 6.1 percent to $405,334 and the median sales price rose 6.7 percent to $327,000.

For HAR’s Monthly Activity Snapshot (MAS) of the February 2024 trends, please click HERE to access a downloadable PDF file.

Townhouse/Condominium Update

In February, the inventory of townhomes and condominiums hit the highest level in more than three years. Inventory grew from a 2.0-months supply to 4.0 months, which is the highest since August 2020.

Sales of townhomes and condominiums continued to decline in February. Sales fell 8.1 percent year-over-year with 411 closed sales versus 447 a year earlier. The average price of townhomes and condominiums rose 5.5 percent to $258,587 while the median price jumped 8.9 percent to $237,500.

Houston Real Estate Highlights in February

  • Single-family home sales rose 7.6 percent year-over-year, the third increase in the past year;
  • Days on Market (DOM) for single-family homes went from 64 to 57 days;
  • Total property sales rose 7.0 percent with 7,541 units sold;
  • Total dollar volume was up 11.8 percent to $2.9 billion;
  • The single-family median price rose 3.0 percent to $329,686;
  • The single-family average price rose 4.1 percent to $400,252;
  • Single-family home months of inventory registered a 3.4-months supply, up from 2.5 months a year earlier;
  • Townhome/condominium sales continue to decline, falling 8.1 percent, with the median price up 8.9 percent to $237,500 and the average price up 5.5 percent to $258,587.