Market maintains a record-setting pace even as the supply of homes dwindles further
HOUSTON — (December 9, 2020) — Houston housing in November continued selling at a record pace despite historically low inventory, the start of the holiday season and the lingering coronavirus pandemic. A low supply of homes for sale and strong demand from homebuyers combined to push the average price to record territory. Once again, the high end of the market generated the strongest increase in consumer activity with mid-range homes also selling briskly.
According to the latest Houston Association of Realtors (HAR) Market Update, 7,990 single-family homes sold in November compared to 6,359 a year earlier. That translates to a 25.6 percent increase and marks the sixth straight month of positive sales.
Homes priced at $750,000 and above rocketed 88.4 percent compared to November 2019. That was followed by the $500,000 to $750,000 housing segment, which jumped 72.2 percent year-over-year. Homes between $250,000 and $500,000, which comprise the market’s biggest share of sales, shot up 50.3 percent.
The single-family home average price climbed 15.0 percent to an historic high of $341,765 while the median price increased 12.0 percent to $270,000 – the second highest level of all time. Year-to-date sales are currently 9.0 percent ahead of 2019’s record pace.
Sales of all property types totaled 9,660 – up 28.1 percent from November 2019. Total dollar volume for the month rose 43.9 percent to $3.1 billion. The lease market recorded an 11.1 percent decline in single-family housing while townhouse/condo leases fell 4.0 percent.
“In my 50 years in the real estate business, I have never seen a market defy supply and seasonality the way Houston has – amid a pandemic, no less,” said HAR Chairman John Nugent with RE/MAX Space Center. “It’s quite extraordinary to watch consumers take advantage of historically low interest rates and be able to choose their dream homes from among the tightest housing inventory this market has ever experienced.”
Lease Property Update
Houston’s lease property market staged a lackluster performance in November. Leases of single-family homes fell 11.1 percent year-over-year while leases of townhomes and condominiums tumbled 4.0 percent. The average rent for single-family homes declined 5.5 percent to $1,882 while the average rent for townhomes and condominiums increased 11.5 percent to $1,674.
November Monthly Market Comparison
Houston real estate registered its sixth consecutive month of positive sales in November, propelled by consumers taking advantage of historically low interest rates as they managed to find homes from among the most constrained inventory of all time.
On a year-to-date basis, the market is running 9.0 percent ahead of 2019’s record pace. Single-family home sales, total property sales and total dollar volume all increased compared to November 2019. Pending sales shot up 34.5 percent. However, total active listings – or the total number of available properties – fell 27.0 percent as new listings trickled onto the market.
The sluggish pace of new listings combined with another strong month of sales volume drove single-family homes inventory down to a 2.2-month supply compared to 3.6 months a year earlier. For November, new listings rose just 1.6 percent year-over-year. Housing inventory nationally stands at a 2.5-months supply, according to the National Association of REALTORS (NAR).
Single-Family Homes Update
Single-family home sales soared 25.6 percent in November with 7,990 units sold throughout the greater Houston area compared to 6,359 a year earlier. On a year-to-date basis, sales are outpacing last year’s record volume by 9.0 percent. Strong sales volume among homes in the high end of the market once again pushed pricing upward. The single-family home average price hit a record high, climbing 15.0 percent to $341,765. The median price reached the second highest level of all time, rising 12.0 percent to $270,000.
Days on Market (DOM), or the number of days it took the average home to sell, fell from 59 to 46. With fewer new listings entering the market, inventory registered a 2.2-months supply compared to 3.6 months a year earlier and is at historically low levels. It is also below the current national inventory level of 2.5 months recently reported by NAR.
Broken out by housing segment, November sales performed as follows:
- $1 – $99,999: decreased 38.5 percent
- $100,000 – $149,999: decreased 37.0 percent
- $150,000 – $249,999: increased 7.4 percent
- $250,000 – $499,999: increased 50.3 percent
- $500,000 – $749,999: increased 72.2 percent
- $750,000 and above: increased 88.4 percent
HAR also breaks out sales figures for existing single-family homes. Existing home sales totaled 6,378 in November, up 27.5 percent compared to the same month last year. The average sales price jumped 20.0 percent to $339,607 while the median sales price climbed 17.4 percent to $264,250.
For HAR’s new Monthly Activity Snapshot (MAS) of the November 2020 trends, please click HERE to access a downloadable PDF file.
Sales of townhouses and condominiums increased for the third straight month in November, rising 23.4 percent with 580 closed sales versus 470 a year earlier. The average price rose 2.5 percent to $224,130 and the median price shot up 11.8 percent to $190,000. Inventory fell from a 4.4-months supply to 3.8 months.
Houston Real Estate Highlights in November
• Single-family home sales increased for a sixth consecutive month, surging 25.6 percent year-over-year with 7,990 units sold;
• The Days on Market (DOM) figure for single-family homes dropped from 59 to 46;
• Total property sales shot up 28.1 percent with 9,660 units sold;
• Total dollar volume jumped 43.9 percent to $3.1 billion;
• The single-family average price achieved a record high, rising 15.0 percent to $341,765;
• The single-family median price climbed 12.0 percent to $270,000 – the second highest median price of all time;
• Single-family homes months of inventory registered a 2.2-months supply, down from 3.6 months last November and below the national inventory of 2.5 months;
• Townhome/condominium sales jumped 23.4 percent with the average price up 2.5 percent to $224,130 and the median price up 11.8 percent to $190,000;
• Single-family home rentals fell 11.1 percent with the average rent down 5.5 percent to $1,882;
• Townhome/condominium leases declined 4.0 percent with the average rent up 11.5 percent to $1,674.