HOUSTON – (Realty News Report) – Houston set a new record for single-family home sales in 2019, with 86,205 closings, an increase of 4.8 percent compared with 2018, the Houston Association of Realtors reported Wednesday.
Strong demand was driven by mortgage rates that fell below 4 percent, steady job growth and a broader selection of homes for sale in many neighborhoods.
“We finished the best year ever,” said former HAR chairman Shad Bogany of Better Homes & Gardens Gary Greene. “A lot of it has to do with our job growth and our diversity.”
For the year, the median price for a single-family home in Houston was $245,000, up 3.2 percent from the 2018 median of $237,500, HAR reported.
“Prices are still rising,” Bogany said. “The challenge we are going to have in the future is affordability — because it’s almost gone.”
HAR noted a 20 percent decline in December sales of homes priced under $100,000, reflecting extremely tight inventory at the lower end of the market.
Overall, Houston finished the year with a 3.4-month supply of homes on the market, a level that still favors sellers.
December brought a strong finish to the year, with 7,505 single-family homes sold—a 14.3 percent increase over December 2018.
“As long as the Houston economy remains healthy and we see some growth in housing inventory, we expect 2020 to get off to a positive start,” said HAR Chairman John Nugent of RE/MAX Space Center.
HAR statistics show pending home sales were up 22.7 percent in December, a substantial gain that bodes well for activity in January 2020.
Will sales maintain this momentum in 2020?
“We believe so. Our city is growing and many people continue to relocate here,” said Nancy Almadovar, president and CEO of Nan & Company Properties. “Our agency does well because millennials make up a large share of buyers and that is the market we focus on.”
Student debt has weighed on millennials for years and household formation among that generation has lagged, but more millennials are gradually entering the housing market.
At Taylor Morrison Homes, about 33 percent of buyers today are millennials, up from roughly 20 percent five years ago, said Sheryl Palmer, CEO of the Arizona-based homebuilder.
Mortgage rates are expected to remain stable through 2020, and the Federal Reserve is unlikely to make abrupt moves while inflation stays subdued.
On the downside, job growth in Houston may slow slightly from the 2019 pace as the energy sector navigates a downturn.
Another challenge is that housing inventory is tightening again. Limited supply had previously constrained buyers who struggled to find suitable homes in their preferred neighborhoods, and that shortage is reemerging in some price ranges.
Jan. 8, 2020 Realty News Report Copyright 2020
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