HOUSTON — (Realty News Report) — Low inventory didn’t stop home sales in January: transactions rose 28 percent compared with January of last year.
The Houston Association of Realtors reported that the inventory of homes for sale reached a record low in January.
With fewer new listings entering the market, supply registered a record-low 1.8 months, down from 3.3 months a year earlier, the association said. That figure is slightly below the national inventory level of 1.9 months recently reported by the National Association of Realtors.
Even with historically low inventory, buyers continued to find and purchase homes.
This activity continues a surge that began last June after the market stabilized following the initial disruption caused by the Covid-19 pandemic.
According to the most recent Houston Association of Realtors report, 6,088 single-family homes sold in January compared with 4,769 a year earlier.
Buyers have been encouraged by record-low mortgage rates. Thirty-year mortgage rates have been at or below 3 percent for months.
Real estate experts predicted that low inventory would slow sales, yet transactions have remained brisk. Last year was the strongest year for home sales in Houston’s history, and many analysts continue to warn that ongoing low inventory could reduce sales going forward.
“The Houston real estate market carried the momentum of 2020 into the new year; however, we believe that the current pace of sales is unsustainable without an infusion of new listings into the marketplace,” said HAR Chairman Richard Miranda of Keller Williams Platinum. “It’s our hope that as we move out of the winter months, more sellers will begin to put their homes on the market and help boost inventory toward pre-pandemic levels.”
A six-month supply of homes for sale is generally considered a balanced market. The 1.8-month supply prevailing in January creates a seller’s market, giving sellers an advantage over buyers.
The basic law of supply and demand is at work: tight inventory has pushed prices higher.
Houston’s median home price in January hit a record $263,500, a 12.1 percent increase from the $235,000 median in January of last year.
Home prices have risen substantially nationwide as well.
Home builders are facing shortages of lumber and developable lots, and housing starts have not kept pace with demand in this hot market.
Affordability is an increasing concern, according to an economist at the National Association of Home Builders.
“Housing affordability will continue to be a top concern this year,” said NAHB Chief Economist Robert Dietz while speaking at the IBS virtual conference this week. “On the demand side of the housing market, limited inventories of single-family homes generated strong price gains in 2020.”
Feb. 10, 2021 Realty News Report Copyright 2021
File: Houston Home Sales Up
Photo credit: Ralph Bivins, Realty News Report Copyright 2021