HOUSTON — (By Michelle Leigh Smith for Realty News Report) — Home sales in Houston surged to a record high in March, with transactions rising 24.4 percent compared with March of last year, according to the Houston Association of Realtors.
Historically low mortgage rates have driven buyers toward the market with urgency. The awareness that rates near 3 percent are unlikely to last has intensified competition among prospective purchasers.
When well-priced, quality homes come on the market, they frequently attract multiple offers from motivated buyers.
“Houston’s real estate market was tight before the Big Freeze, but now it’s crazy! Inventories are at record lows, and we are seeing strong demand,” says Ann Martin, Vice President of Roger Martin Properties.
In March, 9,347 single-family homes were sold, compared with 7,511 the previous March. March 2020 had been the best March on record for Houston home sales, and March 2021 became the third-best sales month in the city’s history.
The supply of homes for sale fell to a record low of a 1.4-months supply, down from 3.4 months a year earlier.
“The inventory shortage is causing stress for many folks,” said HAR Chairman Richard Miranda of Keller Williams Platinum. “Hopefully we begin to see an uptick in new listings sooner than later.”
Homes sold more quickly than a year ago: average days on market dropped to 45 days from 65 days the prior year.
“We’re finding that it feels like one of the busiest times ever. Anyone who has any piece of real estate is interested in selling and we are seeing sales at record highs. It’s going gangbusters,” said Loren Miner, an agent with Eastwood Realty.
Many properties are selling above their asking prices. A recent national report from Redfin found that a record-high 39 percent of homes sold for more than the listing price.
“All the bids we’ve received have been one to three percent over asking price,” says Rocio Salinas, a Realtor with Whitewall Real Estate Group, based in the East End and affiliated with Keller Williams Houston Central. “I am continuing to see it grow — people are waiving appraisals.”
“Multiple bids are not only common, but expected in home sales and even rentals,” says Realtor Tikila Adolph of the Adolph Group. “One of our rental listings received $200 over the listed price. Home inventory is scarce and so are the materials to build homes. Many builders have sold out on lots and homes before they are even available!”
Condos and townhomes are also moving more quickly. “Condos have always been tricky because of mandatory association fees and dues, but sales and leasing have definitely increased,” Adolph says. “Our buyers find townhomes to be a compelling alternative to smaller single-family homes.”
“Homes are normally closing between $5,000 and $20,000 above asking price,” says Adolph, an ordained minister who founded The Adolph Group with her husband, Willie Adolph, at Equity House Properties. “One of our listings was on the market for two days and closed within 30 days with a loan that exceeded the asking price by more than $20,000. Was the home underpriced? No — we based our listing price on recent comparable sales and similar square footage. It appears there’s particularly strong demand for homes in the $150,000 to $300,000 range. This is definitely a sellers’ market, which unfortunately leaves buyers with limited room to negotiate.”
Strong sales volume across price ranges pushed pricing to record levels. The average single-family home price climbed 19.9 percent to $370,847, while the median price rose 16.0 percent to $290,000.
HAR reported that the single-family median price reached a record $290,000 in March, a 16 percent increase year over year.
Becky Davis and her husband, Mark Standridge, top-producing agents with the Bayou City Life Group at Compass, say activity has been relentless. “I have single-family home sales inside the loop, in Sugar Land and in Cypress. It’s crazy, with multiple offers and buyers paying additional amounts to win deals. Everything has been very consistent. We went gangbusters in the fourth quarter of 2020 — as much as in the preceding three quarters. We started off really strong this year as well. The problem is low inventory — you can’t sell what isn’t available. We have been working with some buyers for months to find the right property.”
Heidi Dugan, a veteran agent at Greenwood King Properties, described March as exceptional. “It felt like the old boom times, when people moved here after Katrina or during an oil boom. March was my best month since COVID began. Last year I sold $60 million for the entire year; I normally sell $90 to $100 million annually. It’s only April and I’m over $40 million, so I expect to finish at least $100 million. Multiple bids make it challenging, but I am closing like crazy. I spend a lot of time managing expectations and explaining that buyers need to offer above list price and possibly omit some contingencies.”
At the end of the first quarter, home sales were running 16.9 percent ahead of 2020’s record pace.
The sales momentum shows no sign of slowing: as March closed, Houston’s pending sales were up 61 percent.
April 14, 2021 Realty News Report Copyright 2021
File: Houston Home Sales Up – Best March in Real Estate History
Photo credit: Ralph Bivins, Realty News Report Copyright 2021
For more about Texas real estate, see the book Houston 2020: America’s Boom Town — An Extreme Close Up by Ralph Bivins.