HOUSTON – Home sales reached a record high in June as 8,414 single-family homes changed hands, the highest monthly total ever recorded in Houston, the Houston Association of Realtors (HAR) reported.
“June proved to be another outstanding month for the Houston real estate market, with buyers and renters driving volume and prices to record levels,” said HAR Chair Cindy Hamann. “With continued strong employment and healthy housing inventory, we expect the market to stay active.”
The record 8,414 single-family home sales in June marked an 8.3 percent increase over the 7,771 homes sold in June of last year. This June, together with May of this year, are the only months in Houston’s history in which single-family sales have exceeded 8,000.
“It’s a strong time to sell,” said Amy Bernstein of Bernstein Realty. “Many buyers want to act before mortgage rates rise.”
Freddie Mac’s national survey shows the average 30-year fixed-rate mortgage at 4.03 percent, up from 3.96 percent the previous week. A year ago, the average rate was 3.42 percent.
Houston’s upswing shows no sign of slowing. Pending sales in the Houston MLS rose 19 percent in June compared with the end of June 2016, indicating continued momentum. Year-to-date sales are 7.4 percent ahead of last year’s pace, suggesting 2017 could become the strongest year on record for Houston home sales.
Overall, Houston’s residential market weathered the oil-price downturn with limited long-term damage, aside from some softness at the top end. West Texas Intermediate (WTI) crude peaked at $107 per barrel in June 2014 before plunging to about $26 per barrel in February 2016, triggering layoffs at energy firms and stress in the local economy. Oil prices have since recovered, with WTI recently trading near $46 per barrel.
Improving stability in energy has contributed to increased corporate relocation activity in Houston, said Mary Piper, director of relocations for Bernstein Realty. “I’ve seen a definite uptick in relocation activity. There appears to be a rebound in the oil industry,” Piper noted.
Beyond energy, growth in other industries and the medical sector has also driven moves into Houston. Corporate mergers have resulted in employee relocations that fuel residential sales.
Another positive trend for the market has been rising inventory. In June, new listings lifted the supply from a 3.9-months level to 4.4 months—the highest inventory in nearly five years. A six-month supply is generally considered balanced between buyers and sellers.
Houston’s inventory had been unusually low in recent years, occasionally dipping below a three-month supply. That shortage led to bidding wars and fast-moving listings that left many buyers outbid. The recent inventory increase has provided buyers with more options and supported a more normalized pace of sales. Even so, the market remains in sellers’ favor, well below the recession-era peak when an eight-month inventory depressed activity.
The upper end of the market showed strength in June as well: homes priced above $750,000 posted a 13 percent increase in sales activity.
Meanwhile, the median home price—the midpoint where half of homes sold for more and half sold for less—rose 2.6 percent from June 2016 to an all-time high of $239,023.
July 13, 2017 Realty News Report Copyright 2017