Q3 Houston Real Estate News
Houston Real Estate is cooling off, with the sale of single-family homes dropping for the second month in a row. Normally this is unexpected and unwelcomed news for Realtors, but not the case this time.
“The scorching pace of Houston housing throughout most of the pandemic was completely unsustainable, so the cooling that we have experienced over the past four months was expected and is all part of a market normalization,” said HAR Chair Jennifer Wauhob. “As long as we continue to see inventory grow and prices level off, I believe homebuyers will move off the sidelines and back into the marketplace. An easing of interest rates would help as well, particularly for first-time buyers who desperately want to seize the American Dream of homeownership.”
Current Houston Real Estate Snapshot
After two years of double-digit growth, July’s sales figures are slowing down.
- Single-family home sales dropped 17.1% over last year
- Townhome and condominium sales are down 21.5%
- Total property sales are down 17.4% over last year’s numbers
Single-family sales totals year to date are now down 1.3% compared to the first seven months of 2021.
Underlying Factors that Affect Houston Real Estate
Several key economic factors have changed in 2022; inflation and interest rates are both up and consumer confidence is down. A portion of the slowdown can be chalked up to low inventory. Low supply drives up the price and for some buyers, and the price pushes them to the sidelines. Let’s take a look at some details.
- The one bright spot during the month of July in the local market was homes priced between $500,000 and $999,999, with an increase of 40.6%
- Luxury homes, priced at $1 million or above, dropped 52.5% in July. This was only the second month in 2022 that this sector saw a decline.
- The sector with the smallest decline was the $250,000 to $499,999, with a 9.2% drop. However, the inventory in this sector is in decline since prices are on the rise.
Current Houston Real Estate Prices
The wild rise in home prices appears to be moderating for now.
- The average price for single-family homes in July was $426,494, a nice 9.9% above 2021 prices. However, that is below the record high of two months ago, when the average rose to $438,844.
- The median price for single-family homes also rose a healthy 12.7% over last year, to $348,740. Again, the record for the median price was June 2022, to $354,613.
- Townhomes and condo prices saw similar increases. Average prices rose 5% to $257,834, while median price rose 9.7% to $220,000. Both are below April’s record highs.
While the sale of single-family homes has dropped by 12.5%, this is allowing the inventory to grow. We can only sell homes that are available. Active listings are rising significantly, 30% in July. The inventory for single-family homes is a healthy 2.5-month supply, up from a 1.7-months last year. For reference, the August 2020 inventory was a 2.6-month supply. Although townhome and condominium inventory fell slightly, it still remains at a 2-month supply.
Inventory is measured by the estimated number of months necessary to sell the available homes listed in a market area based on the annual pace of sales. The National Association of Realtors reports a national inventory of 3 months and considers a 6-month supply a balanced inventory marker.
Questions about Houston Real Estate, We Can Help?
With over 5 decades of experience in the Houston Real Estate Market, The Matthews Team can help you choose a Houston Real Estate Agent for your next home or property purchase. If you have any questions, give us a call at 281-440-7900 or send us an email. We’re happy to help!