Although we are certainly not out of the woods, the Coronavirus curve in Houston has started to bend downward. Thankfully, the rate of new cases has shifted downward and coronavirus related hospitalizations are also down. Despite being the epicenter of the pandemic in the month of July, the Houston home buyers took little notice. Home prices and the number of home sales were at historic levels. This boom in real estate was driven by historically low-interest rates and shifting needs of the growing number of Houstonians working from home.
As we’ve stated before, in a volatile market, pending sales are one of the best stats we have to track the short term trajectory of the market. Based on Houston MLS data, pending sales in Harris County have dramatically rebounded since the beginning of April and have continued to hold steady over the past couple of months. Based on recent numbers, year to date pending sales are up 2.5% from the same point in 2019.
According to the Houston Association of Realtors, single-family home sales across greater Houston totaled 10,975 in July compared to 8,921 a year ago, a 25 percent jump. That represents a record sales volume for a single month. Homes priced between $500,000 and $750,000 performed the best, soaring 51.9 percent(!) compared to July 2019. The second-best performer was the luxury market (i.e. homes priced at $750,000 and above) which jumped 41.7 percent year-over-year.
Home prices in July also hit historic levels. The single-family home median price rose 8.7 percent to $271,830 while the average price climbed 8.5 percent to $338,350. Year-to-date sales are now 2.7 percent ahead of 2019’s record pace.
According to HAR, total active listings, or the total number of available properties, dropped 19.4 percent from July of last year. Total sales on the other hand increased 25% to 13,043 from July 2019. As a result, the absorption rate for July 2020 was 36% compared to 12% in July of 2019.
Days on Market (DOM), or the number of days it took the average home to sell, was flat from last month at 56 days. Due to a slowdown in new listings, single-family home inventory continues to fall, with 3-months supply in July versus 4.2-months a year ago. For perspective, housing inventory across the U.S. stands at a 4 months supply, according to the most recent report from the National Association of Realtors (NAR). Houston’s inventory level is the lowest level we have seen for July in over 10 years.
**Months inventory estimates the number of months it will take to deplete current active inventory based on the prior 12 months sales activity. This figure is representative of the single-family homes market.
At this point, Houston’s real estate market has rebounded completely and outperforming 2019. Although mortgage rates have increased slightly over the past week, they remain near historic lows. The low inventory levels provide a great opportunity for sellers who are looking for a relatively quick sale, and in certain markets, maximize value. For buyers, the low-interest rates provide a historic opportunity to lock in long term rates near unprecedented levels.
Real Estate remains individual and local. Make sure to connect with an agent who knows your market. For more information on why it is so important to hire a qualified Realtor, read our recent article titled, Why working with a Pro is essential.