Mortgage rates remain at or near all-time lows and homebuyers continued to take advantage. The historic summer boom in Houston’s real estate market remained through September. The luxury home market was particularly boomy, while midmarket prices remain robust as well. With all of this activity, inventory levels have hit their lowest levels in over 10 years. Helping to push up prices and speed up home sales in most Houston neighborhoods.
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 continue to outpace 2019 by a big margin. Based on recent numbers, year to date pending sales are up almost 7% from the same point in 2019. This despite the huge dip we saw at the height of Houston area lockdowns.
According to the Houston Association of Realtors, single-family home sales across greater Houston totaled 9,101 in September compared to 7,050 a year ago, a 29.1 percent jump. The luxury market (i.e. homes priced at $750,000 and above) performed the best with an 81.5 percent! jump compared to 2019. Homes priced between $500,000 and $750,000 also performed very well jumping 58.1 percent year-over-year.
Home prices in September hit historic levels. The single-family home median price climbed 8.3 percent to $265,000 while the average price rose 10.1 percent to $334,256.
According to HAR, total active listings, or the total number of available properties, dropped 25.4 percent from September of last year. Total sales on the other hand increased 31.9% to 11,137 from September 2019. As a result, the absorption rate for July 2020 was 35% compared to 20% in September of 2019. That’s Brawny paper towel level absorption!
Days on Market (DOM), or the number of days it took the average home to sell, lowered from 56 to 51. Due to a slowdown in new listings, single-family home inventory continues to fall, with 2.5 months supply in September versus 3.9-months a year ago. For perspective, housing inventory across the U.S. stands at a 3 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 September 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.
As predicted, the fall market has been a great time to sell so far. As long as inventory levels remain low and mortgage rates remain near current levels, we are more than likely going to see quick sales at higher prices. If you are looking to buy or sell a home, let us know. Every market and situation is different and we are happy to help you evaluate your options to determine if now is the right time for you.