As 2023 came to an end, the Houston real estate market received a welcome boost with the first increase in sales in 19 months. Additionally, lower mortgage rates, stable inventory, and stable-to-higher prices in most Houston neighborhoods, all provide signs of a good start for 2024.
Norhill’s Key Insights from the Houston Association of Realtors (HAR) December 2023 Market Update:
Single-Family Home Sales
Sales declined by 12.0% to 83,854 units in 2023, marking the second consecutive negative year. December alone saw a 6.2% drop in sales, following a surprising 4.7% increase in November, the first positive movement in 19 months. Pending Sales showed more positive signs, with new contracts for Single Family Homes up 14.5% compared to December 2022.
Sales continued to decline throughout 2023, with a 7.0% drop in December. Pending Sales for Single Family Homes were up 14.5% compared to December 2022.
The median price of single-family homes in December remained flat at $330,000, with the average price also unchanged at $407,817. Townhome prices rose by 6.7% to $258,137, and the median price increased by 9.3% to $235,000.
Inventory levels for single family homes rose to a 3.3-months supply in December, nearing the national average of 3.5 months. For townhomes, inventory expanded from a 2.0-months supply to 3.5 months. At current supply, inventory is now more in line with pre-pandemic levels.
Likely to Sell
According to HAR, total active listings, or the total number of available properties, increased 13.9 percent to 38,028. December sales of all property types totaled 7,395 down 4.9 percent compared to December 2023. As a result, the absorption rate, which is a measure of any given home’s likelihood to sell, for December 2023 was 18 percent. As we’ve seen throughout the year, Absorption rates have fallen back to levels we saw before the pandemic and have remained consistent since October.
Days on Market
Days on market slightly decreased from 57 to 56 days, year-over-year. Due to the holidays, the days on market in December usually see a slowdown.
The Houston housing market faced its second consecutive year of challenges in 2023, largely due to the highest mortgage rates in two decades, leading many potential buyers to either postpone purchases or opt for rentals. Despite these hurdles, the market showed resilience with growth in inventory and stabilization in pricing. With recent declines in mortgage rates, we anticipate both the 1st and 2nd quarters of 2024 are going to be active markets.
Connecting with a local realtor is a good way to get started on your homebuying journey in 2024 and contacting one of Norhill’s amazing Realtors is a good place to start. They can guide you through the market trends in your desired neighborhoods and advise on the best times to buy or sell. Fill out the form to get started.