A lack of housing inventory slows January sales and boosts prices
HOUSTON — (February 18, 2014) — The Houston housing market exhibited the textbook laws of supply and demand in January as low housing inventory meant that there were fewer homes to purchase, but that buyers paid more for the homes that were available.
Home sales edged up 1.7 percent year-over-year the smallest one-month sales increase since June 2011, according to the latest monthly report prepared by the Houston Association of REALTORS®. January single-family home sales totaled 3,957. That is the lowest one-month sales volume since February 2012.
January marked the 32nd consecutive month that sales have remained in positive territory. The supply of homes matched Decembers 2.6 months of inventory, but compared to a 3.6-month supply in January 2013.
The over-$150,000 segments single-family market experienced sales growth in January, however both the sub-$80,000 and $80,000-$150,000 markets recorded declines.
January is traditionally a slow time of year for home sales, but throw a depleted supply of inventory into the mix and you get exactly what the Houston market experienced last month, said HAR Chair Chaille Ralph with Heritage Texas Properties. Until more housing inventory hits the market, we are likely to continue seeing lower sales volume and higher pricing than we did throughout 2013. Its the basic economic principle of supply and demand playing out.
Foreclosure property sales reported in the HAR Multiple Listing Service (MLS) continued its months-long decline, dropping 53.2 percent compared to January 2013. Foreclosures currently make up 9.2 percent of all property sales, down from a 19.6 percent share a year earlier. The median price of foreclosures rose 6.9 percent to $86,625.
January sales of all property types in totaled 4,929, a 5.6 percent increase over the same month last year. Total dollar volume for properties sold rose 26.8 percent to $1.1 billion versus $905 million a year earlier.
Month-end pending sales totaled 3,730, a 3.9 percent gain over last year and another possible indication of a steady but lower volume of sales when the February numbers are tallied. Active listings, or the number of available properties, at the end of January dropped 15.9 percent to 28,211.
January sales of single-family homes in Houston totaled 3,957, up 1.7 percent from January 2013. That marks the 32nd consecutive monthly increase. It also represents the smallest one-month sales increase since June 2011 and the lowest one-month sales volume since February 2012.
Home prices reached the highest levels ever recorded in Houston for a January. The single-family median price climbed 18.0 percent from last year to $177,000 and the average price soared 22.0 percent year-over-year to $244,070.
Broken out by housing segment, January sales performed as follows:
HAR also breaks out the sales performance of existing single-family homes throughout the Houston market. In January 2014, existing home sales totaled 3,396, a 2.1 percent increase from the same month last year. The average sales price rose 23.2 percent year-over-year to $226,424 while the median sales price rose 20.7 percent to $164,800.
January sales of townhouses and condominiums rocketed 35.8 percent from one year earlier. A total of 432 units sold last month compared to 318 properties in January 2013. The average price dipped 1.4 percent to $170,721 while the median price declined 2.3 percent to $131,570. Inventory dropped to a 2.5 months supply versus a 4.0 months supply in January 2013.
Houstons lease property market showed strong gains in January. Rentals of single-family homes jumped 23.6 percent compared to January 2013 while year-over-year townhouse/condominium rentals rose 13.3 percent. The average rent for a single-family home increased 4.3 percent to $1,616 while the average rent for a townhouse/condominium rose 8.3 percent to $1,508.