Lack of inventory leaves consumers few homes to buy

HOUSTON - A shortage of available homes priced at 250,000 and below combined with frenzied shopping among high-end homes produced a surge in pricing when compared to a Houston housing market in the grips of a pandemic-related lockdown a year earlier, in March 2020. 

Home prices continue to climb this spring in Texas and for most of the country. The current market shows no signs of crashing. There is not enough inventory, and the demand to purchase homes remains strong. The result is the homes that are currently listed are bid up with multiple offers, leading to higher prices.

Record low-interest rates continued to fuel the buying bonanza, leading to multiple offer maddens. 

According to the latest Houston Association of Realtors (HAR) Market Update, single-family homes sales jumped 24.4 percent in March with 9,347 units sold versus 7,511 a year earlier. That marks the tenth straight positive month of sales. On a year-to-date basis, homes sales are running 16.9 percent ahead of 2020’s record pace.

It is easy to see the number of active listings in the Houston Region are down over the past 4 years. 

Homes priced between 500,000 and 750,000 led the way in sales volume in March with a 96.8 percent year-over-year surge. That was followed by the luxury segment (750,000 and above), which soared 89.9 percent. With high-end home shopping dominating the market, pricing was pushed to historic highs. The single-family home average price climbed 19.9 percent to 370,847 and the median price increased 16.0 percent to 290,000.

Sales of all property types totaled 11,692 – up 31.5 percent from March 2020. Total dollar volume for the month shot up 55.8 percent to 4.0 billion. 

“Several overlapping market forces propelled us to a strong finish in March, between a lack of low-to-mid-range housing and aggressive high-end buying by consumers taking advantage of historically low interest rates,” said HAR Chairman Richard Miranda with Keller Williams Platinum. “The inventory shortage is causing stress for many folks. Hopefully, we begin to see an uptick in new listings sooner than later.”

According to the “Housing Investor Mania 2.0” report from John Burns Real Estate Consulting, 24 percent of all homes recently purchased in the Houston market were bought by investors. 

Single-family home sales rose 24.4 percent in March with 9,347 units sold across the greater Houston area compared to 7,511 a year earlier. Strong sales volume among homes at the high end of the market pushed pricing to record highs. 

The single-family home average price climbed 19.9 percent to 370,847 while the median price rose 16.0 percent to 290,000. 

 Selling a home took significantly less time than it did a year ago. Days on Market (DOM) fell from 65 to 45. With fewer new listings entering the market, inventory registered a record low 1.4-months supply compared to 3.4 months a year earlier. That figure is slightly below the current national inventory level of 2.0 months recently reported by NAR. Broken out by housing segment, March sales performed as follows:

• 1 - 99,999: decreased 25.9 percent
• 100,000 - 149,999: decreased 31.7 percent
• 150,000 - 249,999: decreased 7.8 percent
• 250,000 - 499,999: increased 50.7 percent
• 500,000 - 749,999: increased 96.8 percent
• 750,000 and above: increased 89.9 percent

HAR also breaks out sales figures for existing single-family homes. Existing home sales totaled 7,463 in March, up 29.1 percent compared to the same month last year. The average sales price jumped 21.4 percent to 364,037 while the median sales price climbed 21.2 percent to 285,000.  

• Single-family home sales increased for the tenth consecutive month, up 24.4 percent year-over-year with 9,347 units sold;
• The Days on Market (DOM) figure for single-family homes dropped from 65 to 45;
• Total property sales shot up 31.5 percent with 11,692 units sold;
• Total dollar volume soared 55.8 percent to 4.0 billion;
• The single-family average price reached a record high, rising 19.9 percent to 370,847; 
• The single-family median price climbed 16.0 percent to 290,000 – also a record high; 
• Single-family homes months of inventory registered an historic low 1.4-months supply, down from 3.4 months year-over-year and below the national inventory of 2.0 months;
• On a year-to-date basis, single-family homes sales are running 16.9 percent ahead of 2020’s record pace.

Townhouse/Condominium Update Sales of townhouses and condominiums increased for the seventh straight month in March, rocketing 45.2 percent with 790 closed sales versus 544 a year earlier. The average price increased 7.6 percent to 242,063 and the median price rose 5.3 percent to 195,000. Inventory fell from a 4.2-months supply to 2.9 months. 

• Townhome/condominium sales jumped 45.2 percent with the average price up 7.6 percent to 242,063 and the median price up 5.3 percent to 195,000;
• Single-family home rentals fell 17.9 percent with the average rent up 8.8 percent to 1,944; 
• Townhome/condominium leases rose 5.7 percent with the average rent up 6.8 percent to 1,720.

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