Pent-up demand resulting from COVID-19 boosts home sales, providing a welcome, but possibly brief respite from the pandemic’s effects
HOUSTON — (July 8, 2020) — A flurry of homes going under contract in May after COVID-19-related stay-at-home orders expired led to a surge of closings in June, driving home sales volumes back up to levels considered more normal for summertime in Houston – and even beyond 2019’s record pace. However, renewed coronavirus concerns, stemming from a spike in cases across greater Houston and in other parts of Texas, may bring this taste of normalcy to an end by the fall.
According to the latest Market Update from the Houston Association of Realtors (HAR), 9,328 single-family homes sold in June compared to 8,063 a year earlier. That translated to a 15.7 percent jump – a strong rebound from two straight months of declines brought on by coronavirus and ongoing strains in the energy industry.
Homes priced between $250,000 and $500,000 led the way among all housing segments, soaring 28.3 percent year-over-year. The second-best performer consisted of homes in the $500,000 to $750,000 range, which jumped 18.6 percent. Year-to-date sales are now on par with 2019’s record pace after lagging by 4.3 percent in May.
The single-family home median price increased 3.6 percent to an historic high of $262,000 while the average price dipped less than one percent to $319,881.
Sales of all property types totaled 11,153, up 18.3 percent from June 2019. Total dollar volume for the month increased 15.1 percent to $3.3 billion. Leases of single-family homes were another bright spot in HAR’s monthly report, climbing more than 15 percent.
“Coronavirus has driven the Houston housing market into uncharted territory, however, we do know for certain that consumers have shown unwavering interest in real estate since the pandemic began,” said HAR Chairman John Nugent with RE/MAX Space Center. “HAR’s early introduction of virtual open houses and virtual showings has enabled consumers to forge ahead with house-hunting plans without compromising health and safety, and historically low interest rates have remained a strong incentive to buy.”
For the latest weekly report on housing market trends throughout the greater Houston area, please see the HAR Weekly Activity Snapshot for the week ending July 6, available HERE as a downloadable PDF file.
Lease Property Update
June leases of single-family homes surged 15.3 percent year-over-year. However, leases of townhomes and condominiums were flat. The average rent for single-family homes was down 1.0 percent to $1,906 while the average rent for townhomes and condominiums rose 7.9 percent to $1,731.
June Monthly Market Comparison
Pent-up demand resulting from coronavirus-related stay-at-home orders in March and April helped boost pending listings in May, paving the way for a surge in closings in June that drove sales volume up to levels typically seen in Houston over a COVID-free summer. Single-family home sales, total property sales and total dollar volume all rose compared to June 2019. Pending sales rocketed 39.3 percent, suggesting the likelihood of another strong sales month for July. Total active listings, or the total number of available properties, fell 17.5 percent.
With an ongoing slowdown in new listings to the marketplace and an increase in homes going under contract, single-family homes inventory shrank to a 3.2-months supply in June versus 4.3-months a year earlier. For perspective, housing inventory across the U.S. stands at a 4.8-months supply, according to the most recent report from the National Association of Realtors (NAR).
Single-Family Homes Update
Single-family home sales shot up 15.7 percent in June, with 9,328 units sold across greater Houston compared to 8,063 a year earlier. That reversed two straight monthly declines as a result of the COVID-19 pandemic with additional impact from the strained energy industry. On a year-to-date basis, sales now match last year’s record pace. The single-family home median price rose 3.6 percent to an all-time high of $262,000 while the average price decreased a fractional 0.6 percent to $319,881.
Days on Market (DOM), or the number of days it took the average home to sell, rose from 50 to 56. Inventory registered a 3.2-months supply compared to 4.3 months a year earlier and is below the current national inventory level of 4.8 months recently reported by NAR.
Broken out by housing segment, June sales performed as follows:
$1 – $99,999: decreased 16.3 percent
$100,000 – $149,999: decreased 3.9 percent
$150,000 – $249,999: increased 9.8 percent
$250,000 – $499,999: increased 28.3 percent
$500,000 – $749,999: increased 18.6 percent
$750,000 and above: decreased 10.6 percent
HAR also breaks out sales figures for existing single-family homes. Existing home sales totaled 7,420 in June, up 11.3 percent compared to the same month last year. The average sales price fell 0.8 percent to $311,408 while the median sales price rose 3.1 percent to $250,000.
Townhome and condominium sales rebounded from three straight months of declines, rising 1.9 percent versus June 2019. A total of 590 units sold compared to 579 one year earlier. The average price tumbled 5.4 percent to $212,216 and the median price fell 1.8 percent to $174,350. Inventory narrowed from a 4.8-months supply to 4.3 months.
Houston Real Estate Highlights in June
Single-family home sales rebounded from two consecutive monthly declines, jumping 15.7 percent year-over-year with 9,328 units sold;
The Days on Market (DOM) figure for single-family homes grew from 50 to 56 days;
Total property sales soared 18.3 percent with 11,153 units sold;
Total dollar volume climbed 15.1 percent to $3.3 billion;
The single-family home median price set a new record high of $262,000 as it rose 3.6 percent year-over year;
The single-family home average price declined 0.6 percent to $319,881;
Single-family homes months of inventory was at a 3.2-months supply, down from 4.3 months last June and below the national inventory level of 4.8 months;
Townhome/condominium sales reversed three monthly declines, rising 1.9 percent, with the average price down 5.4 percent to $212,216 and the median price down 1.8 percent to $174,350;
Single-family home rentals jumped 15.3 percent with the average rent down 1.0 percent to $1,906;
Volume of townhome/condominium leases was unchanged with the average rent up 7.9 percent to $1,731.