Sales volume climbs for an eighth consecutive month and the $250K-$500K price range is the sweet spot
HOUSTON — (March 11, 2020) — The Houston real estate market built upon its strong 2020 start by registering an eighth consecutive month of positive home sales in February. Consumer activity was once again largely fueled by some of the lowest interest rates of all time. Single-family homes priced between $250,000 and $500,000 led the way in February sales followed by homes priced at or above $750,000, which comprise the luxury market. Leases of single-family homes also registered gains during the month.
According to the latest monthly Market Update from the Houston Association of Realtors (HAR), 6,044 single-family homes sold in February compared to 5,339 a year earlier, accounting for a 13.2 percent increase. The single-family home median price (the figure at which half of the homes sold for more and half sold for less) rose 5.2 percent to $245,000 and the average price climbed 5.9 percent to $301,648. Both figures represent the highest prices ever for a February.
Sales of all property types totaled 7,393, up 14.9 percent from February 2019. Total dollar volume for the month jumped 19.4 percent to slightly more than $2.1 billion.
“The Houston housing market gained momentum in February, thanks largely to record low mortgage rates that some economists say could drop even further,” said HAR Chairman John Nugent with RE/MAX Space Center. “Concerns have been raised about the possible effects the coronavirus outbreak might have on our real estate market and others around the country, and that is something HAR is monitoring. Coronavirus was not a factor in the February housing data, but obviously with the losses that Wall Street has suffered as well as declining oil prices, we are keeping a watchful eye on housing market activity.”
Stewart Title Chief Economist Ted C. Jones, Ph.D., who provides economic forecasting services to HAR, anticipates “no measurable impact from coronavirus on Houston real estate” after performing an analysis of the market impacts of two pandemics (SARS and H1N1/Swine Flu) as well as the September 11 terrorist attacks. Noting that the aftermath of 9/11 coincided with SARS, and H1N1 coincided with the Great Recession, Dr. Jones said, “The pandemic or seismic event probably magnified or extended the trends of the time, but the total changes from the prior and the following year could not solely be attributed to the event. Hopefully that is same result for the coronavirus.” His complete analysis is available at http://bit.ly/39IRKNq.
Lease Property Update
February delivered a mixed performance for the lease property segment of the marketplace. Leases of single-family homes rose 5.8 percent year-over-year, however leases of townhomes and condominiums fell 2.2 percent. The average rent for single-family homes ticked up 1.8 percent to $1,768 while the average rent for townhomes and condominiums increased 3.5 percent to $1,607.
February Monthly Market Comparison
With the exception of inventory, which lowered slightly due to strong consumer demand, February indicators for the Houston real estate market were up across the board. Single-family home sales, total property sales and total dollar volume all rose compared to February 2019, and pricing levels achieved February highs. Month-end pending sales for single-family homes totaled 8,547. That is a 28.0 percent jump over last year. Total active listings, or the total number of available properties, rose 3.8 percent to 40,091.
Single-family homes inventory recorded a 3.5-months supply in February, down fractionally from a 3.6-months supply a year earlier. For perspective, housing inventory across the U.S. stands at a 3.1-months supply, according to the most recent report from the National Association of Realtors (NAR).
Single-Family Homes Update
Single-family home sales rose 13.2 percent in February with 6,044 units sold throughout greater Houston compared to 5,339 a year earlier. This marks the eighth straight month of positive sales. Prices reached the highest levels ever for a February. The median price increased 5.2 percent to $245,000. The average price rose 5.9 percent to $301,648.
Days on Market (DOM), or the number of days it took the average home to sell, remained unchanged at 68 days. Inventory registered a 3.5-months supply. That compares to 3.6 months a year earlier and is above the current national inventory level of 3.1 months reported by NAR.
Broken out by housing segment, February sales performed as follows:
HAR also breaks out sales figures for existing single-family homes. Existing home sales totaled 4,743 in February, up 11.8 percent compared to the same month last year. The average sales price increased 5.8 percent to $287,891 while the median sales price rose 6.5 percent to $230,000.
For the third straight month, sales of townhomes and condominiums were in positive territory, climbing 12.8 percent versus February 2019, with 477 units sold compared to 423 one year earlier. The average price jumped 14.5 percent to $216,170 while the median price rose 16.5 percent to $176,500. Inventory was unchanged at a 4.1-months supply.
Houston Real Estate Highlights in February