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Despite low inventory, home sales see gains and prices reach October highs
After a down month in September, directly influenced by the surge in post-Hurricane Harvey home sales exactly one year earlier, the Houston real estate market returned to more normalized conditions in October with gains in both sales volume and pricing.
According to the latest monthly report from the Houston Association of REALTORS® (HAR), 6,716 single-family homes sold in October compared to 6,417 a year earlier. That translates to a 4.7-percent increase. Year-to-date, home sales are 5.3 percent ahead of 2017’s record volume. Inventory grew slightly from a 3.7-months supply to 3.9 months.
The single-family home median price (the figure at which half of the homes sold for more and half for less) rose 3.6 percent to $234,653, and the average price increased 3.5 percent to $294,500. Both represent the highest prices ever for an October. All housing segments experienced gains except for homes priced at $150,000 and below The strongest segment was the luxury market (homes priced at $750,000 and above), which jumped 12.0 percent in October.
Sales of all property types totaled 8,127, up 6.0-percent over the same month last year. October’s total dollar volume increased 9.3 percent to $2.3 billion.
“With August and September home sales figures skewed by the effects of Hurricane Harvey, October seemed to mark a return to normalcy in terms of overall market activity,” said HAR Chair Kenya Burrell-VanWormer with JPMorgan Chase. “However, we are prepared for slower sales as we wrap up 2018, between the tight supply of homes and the fact that we typically see less activity around the holidays.”
Lease Property Update
Activity among lease properties was mixed in October. Single-family home rentals rose 7.3 percent while leases of townhomes and condominiums fell 6.8 percent.
The average rent for single-family homes declined 1.1 percent to $1,754 while the average rent for townhomes and condominiums edged up 1.2 percent to $1,550.
October Monthly Market Comparison
The Houston real estate market registered across-the-board gains in October, with single-family home sales, total property sales, total dollar volume and pricing all up compared to October 2017. Month-end pending sales for single-family homes totaled 7,039, which represents a 5.4 percent increase over last year. Total active listings, or the total number of available properties, climbed 7.3 percent to 41,061. Single-family homes inventory remains tight, reaching a 3.9-months supply in October versus a 3.7-months supply a year earlier. For perspective, housing inventory nationally stands at a 4.4-months supply, according to the latest report from the National Association of REALTORS® (NAR).
Single-Family Homes Update
Sales of single-family homes rose 4.7 percent in October, as 6,716 units sold across the greater Houston area compared to 6,417 a year earlier. Sales volume was also positive when analyzed on a year-to-date basis, running 5.3 percent ahead of 2017’s record pace.
Prices reached the highest levels ever for an October. The median price increased 3.6 percent to $234,653 while the average price rose 3.5 percent to $294,500.
Days on Market (DOM), or the number of days it took the average home to sell, improved to 57 compared to 61 a year earlier. Inventory registered a 3.9-months supply, up slightly from 3.7 months a year ago.
Broken out by housing segment, October sales performed as follows:
HAR also breaks out sales data for existing single-family homes. Existing home sales totaled 5,579 in October, an increase of 6.4 percent versus the same month last year. The average sales price rose 4.9 percent to $282,937 while the median sales price increased 4.8 percent to $220,000.
October was a down month for townhome and condominium sales, which declined 2.9 percent with 534 units sold versus 550 a year earlier. The average price rose 4.9 percent to $206,838 and the median price slid 2.2 percent to $152,900. Inventory grew from a 3.7-months supply to 4.3 months.
Houston Real Estate Highlights in October