Stay-at-home orders and social distancing take a toll on home sales and rentals, but pricing holds up
HOUSTON — (May 13, 2020) — The Houston real estate market’s strong start to the new year was abruptly interrupted in April as the full impact of the coronavirus outbreak was felt across Texas and the rest of the country. Stay-at-home directives and social distancing weighed on the market as Realtors® began transitioning to virtual open houses and virtual property showings that enabled consumers to safely and conveniently market and tour homes on HAR.com.
Prior to April, home sales had been outpacing 2019’s record volume as consumers took advantage of historically low interest rates. Despite the slowdown in April, year-to-date sales are still running 1.4 percent ahead of last year’s level.
Homes in every pricing category suffered losses, with the steepest declines at the low and high ends of the market. Leases of single-family homes also took a hit.
According to the latest monthly Market Update from the Houston Association of Realtors (HAR), 6,199 single-family homes sold in April compared to 7,666 a year earlier, representing a 19.1 percent decline and ending a nine-month run of positive sales. Pricing, however, showed little impact. The single-family home median price (the figure at which half of the homes sold for more and half sold for less) rose 2.4 percent to $251,000, the highest price ever for an April. The average price was statistically flat at $310,331.
Sales of all property types totaled 7,192, down 21.6 percent from April 2019. Total dollar volume for the month fell 20.4 percent to slightly more than $2.1 billion.
“We were bracing for a rough report and we got it, and the numbers are likely to remain this way until more Realtors® and consumers adapt to the use of virtual technology through HAR.com to safely market, tour and purchase or rent homes,” said HAR Chairman John Nugent with RE/MAX Space Center. “There is definitely no lack of consumer interest in real estate, as property listing views on HAR.com are up almost 60 percent from this time last year.”
In his revised Houston economic forecast on April 30, Stewart Title Chief Economist Ted C. Jones, Ph.D. predicted that second quarter homes sales would show declines of 35 percent as a result of the pandemic and full-year 2020 sales would be down 25 percent. Dr. Jones’ complete forecast, entitled “And the Beat Goes On: Pandemics & Seismic Events,” is available as a video on the HAR Facebook page.
Lease Property Update
The coronavirus pandemic also slowed lease property activity across the greater Houston area in April. Leases of single-family homes fell 4.1 percent year-over-year while leases of townhomes and condominiums dropped 9.5 percent. The average rent for single-family home was down 1.7 percent to $1,765 while the average rent for townhomes and condominiums was down 1.2 percent to $1,565.
April Monthly Market Comparison
The COVID-19 effect on the Houston real estate market drove most gauges into negative territory in April. Single-family home sales, total property sales and total dollar volume all declined compared to April 2019, however the median price rose to a new April record. Pending sales fell 17.6 percent due to market uncertainty, but total active listings, or the total number of available properties, were statistically unchanged at 41,151.
Single-family homes inventory was down as strong demand during the first quarter sopped up housing supply that was never backfilled by new listings. Inventory registered a 3.6-months supply in April, down from a 3.9-months supply a year earlier. For perspective, housing inventory across the U.S. stands at a 3.4-months supply, according to the most recent report from the National Association of Realtors® (NAR).
Single-Family Homes Update
Single-family home sales tumbled 19.1 percent in April with 6,199 units sold throughout greater Houston compared to 7,666 a year earlier. That ended nine consecutive months of positive sales that had the 2020 real estate market outpacing 2019’s record volume. However, positive sales momentum during the first quarter of the year kept year-to-date sales 1.4 percent ahead of 2019’s record volume in April. The median price reached the highest level ever for an April, increasing 2.4 percent to $251,000. The average price was statistically unchanged at $310,331.
Days on Market (DOM), or the number of days it took the average home to sell, remained unchanged at 58 days. Inventory registered a 3.6-months supply compared to 3.9 months a year earlier, but is above the current national inventory level of 3.4 months reported by NAR.
Broken out by housing segment, April sales performed as follows:
HAR also breaks out sales figures for existing single-family homes. Existing home sales totaled 4,854 in March, down 19.8 percent compared to the same month last year. The average sales price was unchanged at $299,899 while the median sales price edged up 3.3 percent to $237,500.
Townhome and condominium sales, which staged three strong months until a 1.5 percent year-over-year decline in March, plunged 37.5 percent in April, with 376 units sold compared to 602 one year earlier. The average price jumped 11.9 percent to $227,577 while the median price soared 12.2 percent to $181,750. Inventory grew slightly from a 4.4-months supply to 4.5 months.
Houston Real Estate Highlights in April