The Houston housing market, facing a stiff headwind from a tougher economy, started the New Year with a brave performance. Overall, home sales were down only 2 percent in January, compared to the same period last year, the Houston Association of Realtors reports.
The market for Houston’s more expensive homes seems to be whacked the hardest as affluent homebuyers grapple with the falling oil prices and widespread layoffs at energy companies.
“The high-end market is the softest market right now,” says Houston realty broker Shad Bogany of Better Homes and Gardens Gary Greene. “We are seeing some slowness because oil and gas is beginning to catch up with us. Oil is down to $28 a barrel right now.”
Sales of homes priced at $500,000 and up were down over 9 percent in January, HAR reports.
Home prices increase
At the end of the year, 1,100 Houston homes priced at $1 million or more were on the market for sale. That was a 28 percent increase over the $1 million and up inventory at the end of 2014. The increase in sales inventory indicates the mansion market is starting to stumble.
"A lot of folks have nervously anticipated that falling oil prices would have a devastating effect on real estate, but so far, the Houston market has weathered the energy downturn without dramatic shifts in sales and pricing,” says HAR Chairman Mario Arriaga with First Group. “The most noticeable impact has been declines in the luxury market, but mid-range housing actually saw a healthy sales volume in January and inventory levels grew."
Home prices increased, too. The median price of a single-family home sold in January was $200,000, up more than 5 percent from a year ago, HAR reports.
The inventory of homes for sale remains fairly tight in the Houston area and many parts of the local economy are strong, says Ted C. Jones, chief economist for Stewart Title of Houston. So 2016 may be less robust than 2015, but the declines are not expected to be severe, Jones says.
“Home sales over the past two years have been great. But 2016 will see a dip in sales because of the comparison to those two record years,” Jones says.
Market fairly healthy
Although condominiums are not a big piece of the housing market, they appear to be selling briskly. The Realtors association reports 393 townhomes and condos were sold in January, up almost 16 percent from the 340 sales reported in January of last year.
In January, 4,024 single-family homes were sold, down 2.1 percent from the 4,109 homes sold in January of 2015, HAR reports. But the growing number of home sales that are already pending as deals to be completed in February indicates that that Houston’s home market is fairly healthy.
Mortgage rates remain low with 30-year home loans at less than 4 percent. The Super Bowl is over and buyers are coming out of hibernation. The spring home buying season is beginning and it appears to be a fairly good one, despite the energy downturn.
Ralph Bivins, founding editor of Realty News Report, is a past president of the National Association of Real Estate Editors.