Real Estate Rumblings

Luxury home sales explode in Houston: $5 million-plus palaces are suddenly a hot ticket

Luxury home sales explode in Houston: $5 million digs are a hot ticket

River Oaks mansion for sale 2604 Del Monte Drive
Luxury home sales are on fire in Houston. (Pictured: 2406 Del Monte Drive, on the market at $8 million) Houston Association of Realtors

Houston home sales continued to be hot in March, led by the luxury market, which is absolutely on fire.

The Houston realty market continues to outpace the sales of 2013, which was the best year ever for home sales. Single-family home sales in March were up about 4 percent over March of last year, according to the Houston Association of Realtors.

“It’s not slowing down any that’s for sure, and we’re certainly seeing a very positive movement in the upper-end,” says Cheri Fama, president of John Daugherty Realtors. “Everything is busy. But there’s been more movement in the $5 million and above market in the last few months than in quite some time.”

Home sales in the $500,000 and up bracket were up 28 percent over March of last year, the Houston Association of Realtors reports.

 “Everything is busy. But there’s been more movement in the $5 million and above market in the last few months than in quite some time.” 

Fama says the appeal of luxury Houston real estate as an investment is luring well-heeled home buyers with fortunes amassed in energy, investment banking and other lucrative fields.

Across Houston, the inventory of home for sale in all price ranges is at an all-time low. The supply of homes first reached 2.6 months of inventory in December 2013 and has held steady at that low point ever since. The national home inventory is much higher — a 5.2-month supply.

Sellers continue to receive multiple offers for homes for sale in many neighborhoods.

The tight supply and high demand is driving up prices. The average price of a home sold in March was $261,329, up 11 percent from last March, the Houston Realtors reported.

Despite the continual trend for increases in home prices, Houston has a strong ranking in affordability. A report released this week by ZIPRealty, a national online real estate company, Houston ranked No. 8 in an affordability index that blends home prices and the area’s average household income.

The 5,971 homes sold in March represented the highest monthly sales total for Houston since September.

“Houston home sales rose again in March, with most of the buying taking place at the higher end of the market,” says HAR chair Chaille Ralph with Heritage Texas Properties. “We are happy that there hasn’t been any further decline in the local supply of homes and are hopeful that new construction and seasonal spring listings will help our inventory grow.”