Real Estate Trends

Condo sales slip slightly in Houston, but demand for existing units remains strong

Condo sales slip slightly in Houston, but demand remains strong

Metropolis Lofts Houston mid-rise condo
Condo sales slipped slightly in Houston for the first five months of the year. Houston Association of Realtors

A new report shows that home sales in one particular category have slowed — to the tune of an overall decrease (gasp!) in the state of Texas. According to the 2015 Texas Condominium Mid-Year Sales Report, the state's four major markets (Austin, Dallas, Houston and San Antonio) experienced an average 1 percent decrease in condo sales between January and May 2015 when compared to the same time period in 2014.

Why? Well, Austin is dragging us all down. In the state capital, only 1,178 condos and townhomes were sold — a 12 percent decrease from the same time period in 2014. The median condo price, however, increased 4 percent year-over-year from $214,480 to $222,000.

 The total condos sold in the Houston area from January to May was 2,668 and the average number of days a condo spent on the market before being sold was 51, which is 9 percent less that the previous year. 

Condo sales in Houston dipped slightly, decreasing 1 percent, while condo prices remained unchanged at $145,000. The average price for a condo in Houston is $197,635, a 2 percent increase over the corresponding period last year, and the average price per square foot is $17, up 4 percent.

The total condos sold in the Houston area from January to May was 2,668 and the average number of days a condo spent on the market before being sold was 51, which is 9 percent less that the previous year.

In Dallas, 2,454 condos and townhomes were sold between January and May 2015, for a modest 3 percent increase over 2014. The median condo price increased 7 percent year-over-year to $171,020.Like Dallas, San Antonio saw an increase in sales and prices. In fact, prices there rose 9 percent to $189,900, and sales increased 6 percent. But that equates to only 288 units sold.

Experts stated that part of that is due to the high cost of new units.

"The land and development costs for condominiums in Texas' metro areas are so high that new condos being built today are priced outside of an affordable price range," said Dr. Jim Gaines, an economist with the Real Estate Center at Texas A&M University. "Existing condos, by comparison, are priced significantly less than new condos and therefore have a much higher demand and tighter inventory."

As is the story with the Houston real estate market in general, affordability is a growing concern for condos. Higher prices "could be impacting some Texas homebuyers' ability to afford condos, especially in our state's metro areas," said Scott Kesner of the Texas Association of Realtors.