Real Estate Rumblings

Rich Man's Market: Houston home sales jump again — with $500,000 plus houses leading the charge

Rich Man's Market: Houston home sales jump again with 500K plus power

home prices home sales off the chart
Home prices have gone off the charts. Sozdaniye-Saytov.tecama.ur

Houston’s home prices escalated more than 10 percent over the last year while the supply of available homes has been extremely tight.

The Houston Association of Realtors reports the median home sale price in August was $206,000, up 10.4 percent over August of last year when the median price was $186,510.

Home sales remain brisk as thousands of people move to Houston for new jobs created by the energy industry and other businesses.

 Sales were robust at the upper-end of the Houston housing market, with a 16 percent increase in sales for homes priced at $500,000 and up. 

The housing market typically tails off in August as back-to-school concerns dampen the momentum for many families. But this August was the strongest August on record with 7,505 home sales, up one percent from August of 2013.

Sales were robust at the upper-end of the Houston housing market, with a 16 percent increase in sales for homes priced at $500,000 and up.

“We had a great August, an amazing, record breaking August,” says Cheri Fama, president of John Daugherty Realtors, which handles many sales in River Oaks, West University Place and Memorial. “Usually August slows down with school starting, but for us it didn’t this year.”

Houston home prices have been running at or near record-highs throughout the summer, according to HAR. The August median home price of $206,000 is not far below the all-time record of $214,000 reported in June. By comparison, 10 years ago, in August 2004, the median home price in Houston was $139,000, according to HAR records.

A steady stream of new listings on the market fueled the sales activity in August, says HAR chair Chaille Ralph of Heritage Texas Properties.

“The Houston housing market is going strong as we transition from summer to fall, and enough new listings have hit the market over the past month to keep inventory levels stable,” Ralph says.

HAR’s months of inventory statistic, which projects how long it will take to deplete current active housing inventory based on the previous 12 months of sales activity, matched July’s 3.0-months supply, but was down slightly compared to the 3.3-months supply of last August. Houston’s housing supply is razor-thin compared to many other parts of the country. The national supply currently is 5.5 months of inventory.

The housing inventory dwindled during the recession when home builders curtailed new construction. Then Houston’s economy reignited and builders took time to crank up home building again and a shortage of tradesmen and lots developed. That created the situation where demand exceeded supply and it pushed up prices.

The demand for homes remains high as thousands of people relocate to Houston every month. Houston led the nation in job growth over the last 12 months, creating 112,200 jobs. That strong job growth churns Houston’s housing market into a froth of demand.

Ralph Bivins, editor of Realty News Report, is a past president of the National Association of Real Estate Editors.