Home sales always taper off in the fall as kids go back to school and the sizzle of the summer dies out. But this year, September remained robust, according to Houston Association of Realtors statistics.
Single-family home sales were up 23.5 percent in September, compared to September of last year.
A total of 6,168 houses were sold. It was the highest sales total for a September ever recorded in Houston, according to statistics from the Realtors association. Houston’s real estate market has been on an extended roll, registering 28 consecutive months of increased sales.
"It’s not showing any signs of slowing down. It’s still clipping along at a brisk pace.”
When will the phenomenal surge end?
“I get asked that question several times a day. But it’s not slowing any signs of slowing down,” says Amy Bernstein of Bernstein Realty. “It’s still clipping along at a brisk pace.”
The relocation business remains very strong as companies transfer employees into Houston from other cities, Bernstein says. The newcomers are buying new construction homes in the suburbs for people who work in the Energy Corridor or The Woodlands. But many newcomers who work downtown are buying homes in the inner city, Bernstein says.
The federal government shutdown has not made a dent in real estate market so far, local realty agents say. Houston’s economy created 81,000 new jobs over the last year, mortgage interest rates remain under five percent and the inventory of homes for sale is exceptionally tight.
No Stopping This Roll
Unless there is an economic crash generated by a failure to resolve the debt ceiling conflict in Congress, the rest of the year looks good for realty.
"The Houston housing market has had remarkable growth throughout 2013, and we've certainly experienced steady growth throughout much of the year," says Tom Anderson, executive vice president and partner of Martha Turner Properties. Anderson, who’s been working in Houston realty for decades, says the market is on track for continued strength for the remainder of 2013.
Foreclosures have dwindled to only seven percent of sales, down from about 20 percent at the beginning of the year.
Houston currently has about a 3.2 months supply of homes for sale, down from a 4.7 months supply a year ago. When the supply is this tight, homes in some of the hottest markets will receive multiple offers and be sold within a few days.
The small inventory of homes for sale continues to drive up home prices. The median price of a single-family home — the midpoint figure at which half the homes sold for more and half for less — rose 10.2 percent to $181,750. The average price increased 13.1 percent year-over-year to $248,256. Both figures represent the highest prices for a September in Houston.
Foreclosures have dwindled to only seven percent of sales, down from about 20 percent at the beginning of the year. Investors had been buying up thousands of houses over the last few years, but their fervor will subside as prices go higher and cheap foreclosure opportunities diminish.
Newly built homes are still selling in the suburbs. And in the Inner Loop and Memorial areas, lot demand is high from home builders who want to tear down old homes and build new ones. Lot prices are soaring in places like West University Place and Bellaire.
The shift into seasonal slowdown is beginning. November, December and January are typically the slowest months of the year. Fewer people will decide to put their home up for sale during the fourth quarter, so inventory is going to remain tight. If they have a choice, sellers will delay trying to sell their home until after the holidays.
A national economic crisis could derail the market, as could a huge jump in mortgage rates or slowdown in the local economy. Nothing lasts forever. But for now, the Houston housing market is one of the strongest in the nation and it is expected to remain at the top for many more months.
Ralph Bivins, former president of the National Association of Real Estate Editors, is founding editor of Realty News Report.