Up 29 percent

The Houston real estate market is in an all-time frenzy: Home sales continue to skyrocket

The Houston real estate market is in an all-time frenzy: Home sales continue to skyrocket

Shelby, On the Market, 405 Timberwilde Lane, December 2012
Homes Inside the Loop, Memorial, Katy, Meyerland and Bellaire are very strong, but the positive surge is widespread in Houston area markets, with the upper-end market exceptionally hot. Photo courtesy of John Daugherty, Realtors

The pace of Houston home sales has never been brisker, as a super-low supply of homes for sale is igniting bidding wars for houses in many neighborhoods. Sellers are getting offers from multiple buyers on the day their house goes up for sale. And home prices are going up fast.

The inventory of homes for sale is at its lowest point since 1999, according to the Houston Association of Realtors.

Historically, January is a slow month for Realtors. But not this January.

 Historically, January is a slow month for Realtors. But not this January. 

January property sales in Houston totaled 4,680, a 29 percent increase over January of last year, the Realtors Association Reported.

“This market is in an unbelievable frenzy. I’ve never seen a market like this,” says Bernstein Realty owner Amy Bernstein, a 30-year veteran of Houston realty.

“The majority of homes that come on the market today and are priced right — or even priced a little high — are getting multiple offers on the first day." Bernstein says she has received as many 12 offers from would-be buyers vying for the same house.

In some cases, buyers are submitting offers even before the house officially goes on the market, just based on scuttlebutt that the house will be put up for sale soon.

Housing inventory in Houston shriveled to 3.6 months in January, the lowest level since December 1999, the Realtors association reported. The inventory of homes for sale is down 20 percent from January of 2012.

The shrinking inventory is a concern to Danny Frank, chairman of the local Realtors association. “We are maintaining a watchful eye on the local housing supply because a significant decline from current inventory levels could potentially have an adverse effect on sales and drive prices disproportionately higher,” Frank says.

 In some cases, buyers are submitting offers even before the house officially goes on the market, just based on scuttlebutt that the house will be put up for sale soon. 

Prices are already going up. Last month’s average sales price of $200,296 was the highest ever recorded in Houston in a January, the association reports.

Exceptionally low mortgage rates, with 30-year home loans available at less than a four percent interest rate, are the lowest in 50 or 60 years. The Houston economy is adding a significant number of new jobs and people in the energy business are being relocated here. Combined with a tight inventory and robust consumer confidence, the conditions are just right for a realty boom.

Homes inside the Loop, Memorial, Katy, Meyerland and Bellaire are very strong, but the positive surge is widespread in Houston area markets.

Home builders are very active and their pursuit of tear-down lots in the Inner Loop is relentless. Houston is leading the nation in home building construction permits. Builders are sending letters to owners of older homes, just to see if the owner may be ready to sell.

The upper-end market is exceptionally hot. In January, the sales of houses priced above $500,000 and into the million-plus bracket were up 52 percent over January of 2012, the association reported.

The market is not expected to cool down anytime soon. The sales pending at the end of January were up 13 percent over January of last year, signaling that the spring selling season will be excellent. In short, Realtors are going to be running fast for a while.

Ralph Bivins is a former president of the National Association of Real Estate Editors.