Real Estate Rumblings
Houston home prices — and sales — still climbing to record-setting levels
Houston homes sold quickly and home prices rose to record-setting levels in February. The average single-family home price was up more than 12 percent from a year ago, the Houston Association of Realtors reports.
“I think prices will continue to increase as long as inventories are so low and demand remains high,” says housing market analyst Evert Crawford of Crawford Realty Advisors.
The inventory of homes for sale remained at only 2.6-month supply, an extremely tight supply that has existed for the last three months. The inventory of homes for sale has never been lower, the Houston Association of Realtors says.
But it all adds up to a local housing market with an inventory that’s been stripped cleaner than the shelves of a Galveston grocery store before a hurricane.
Buyers have to be very nimble when they find a home they like in their price range. In some neighborhoods, homes are sold within hours of going on the market. Buyers often have to engage other would-be buyers in bidding wars and pay more than list price to get the house they want.
A total of 4,765 homes were sold in February, the second-highest sales total for a February in the history of Houston real estate, the Realtors association reported. Sales last month were up more than 8 percent over the number of homes sold last February.
“We constantly hear that the local housing market is fantastic, great, booming, etcetera,” says housing consultant Pamela Minich, president of Minich Strategic Services. “However, I would contend that the market is great for sellers, but for buyers it is a bit more challenging. Consumers face continually tightening inventories and increasing buyer competition at a time when many are feeling a real sense of urgency about making a purchase before they get priced out of their preferred home-size, type and location.”
The market is tight partly because Houston is gaining jobs faster than any other city in the nation – more than 91,000 new jobs were added over the last year. Energy firms, such as Exxon Mobil, are transferring hundreds of employees to Houston every month. Some Houstonians are delaying making a move and selling their home because they refinanced their home loans at super-low interest rates and they hate to give up those favorable mortgages. And some would-be sellers don’t want to put their home on the market because they know that having to locate and buy a new home in this market could be a daunting ordeal.
But it all adds up to a local housing market with an inventory that’s been stripped cleaner than the shelves of a Galveston grocery store before a hurricane.
One way to get out of the inventory squeeze is for the home building industry to construct new homes, says Houston Association of Realtors chair Chaille Ralph of Heritage Texas Properties.
Houston home builders have stepped up production, but they have been facing labor shortages and most builders have large backlogs of home buyers waiting for their homes to be completed.
The cost of a brand new home is higher than an existing home in many cases, reports Crawford Realty Advisors. In a study of sales for the first two months of the year, the median price per square foot for homes sold in Fort Bend County was $104.95 for new homes, versus $87.25 for existing homes. In Montgomery County, the figures were $105.20 per square foot for new homes and $93.92 per square foot for existing homes.
The Realtors association reports that the median price for a Houston home sold in February ($181,500) and the average price ($247,534) were the highest prices ever recorded for a February in Houston.
With the inventory this low, many have been expecting sales totals to drop because there’s simply not much to sell. But sales in January were the second-highest sales total ever recorded for a January in Houston. And the sales total in February was the best February the Houston Association of Realtors has recorded, except for February 2007, when 4935 single-family homes were sold.
The strong showing keeps continuing. Sales of condominiums and town homes were up 5 percent last month. A total of $1.4 billion worth of Houston area property was sold last month, a 22 percent gain over February of last year.
For now, the outlook remains very positive and there are very few negatives on the horizon. Sales will have to taper off someday, but that day may not come in 2014.
Ralph Bivins, founding editor of RealtyNewsReport, is a past president of the National Association of Real Estate Editors.
