Buyers Keep On Buying
Despite oil bust, Houston home sales have surprising staying power: Best September in history
Houston’s real estate market just completed its strongest September ever, establishing new records for home sales and high prices.
The Houston Association of Realtors reports 6,691 single-family homes were sold last month, almost a 4 percent increase over September of last year. The association, which has records going back for many decades, reports that last month was the best September in the history of Houston real estate.
“There are still a lot of buyers out there,” says Cheri Fama, president of John Daugherty Realtors. “They are finding that the inventory is still low.”
The low inventory of homes for sale pushed up home prices. The median price of a home sold in September was $208,000, up about 5 percent from September a year ago, HAR reports.
The continued strength in home sales comes as Houston’s overall economy has been knocked by woes in the energy industry. On Wednesday, the price of oil was less than $47 a barrel, after being as high as $107 a barrel in 2014. This huge drop in oil prices hurt Houston’s energy companies and thousands of people have been laid off.
Despite the economic downturn, home sales have continued to proceed with surprising staying power.
“This is the best oil downturn we’ve ever had in Houston,” says Ted Jones, chief economist for Stewart Title. “Historically, when oil goes down, Houston’s economy declines.”
Although there is pain in many energy companies, other parts of the Houston economy have performed well, Jones says.
Plus, rental rates are rising and apartment dwellers are opting to buy instead of renting, Jones says.
However, there are signs that the sales pace will be slowing down this fall, if it hasn’t already. HAR reports a slight decrease in “pending sales” a statistic that indicates future sales activity. And home sales typically taper off in the fall, as buyers are more concerned about back-to-school and holiday celebrations.
“We aren’t seeing the frenzy that we were seeing,” says Houston Realtor Amy Bernstein of Bernstein Realty. “There is still strong activity, but just not the frenzy that we saw.”
Buyers seem to be more cautious in recent weeks because of uncertainty in the economy and the stock market, Bernstein says.
“Buyers are taking their time. Fewer buyers are rushing to get in right now,” Bernstein says. “We aren’t seeing as many multiple offers.”
Houston has less than a four-months supply of inventory for sale – meaning that’s how long it would take to deplete the total supply of homes for sale. The inventory is slightly larger now than last year, but looking back over the years, the current supply of homes for sale is still exceptionally low.
In September, a total of 599 townhomes or condo units were sold, compared to 627 such sales in September of last year.
But mortgage interest rates continue to be low and Houston’s population continues to grow. So Houston’s housing market continues to appear to be bulletproof, despite the gray clouds over the economy.
Year-to-date single-family home sales through September totaled 57,302, virtually unchanged from the 57,352 homes sold in the comparable months of 2014. Last year was a record-setter for home sales in Houston and this year’s sales are running neck-and-neck with that red-hot pace.
So when the final tally for 2015 is reported, Houston Realtors should be more than satisfied with the annual sales totals. Although 2016 may be bumpy, it’s certain that 2015 will go down as one of the best years ever for home sales.
Ralph Bivins, founding editor of Realty News Report, is a past president of the National Association of Real Estate Editors.
