It’s been two years since the Houston housing market launched into a historical frenzy with homes listing and selling practically on the same day and offers reaching, at times, $100,000 over the asking price. A persistent lack of inventory and rising prices began pushing would-be homebuyers to either wait out the storm or turn to rental housing options.
However, the most recent housing market report—released in October by Houston Association of Realtors’ (HAR)—shows we are finally in a transition to pre-pandemic levels as home inventory in September boosted to its highest availability in two years, and home sales under $500,000 dropped for the sixth consecutive month.
“The Houston housing market consists of many concurrent trends,” said HAR Chair Jennifer Wauhob with Better Homes and Gardens Real Estate Gary Greene. “The high end of the market continues to perform well, as is the rental market. But because of a lack of homes priced below $400,000, the market as a whole is slowing to levels we were accustomed to before the pandemic. The most encouraging news of all is the gradual build-back of inventory, which should yield more options for consumers going forward.”
Here are the biggest takeaways from September's report:
1. Single-family home sales are declining.
Single-family home sales fell 17 percent in September with 7,664 homes sold compared to 9,235 in September 2021.
2. Higher-priced homes sales are still buzzing.
While single-family home sales are declining, higher-priced homes, those priced at $500,000 and above continue to sell. The $1 million and above segment specifically increased by 7.2 percent.
3. Prices are still on the rise, but slightly less than earlier this year.
Average single-family home prices rose 11.6 percent in September reaching $414,776, which is actually below the record high of $438,384 we saw in May. The median price jumped 14.7 percent, which is also below the peak median of all time reached in June.
4. Inventory is booming for the first time in years.
Houston is finally seeing its highest supply of homes on the market since July 2020. According to HAR, a 6-month supply is considered a “balanced market” where neither the buyer nor the seller has an advantage. The current national inventory is 3.2 months, according to the National Association of Realtors.
5. Interest rates reached the highest percentage in six years.
Thanks to the increase in prices and an interest rate that exceeds 6 percent for the first time in years, it’s no surprise that single-family home sales are declining.
6. The mad-dash to be the first to make an offer had slowed—just a bit.
The actual time it took to sell a home in September grew from 29 to 37 days, giving homebuyers a bit more time to consider their options.
7. A townhouse might be a good idea.
The average price of a townhouse increased 7.5 percent to $257,781, but this is still well below the current average of a single-family home, which may be an option to consider if on the hunt for a home under $400,000.