After a whirlwind of a year in real estate, many have wondered what the market would look like in 2022. We now have a glimpse! HAR released January’s numbers, and the results indicate that Houston is still very much in a seller’s market. However, there is growing uncertainty about how persistent low inventory levels will affect key sectors and performance indicators. Let’s review the numbers!
Single-Family Homes
Single-family home sales jumped 7.1 percent with 6,451 homes sold this year versus 6,024 sold in January of 2021. Because of dwindling inventory in midrange and below homes, the highest end of the pricing spectrum saw the strongest sales activity. In fact, sales of high-end homes registered a massive 52.2 percent year-over-year increase! Sales of homes priced between $500,000 and $1 million surged 47.1 percent, followed by homes priced between $250,000 and $500,000 with a 36.1 percent year-over-year increase. With fewer homes to choose from, buyers have been forced to look into purchasing pricier homes.
Sales of luxury homes also pushed up other key measurements. The median price soared 17.9 percent to $310,000, and the average price ticked up 16.2 percent to $377,738. Although these values are well below the records set during 2021, they both represent record high prices for a January. It remains to be seen if an influx of inventory will moderate rising sales prices.
Existing single-family home sales totaled 5,213 – up 8.3 percent from January of 2021. Pending sales also soared 15.7 percent. However, total active listings sunk 14.2 percent because of the breakneck pace of 2021’s homebuying.
Condos & Townhomes
Condos and townhomes had another A+ report! January represented the 17th consecutive month of positive sales. Compared to last year, sales jumped 24.7 percent with 566 closed sales. The average price increased 14.7 percent to $241,605, and the median price soared 18.3 percent to $207,700. Inventory in January of 2021 rested at a healthy 3.3-months supply; however, 2022 has been a different story. With the demand for townhomes and condos way up, inventory in January of 2022 dropped to just 1.6 months.
Leases & Rentals
Buyers who have postponed purchasing a home have fueled Houston’s strong lease market. Single-family home leases ticked up 7.8 percent year-over-year, and leases of townhomes and condos were up 2.6 percent.
Compared to last year at the same time, the average single-family rental cost shot up 9.7 percent to $2,070. Renters of townhomes could expect to save a bit more money, only paying $1,801 on average.
Overall
Broken out by pricing, here’s how January 2022’s real estate sales performed:
- $1 – $99,999: decreased 36.0 percent
- $100,000 – $149,999: decreased 40.6 percent
- $150,000 – $249,999: decreased 34.4 percent
- $250,000 – $499,999: increased 36.1 percent
- $500,000 – $999,999: increased 47.1 percent
- $1M and above: increased 52.2 percent
Due to the lack of new midrange and below homes on the market, sales favored higher-end homes. Overall inventory tumbled to a 1.4-months supply compared to 1.7 months last year, further frustrating buyers hoping to stick to a budget. It’s worth noting that this is the second lowest inventory value on record. In the past year, the highest inventory level was a 1.8-months supply in August of 2021, spelling out uncertainty about when buyers could see some relief. Nationally, inventory stands at a shrinking 1.8-months supply. Without an influx of affordable new homes, many buyers will be left out of the market – at least temporarily.
“The Houston housing market staged an impressive start to 2022, but that pace of sales is unsustainable without dramatic and immediate improvement in inventory,” said HAR Chair Jennifer Wauhob. “There simply aren’t enough homes out there for consumers to buy right now,” she said in HAR’s latest report.
The Days on Market measurement fell from 48 days to 39, providing further evidence that this January’s market was perhaps a better one than last year’s in terms of selling your home. Total dollar volume of January’s sales skyrocketed 28.1 percent to $2.9 billion!
What Does This Mean For You?
Buyers: The market has real estate professionals singing “How low can you go?” regarding inventory levels. It’s not clear when they will increase, but spring usually offers the market some measure of reprieve. If there is a home you’re interested in now, don’t wait to act on it. If you’re just beginning your search, work with a real estate agent to avoid missing out on the home of your dreams. Realtors® sometimes know about great properties before they even hit the market, significantly boosting your chances of successfully purchasing a home in a crazy market like this one. There are also plenty of amazing homes in developing neighborhoods and near-town areas if you’re willing to be flexible with your location requirements.
Sellers: If you’re thinking of downsizing, leaving the Houston area, or purchasing a different home to better suit your needs, you should know that homes are selling for serious premiums right now. Even if you purchased your home relatively recently, you could be surprised at what your home might sell for now! Once inventory becomes more sustainable, the market may not favor sellers quite as much as it does right now. Ask a Realtor® about how much your home could be worth.
Renters: With many eager homebuyers choosing to wait out the drought of homes by renting instead, lease prices have shot up. However, if you choose to rent out a townhome instead, you can potentially save yourself hundreds each month. If homebuying is in your sights, you could use these savings to squirrel away money for a down payment. A seasoned real estate agent can show you properties of all types available to lease based on your needs, so don’t feel limited!
Have questions about renting, buying, or selling in the Houston and near-town areas in 2022? Get in touch with Circa Real Estate. They’d love to chat with you about how to make your real estate dreams a reality.