Sometimes the numbers alone don’t tell the whole story, and that’s definitely the case for July’s Houston real estate sales. According to the latest report by the Houston Association of Realtors® (HAR), July was yet another great month despite percentage declines. So, what’s the deal? Let’s get into it!
At first glance, sales dipped in July 2021. However, if you recall the situation last year, closing delays during the second quarter pushed through that July. The result? Inflated numbers for July 2020. In fact, it was a record-setting month! As a result, single-family home sales were down 6.1 percent compared to last year. However, when compared to 2019, the market was up 19.1 percent. A total of 10,159 units sold. On a year-to-date basis, area home sales have blown 2020’s pace out of the water with a 19.1 percent increase.
Again, sales of high-end homes have been especially successful. Properties priced $750,000 and up led sales volume with a massive 36.7 percent year-over-year increase. The $500,000 – $750,000 segment also performed quite well with an 18.9 percent uptick.
The average single-family home price shot up 15.3 percent year-over-year to $389,197. The median price also rose 13.9 percent to $309,910. These figures represent the second highest prices of all-time, only falling short of last month’s numbers.
Existing single-family home sales totaled 8,859, up 1.1 percent from last year. The average price of existing single-family homes soared 17.2 percent to $388,876, and the median sales price increased 15.3 percent to $305,000.
Condos & Townhomes
In an ongoing trend, the increase in sales of townhomes and condos has continued. With sales catapulting 23.9 percent with 841 sales completed, July marked the eleventh consecutive month of rising sales. More buyers have been considering townhomes and condos as the demand for standalone single-family homes has left some buyers out of the market.
If you’re thinking about buying, you should know that the average price of a townhome or condo rose 10.0 percent to $245,160. The median price in July increased 8.7 percent to $200,000. For reference, the median price was $214,125 in June.
Inventory levels showed some improvement from June’s 2.5 months, but not by much; levels currently sit at 2.6 months, a sharp decrease from the 4.1-months’ supply available in July 2020.
Leases & Rentals
As buyers continued to take advantage of low interest rates and as rent prices continued to skyrocket, consumer demand for lease properties dwindled. Single-family home leases dipped 20.1 percent year-over-year. Rentals of townhomes and condos sunk 10.8 percent.
The average rent for a single-family lease ticked up 11.4 percent to $2,162, breaking records. The average price of a townhome or condo jumped 5.8 percent to $1,756. In many cases, renters are paying far more per month than they would if they purchased a property.
Houston’s blazing housing market officially ended 13 consecutive months of positive sales, but as we explained, that was the result of a statistical anomaly. Will the coming months fall short for similar reasons? Only time will tell.
However, one thing is for sure right now, and it’s definitely eye-popping: Even though July 2021’s sales volume decreased year-over-year, the total dollar volume rose. Yes, you read that right! Year-over-year, July 2021’s total dollar volume saw an increase of 11.4 percent.
And despite sales of all property types shrinking 3.7 percent, July of 2021 still represents the third greatest month of sales volume of all-time.
#1 – June 2021 (13,115 sales)
#2 – July 2020 (12,865 sales)
#3 – July 2021 (12,383 sales)
Broken out by pricing, here’s how July’s sales performed:
$1 – $99,999: decreased 38.0 percent
$100,000 – $149,999: decreased 37.7 percent
$150,000 – $249,999: decreased 37.8 percent
$250,000 – $499,999: increased 12.0 percent
$500,000 – $749,999: increased 18.9 percent
$750,000 and above: increased 36.7 percent
Although there were 2.4 percent more pending sales in July 2021 than in July 2020, the total number of available properties was 20.6 percent lower this year than last year.
Regarding inventory, we’ve got some good news: It was on the rise in July! Even though it was still at a low 1.8-months’ supply, that is the highest inventory level Houston has seen so far in 2021. In fact, there were 7.8 percent more new listings. Local buyers may be quick to get excited about the past couple months of improving housing inventory, but it’s important to remember that the National Association of Realtors® (NAR) has stated that nationally, inventory levels sat at a much rosier 2.6-months’ supply in July.
Days on market (DOM) fell to 26 from 56 the previous year, a clear sign of a busy market. Homes sold even faster on average in July than in June of this year, continuing to impress sellers hoping for a quick sale.
According to HAR Chairman Richard Miranda, “Assertive investors and cash buyers are still controlling the tides of this seller’s market, but hopefully that will moderate with a continued influx of new listings.”
What Does This Mean for You?
Renters: There’s no sugar-coating it here, folks: It’s tough out there, and the prices keep going up, up, up. Fine-tune your list of wants vs. needs, and be open to some of the city’s up-and-coming neighborhoods. You can find really great deals! It can be helpful to enlist the assistance of a Realtor®, however. If anyone knows about new listings, it’s a Realtor®, and homes with amazing lease prices go fast. With the right help and some luck, you could be signing a new lease within the same week you begin looking.
Sellers: Whether you sell to an investor or to an eager prospective homeowner, odds are that someone wants what you’re offering. Although increasing inventory levels have boosted competition among sellers, it is still very much a seller’s market, as demonstrated by shrinking days on market values and rising prices. When selling in a market like this one, it can be extremely difficult to properly price your home, so be sure to reach out to a trusted real estate professional.
Buyers: Although inventory levels of single-family homes appear to be improving, prices are up, and buyer competition is fierce. It’s frustrating to fall in love with a home and then be outbid by an investor! We promise you that there are homes out there that meet your criteria – it just might take some patience. It can also be a challenge to find the right condo or townhome right now, but buyers may still find more options available to them. There’s no doubt about it! The market is tight. A Realtor® can help you jump on properties that meet your needs and work out reasonable offers that leave you feeling satisfied with your investment. The last thing you want after making such a life-changing decision is buyer’s remorse.
Have questions about renting, buying, or selling in Houston and the near-town areas? Get in touch with Circa Real Estate. They’d love to chat with you about how to make your real estate dreams a reality.