Despite shrinking inventory and climbing prices, Houston’s real estate market witnessed another positive month of sales in February. Can closings keep up for the rest of the year in this tight market? Let’s take a look at the numbers.
Before we dive in, it’s important to make note of where the market was in February of 2021. The numbers represented in HAR’s latest data reflect comparison to a market damaged by February 2021’s deadly cold weather. The market ground to a halt for days – and in some cases, weeks.
According to HAR’s report, single-family home sales soared 22.9 percent with 7,372 units sold. In February of 2021, just 5,997 single-family homes sold. For a more accurate comparison, HAR also stood 2022’s data against 2020’s. Between the two years, sales jumped 23.3 percent.
High-end home sales continued to push pricing to record highs. The median price jumped 19.3 percent to $328,000. The average price increased 13.4 percent to $395,871. Both of these values blew past record prices set respectively in December 2021 and June 2021.
Properties priced between $250,000 and $500,000 led sales for the month with a massive 80.1 percent year-over-year surge. The $500,000 to $1 million segment registered second place for the month with a 72.3 percent increase. The luxury market – consisting of homes priced at $1 million and over – also saw a gain of 33.5 percent. The lack of inventory in homes priced below $250,000 has led many buyers to consider purchasing at a higher price point.
Existing single-family home sales totaled 5,765 – up 23.4 percent from February of 2021. Pending sales soared 23.6 percent. However, total active listings sunk 10.7 percent as a result of the ongoing high demand for homes.
Condos & Townhomes
Condos and townhomes had another great month of sales with closings catapulting 35.9 percent with 659 sales. Compared to February of 2020, the increase grows even larger to 40.5 percent. With inventory levels of standalone single-family homes dwindling, many buyers have turned to condos and townhomes instead. However, even though the demand for condos and townhomes remains high, inventory has not. With just a 1.4 months supply available, some buyers expressed frustration with how long it can take to find and subsequently close on a suitable home.
In February 2022, the average price stood at $266,366, and the median price soared to $225,000. Both values are record highs.
Leases & Rentals
The lease market continued to benefit from would-be buyers who chose to lease a property instead. Single-family home rentals skyrocketed 23.8 percent year-over-year. However, townhome and condo leases did not fare as well with a decline of 1.0 percent.
The average cost to rent a single-family home increased 6.5 percent to $2,052. Renters who opted to lease a condo or townhome instead typically saved, spending $1,767 on average.
Broken out by pricing, here’s how February 2022’s real estate sales performed:
- $1 – $99,999: decreased 24.0 percent
- $100,000 – $149,999: decreased 53.5 percent
- $150,000 – $249,999: decreased 44.1 percent
- $250,000 – $499,999: increased 80.1 percent
- $500,000 – $999,999: increased 72.3 percent
- $1M and above: increased 33.5 percent
A dearth of homes priced below $250,000 contributed to decreasing year-over-year sales in those segments.
Inventory dropped to a 1.3-months supply compared to 1.5 months last year. Nationally, inventory stands at a 1.6-months supply. Days on Market, or the time it typically takes to sell a home, also fell from 48 days to 41.
Overall, 9,299 properties of all types sold. Total dollar volume of February’s sales jumped a whopping 43.5 percent to $3.5 billion!
However, real estate professionals are watching closely as global and domestic developments unfold. According to HAR Chair Jennifer Wauhob, increasing interest rates, surging oil prices, and economic fallout related to the Russia-Ukraine conflict have raised concerns about how Houston’s real estate market will be affected.
What Does This Mean For You?
Buyers: Although no one can say for sure where the market is headed, you may want to consider how far you can stretch your budget. With few mid-range and below options available, the ability to purchase a higher-value home may give you more selections to choose from. A real estate professional can work with you to determine what you can afford in this shrinking market. They may even be able to catch a perfectly-priced home for you before it hits the market, giving you an edge over buyers who haven’t yet contacted a Realtor®.
Sellers: Whether you own a standalone single-family home or a townhouse or condo, it is still a fabulous time to sell. Even if your property needs some TLC, consider contacting a Realtor® to see how competitive your home is. With buyers willing to compromise in a market currently struggling with low inventory, you should almost never say “My home wouldn’t sell!” In addition, with prices soaring higher and higher, you could be in for a pleasant surprise.
Renters: With rents increasing, you may want to consider looking in different parts of Houston if cost of living is a concern. That can be pretty stressful if you’re unfamiliar with a particular neighborhood! The real estate agents at Circa Real Estate each have expertise in specific neighborhoods so you know what to expect when moving to a new neighborhood. And, with connections throughout the city, you may be able to find a great deal in an area you already know and love.
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.