February 2018 numbers are in, and in a surprising turn of events, the Houston market saw its first decline in six months. Thanks to falling oil prices and resulting layoffs, low inventory, and rising prices, sales of single family homes fell 5.8% over last February’s sales. The $500,000+ market took the biggest hit, while it has been the strongest-performing market segment until now.
A total of 4,521 single family homes sold in the month of February, compared to 4,798 last year. Inventory is at only 2.7 months supply, which is very low in comparison to the national average of 4.7 months. The average home price rose 4.5% to $259,293, while the median price jumped 7.9% to $199,400.
According to HAR
HAR Chair Nancy Furst of Berkshire Hathaway HomeServices Anderson Properties, there’s no cause for alarm and this decline is merely a result of the previously booming market returning to a more normal, sustainable level.
“We are witnessing the start of exactly what economists predicted would create a more ‘normalized’ Houston real estate market: declining sales volume, increasing prices, and improvement in housing inventory levels,” said Furst. “While some local energy jobs have gone away, the Texas Workforce Commission just declared 2014 one of the best years for job creation in Houston, with almost 105,000 jobs added and continued hiring expected this year, albeit at lower levels. No one knows for sure where oil prices will go in the months ahead, but the diversity of Houston’s economy should help our housing market hold its own during this transition.”
With the exception of home prices, which rose as discussed above, other metrics tracked by HAR all decreased in February, including months supply, sales volume in dollars and units, and pending sales at the end of the month.
Because inventory is so low and prices are at record highs for a February in Houston, it’s a very advantageous time to sell if you’ve been considering doing so soon. Average days on market is 59, so sellers should expect their homes to move fast once listed and would be wise to have a plan in place to move out without a lot of lead time in the event of a quick closing time.
Buyers should expect to have a somewhat harder time finding an available property and be prepared to make an offer quickly when they find the right place. As the saying goes, “he who hesitates is lost.” Because prices are high and rising, don’t expect sellers to come down much, if at all, from listing price.
It will be interesting to watch the market and see what developments take place in the coming months! As always, our agents are happy to help you understand what these numbers and trends mean for your particular situation and guide you through every step of the process of buying or selling your home.