The Houston real estate market continues showing signs of recovery from Hurricane Harvey during the month of October. High demand and lower than historically typical supply constrained home sales, but in spite of that, sales rose 7.5%. Many people who experienced hurricane flooding are looking to move to a new home all at the same time, and flood damaged properties were pulled off the market for repairs, leaving inventory at 3.8 months’ supply.
All segments of the market saw gains in October apart from $150,000 and under market, primarily because there are so few homes available in that price range to begin with and many lower-priced neighborhoods were badly flooded. Thus, the $750,000+ market observed the greatest sales volume when considering the metro area. In our opinion, the strengthening however is uneven as neighborhoods with high concentrations of oil related employees are still seeing excess inventory, especially at the higher price points.
The median home price in October rose 3.9% to $226,491, which is the highest median ever for an October in Houston. The average price rose 2.7% to $285,858. The average home remained on the market for 61 days, compared to 56 days last October. This longer on-market time is likely due to the immediate aftermath of the hurricane while people waited for roads and offices to reopen and power to be restored.
While home sales are still ahead of 2016’s year-to-date sales by 2.8%, lower supply and high demand in some areas may continue to constrict home sales for the next few months as the city rebuilds. Before Harvey, Houston was on track to set sales records this year, which made the blow dealt to the market easier to absorb than it would have been in previous years or in another city.
Although the overall Houston real estate market is showing recovery from Hurricane Harvey, supply in some areas will need growth to meet ongoing consumer demand for housing while in other areas supply is high.
What does this mean for you?
If you are in the market for a home depending on the areas and price points you can expect to have a lower inventory to choose from and to potentially bid against others if the area is experiencing competition. If you’re selling, depending on the areas and price points you can expect strong buyer interest while in others buyers are still a bit reserved leading to longer sales times. As always, we are waiting and ready to discuss your real estate needs and provide any guidance you may need to start the buying and selling process.