Just as many thought the housing market might be cooling off, the Houston Association of Realtors® (HAR) came out with its latest report. The verdict: real estate is still holding onto record-breaking territory! Keep reading for all the details about June’s performance and how you may be impacted.
Single-Family Homes
Buyers continued to seize on the opportunity to attain low interest rates in June. Although the pace of overall sales was slightly lower on a year-to-year basis, the sale of single-family homes increased 13.6 percent compared to June of 2020. With 10,638 units sold, this marks the market’s thirteenth consecutive month of rising single-family home sales. Year-to-date, home sales are ahead of 2020 by a jaw-dropping 25.9 percent. Keep in mind that 2020’s real estate market was also record-breaking!
Strong sales among high-end homes sent prices soaring past even last month’s historic levels – more on that later. Sellers may be glad to know that the average single-family home price shot up 23.7 percent to $395,316; the median price soared 20.0 percent to $314,500.
Sales of existing single-family homes totaled 9,093 in June, up 24.3 percent from June of 2020. The average price of existing single-family homes rose 27.5 percent to $395,846, and the median sales price jumped 24.0 percent to $310,000. Both numbers represent record highs.
Condos & Townhomes
Sales of townhouses and condos soared 49.9 percent in June, increasing for the tenth straight month. Nearly 300 more townhomes and condos sold in June of 2021 than in June 2020 – pretty impressive, if you ask us! The high demand for standalone, single-family homes has led many to consider all options available to them.
If you were hoping prices might dip, we’re afraid we’ve got some bad news: the average price of a townhome or condo skyrocketed 16.9 percent to $247,827, officially the highest average price of all time. The median price climbed 22.4 percent to $214,125, another record.
While buyers have become increasingly interested in condos and townhouses in this tight market, low inventory levels are leaving some prospective buyers scratching their heads. Inventory dropped from a 4.2-months supply to just 2.5 months.
Leases & Rentals
Fewer renters were interested in leasing a single-family home in June. In fact, consumer demand shrunk 24.1 percent year-over-year. This may be due in part to soaring prices. If you’re looking to lease a single-family home, be aware that the average price has now jumped 10.6 percent to a record-setting $2,111.
Year-over-year, the leases of townhomes and condominiums remained unchanged. However, rent in this sector has also increased. Renters can now expect to pay an average of $1,799 per month, a new record.
Overall
The real estate market performed astoundingly well, but certain segments of the market truly led the charge in sales.
As has been the trend for much of the past year, sales of homes priced from $750,000 and up dominated the charts. Overall, the sales of homes priced $250,000 and above increased. Low interest rates have enticed many buyers to boost their budgets during a time when the average prices of all home types have soared. This surge in home-buying has once again pushed pricing to unprecedented levels.
Broken out by pricing, here’s how June’s Houston home sales performed:
- $1 – $99,999: decreased 35.2 percent
- $100,000 – $149,999: decreased 40.7 percent
- $150,000 – $249,999: decreased 25.1 percent
- $250,000 – $499,999: increased 35.0 percent
- $500,000 – $749,999: increased 87.0 percent
- $750,000 and above: increased 136.5 percent
Total dollar volume surged 43.8 percent to $4.8 billion. That’s an unfathomable amount of money, and it’s another record for Houston!
In total, 13,090 properties sold in June of 2021, nearly 1,000 more than the previous month. This number represents the greatest sales volume of all time. Year-over-year, that’s a 16.9 percent increase.
Pending sales rose just 3.1 percent. The total number of active listings (the number of available properties) sits 31.3 percent lower than the year prior. If it seems like options have been stagnating or even dwindling, well, you’re not imagining it.
HAR Chairman Richard Miranda explained what might be behind the latest surge in buying: “We know anecdotally that out-of-town investors have contributed to the frenzy… We saw similar investment activity following Hurricane Harvey, and within a few months, the market stabilized. We expect stability to return this time around, so anyone in the market for a home who is frustrated by current market conditions needs to be patient.”
In June of 2020, it took four weeks longer on average to sell a home. The Days on Market (DOM) measurement for June 2021 sunk from 57 to 29. For further reference, DOM in May 2021 was 34. These numbers just seem to keep getting lower and lower!
Although it may not have felt like it, single-family inventory levels actually improved in June. Single-family inventory reached a 1.5-months supply, the highest value since February 2021. Still, the housing supply was much lower than the national level of 2.5 months reported by the National Association of Realtors® (NAR), and local levels were half of what they were in June 2020.
What Does This Mean for You?
Renters: If you’re interested in leasing, consider your options. Is a townhome just as acceptable to you as a standalone, single-family home? If so, you might have more options. You can also try switching up the neighborhoods in your search criteria to widen your net. Despite the higher price tags on rentals, there are still excellent options out there. Enlisting the help of a qualified real estate agent can make your search faster and more efficient. Consider it before you go crazy scouring all the listing websites!
Sellers: If you own an in-demand home and have been looking to sell, your eyeballs might have dollar signs in them in this frenzied market! You might be able to sell your home for a higher value than you purchased it for (or even more than it’s worth), but take caution. We’ve heard stories of people purchasing properties only to immediately sell for even more. Talk to your Realtor® to see what’s realistic for your house and for your neighborhood. In this market, leaving money on the table could be a once-in-a-lifetime mistake we know you’ll kick yourself for later.
Buyers: Have patience. Inventory levels for single-family homes show signs of improvement, but they won’t soar overnight. Those interested in condos and townhomes may also continue to find the market a bit challenging, to say the least. No matter how inventory trends, be prepared to contend with high prices, – demand is still hot. If you can firmly divide wants versus needs, widen your geographic net, and be flexible when it comes to pricing, you’ll have more options available to you. Since homes are getting snapped up at record paces, you’ll definitely want to work with a real estate professional with a firm pulse of the market. You don’t want to miss out on your dream home when interest rates are so low.
Have questions about renting, buying, or selling in the Houston and 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 happen.