Despite historically low inventory levels, buyers continued to snap up properties at a quick pace in November. The month also saw changes in the renters’ market that will surely interest local businesses. As we begin to close out the year, one thing is for sure: the market is still booming. Let’s take a closer look at the numbers.
If you follow real estate closely, you know that the market has been anything but predictable. Although the market dipped slightly in October, the same did not hold true for November 2021. Single-family home sales increased a modest 3.9 percent compared to last November, with 8,320 homes sold. Last November, there were 8,010 sales. Year-to-date, home sales are 12.0 percent ahead of 2020’s record numbers. If that doesn’t impress you, think about this: sales in 2021 are 22.2 percent higher than in 2019!
Sellers, you’ll be happy to know that the average price of a single-family home jumped 12.6 percent to $383,807. The median price also skyrocketed 16.3 percent to tie June 2021’s record high of $314,000. What might be behind this late fall surge in pricing? One factor is that buyers focused on purchasing high-end homes in November, pushing the prices up. A lack of homes priced under $250,000 also contributed to rising home costs.
Homes priced in the $500,000 to $1 million range achieved the highest sales volume boost for the month – a whopping 49.1 percent increase year-over-year! The $250,000 to $500,000 segment also performed quite well with sales jumping 26.2 percent year-over-year. Even the sales of luxury homes priced at $1 million and above surged 23.4 percent compared to November 2020.
Inventory sits at a paltry 1.6-months supply, down from 2.1 months last November. As you might expect, this number is trending lower as we head into the winter months. Nationally, inventory rests at a 2.4-months supply, making it especially hard to find a home in Houston. Year-over-year, the Days on Market measurement sunk from 46 days to 35 days.
Condos & Townhomes
The demand for condos and townhomes remained high in November! In fact, sales increased for the 15th consecutive month with 683 closed sales compared to 585 in November of 2020. This represents a 16.8 percent jump in sales versus last year at the same time. Like the prices for standalone single-family homes, the cost to purchase a condo or townhome also increased. The average price soared 16.0 percent to $258,970, and the median price climbed 10.5 percent to $210,000.
With incredibly low inventory levels and the rising popularity of this style of home, it can be challenging to find the right property. Inventory sunk from a 3.7-months supply in November 2020 to just 2.1 months in November 2021.
Leases & Rentals
Following a disappointing performance in October, November’s lease market picked up steam. Single-family home leases surged 7.1 percent year-over-year despite the average rent ballooning 8.5 percent to $2,042.
Townhome and condo leases also performed well, increasing 5.1 percent. There’s no doubt that rents have increased in Houston, and that certainly applies to townhomes and condos; renters can now expect to pay $1,737 per month, a jump of 3.8 percent compared to last year.
This spells out good news for local businesses. An active rental market indicates that people are moving around, meaning that more people may have exposure to your business.
In case you’re wondering if 2021’s strong housing market will translate to another productive year in 2022, here’s some good news. According to HAR Chairman Richard Miranda, “The Greater Houston Partnership (GHP) sees positive conditions for local employment going into 2022, which is good news for real estate.”
In the November 2021 issue of the Economy at a Glance, GHP explained that roughly 280,000 Houstonians exited the workforce in the early months of the pandemic. Now, all but 55,000 of those individuals have returned to work. On top of this, more young adults are entering the workforce, and a significant number of people have migrated to the Houston area from other states and countries. Houston boasts a strong job market, and opportunities continue to grow.
Broken out by pricing segment, here’s how November’s sales performed:
- $1 – $99,999: decreased 23.9 percent
- $100,000 – $149,999: decreased 27.1 percent
- $150,000 – $249,999: decreased 33.5 percent
- $250,000 – $499,999: increased 26.2 percent
- $500,000 – $999,999: increased 49.1 percent
- $1M and above: increased 23.4 percent
In total, 10,216 properties sold in November, representing a 5.6 percent increase year-over-year. With prices continuing to steadily incline, it’s not surprising that the total dollar volume of sales in November beat out last year’s numbers by 20.6 percent. An incredible $3.7 billion worth of homes sold in November of 2021.
Pending sales leapt 19.3 percent, which could mean healthy sales numbers are on the way to round out the year. However, total active listings are down 13.3 percent compared to last year due to the unrelenting demand for homes throughout 2021.
What Does This Mean for You?
Renters: The rental market is hot. This is fantastic news if you’re a landlord – maybe not such awesome news if you’re a renter. Prices may continue to nudge higher due to low inventory levels and rising costs of living. It might be a good idea to talk to a Realtor® about your expectations for a new home and if other options might be more suited to you.
Sellers: November’s Days on Market value might have ticked up slightly, but there’s no question that it is still a seller’s market. Houston is in need of new homes to add to active listings as buyers continue to try to outbid one another to purchase their dream homes. If your home is valued $250,000 or below, you might be interested to know that this segment in particular has been suffering from low inventory levels. Whether your home is a fixer-upper or a starter home, there’s a good chance it could attract buyers desperate to view homes in their price range. Make sure to talk to a Realtor® about how to properly price your property in such a competitive market!
Buyers: Decreased inventory levels and increased prices may leave you feeling discouraged, but you have options. A Realtor® can help you work through a challenging real estate search and help you to be one of the first to view homes as they enter the market. They may even find rental choices for you that tick all your boxes without compromising your monthly budget. It’s also worth noting that while some buyers are afraid to purchase a home in this unpredictable market due to fear of a downturn, prices have continued to trend upward for quite some time now. While no industry professional has a crystal ball they can consult for clues about the future, there are indicators that the booming real estate market may persist through 2022. Talk to a Realtor® about your concerns if you have any. You might be surprised by the answers you receive!
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.