Economic conditions continued to impact the real estate market in November. However, a decline in sales was inevitable moving into the start of the holiday season, and there were some bright spots to pay attention to in HAR’s recent update. Keep reading to learn more about the latest numbers.
Before we dive into the numbers, readers should know that aspects of the figures outlined here are normal and expected. If you have any questions or concerns about how these numbers affect you and your goals, a real estate professional would be happy to help you.
Houston’s numbers were down for the eighth straight month in November. A variety of factors contributed to the figures in HAR’S latest report, including high interest rates, inflation, low inventory, and increasing home prices. However, economic conditions do not tell the entire story. For example, interest in purchasing a home typically wanes as the holidays gear up. Sales volume is also typically compared on a year-over-year basis, and even some of Houston’s best Novembers would pale next to 2021. These are just a handful of things to keep in mind when considering November’s performance.
Single-family home sales fell 30.4 percent year-over-year in November, with 5,827 units sold compared to 8,374 in November 2021. This value represents the largest one-month sales decrease of the year. Compared to November of 2019, sales were down 8.4 percent. Year-to-date, the market is falling behind 2021’s blazing pace by just 8.8 percent.
Despite declines in sales volume, prices continued to soar in November. The median price of a home jumped 7.0 percent to $332,000, and the average price ticked up 5.8 percent to $403,589. Both values are below the records established earlier in 2022. In June 2022, the median price of a Houston home reached its highest level of all-time at $354,000. In May 2022, the average price of a single-family home reached a record $438,301.
Although all housing segments saw declines, single-family home rentals experienced gains as prospective buyers shifted over to the rental market.
Existing home sales were down 38.1 percent year-over-year, totaling 4,214. The average sales price of existing homes rose 4.3 percent to $397,178, and the median price increased 2.5 percent to $312,500. These figures are also both below records established earlier in the year.
Condos & Townhomes
November marked the sixth consecutive month of sales declines, with condo and townhome sales dropping 36.2 percent year-over-year with 437 sales compared to 685 a year earlier. This number represents the largest monthly decline for the entire year.
Prospective buyers may be interested to know that the average price dropped 1.3 percent to $253,551. However, the median price increased 3.8 percent to $218,000. Both figures are below records that were set in April of 2022. Tight inventory in this segment also let up slightly with levels growing from 1.9 months to a 2.1-months supply.
Broken out by pricing, here’s how November 2022’s real estate sales performed:
- $1 – $99,999: decreased 13.9 percent
- $100,000 – $149,999: decreased 29.6 percent
- $150,000 – $249,999: decreased 44.6 percent
- $250,000 – $499,999: decreased 27.4 percent
- $500,000 – $999,999: decreased 19.0 percent
- $1M and above: decreased 23.7 percent
Sales in all pricing segments decreased. Homes priced between $100,000 and $500,000 experienced the highest declines as inventory remained a challenge.
November sales are down 8.4 percent when compared to November 2019. The median price of a home at that time was 27.4 percent lower at $241,000, and the average price was 26.4 lower at $297,070. To give further context, sales are 7.3 percent behind where they were in November 2017.
The market continued to level out from its unprecedented heights as the holidays approached. In November 2021’s hot market, it took 35 days on average to sell a home. However, in November 2022, Days on Market grew to 48 days. While multiple factors are at play, one is surely inventory.
The housing supply grew from 1.5 months last year to a 2.9-months supply. This is great news for buyers – it’s the highest supply of homes since July 2020. However, this does mean that sellers face a bit more competition. Nationally, inventory rests at 3.3 months according to NAR®. Since a 6.0-months supply is generally viewed as balanced, the market still sits in sellers’ favors.
According to HAR Chair Jennifer Wauhob, “Because Houston housing was hyper-energized at the beginning of the year, concern arose when interest rates increased and we began experiencing a consistent decline in sales volume. It’s important to maintain perspective by acknowledging that our market is battling the same forces as the rest of the country between higher interest rates and prices, inflation, and limited inventory. Fortunately, the Houston area has weathered the downturn better than many other markets.”
What Does This Mean For You?
Buyers: If concerns about the economy have led you to shelve your aspirations to own a home, consider talking to a REALTOR®. They may be able to steer you toward more affordable homes and even toward neighborhoods with high appreciation potential that you may not have considered. Data in November showed that prices continued to increase, and it is unclear if or when this trend will change. That being said, consider the pros and cons of purchasing now and remortgaging when interest rates are more amenable. Inventory at this time is still tight, but the numbers do show that buyers have much more wiggle room in terms of options than they did last year.
Sellers: Although the market still remains in sellers’ favors, sellers should know that the market has begun to rebalance. Prospective buyers have felt the pinch of economic conditions, and interest in purchasing has declined. Although the average and median home price both increased in November, it’s unclear how long this trend will continue as eager sellers opt to drop sale prices. It is also worth noting that properly pricing a home is tricky at the moment. A REALTOR® can help you understand how your property compares with others in your area so that you can earn the most from the sale of your home.
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 a reality.