With jobs continuing to be created around the Houston area, plus the current low mortgage rates, single family home sales in Houston are on the rise! In fact, May marked the 24th consecutive month of positive sales for the Houston area and was the largest one-month sales volume of all time, boasting record-high pricing according to a report by Houston Association of Realtors (HAR).
According to the report, home sales in the Houston area for May 2013 jumped up 28% with 7,794 contracts closed on single-family homes. In addition, the median sales price of homes increased by 11.9%, reaching $188,000, and the average sales price rose 9% to $256,790, both prices representing the highest of all time. The report concluded that the greatest increase in sales volume was homes selling between $150,000 and $500,000. In addition, foreclosure sales decreased by 33.7% and accounted for only 9.4% of all property sales, down from 19.7% at the beginning of the year. Including all property types, May sales for homes in the Houston area totaled 9,245, $2.2 billion in sales volume, which is a 38% increase from May of last year.
This record-high sales volume is partially due to the area’s extremely low inventory. Housing inventory in Houston for May was reported at 3.3 months while the national average remains 5.2 months, according to the latest report by the National Association of Realtors. With fewer options on the market, buyers are paying higher prices. In fact, at least 10% of sales in the area are sold over the list price and about 25% are sold for the asking price.
With 111,000 jobs created by the Texas Workforce Commission over the last 12 months, the Houston economy is thriving and attracting buyers to the area, and the low inventory available has created a demand for new homes. In fact, over the past few years, the average demand for new homes in the Greater Houston area has been 32,000 per year. With builders only building about 25,000 a year, almost 8,000 buyers are forced to rent. Therefore, the lease property market remains strong, as well, with average rent prices climbing above $1,400 according to the report.
As inventory continues to shrink, the summer months are likely to remain an optimal time for sellers to enter the market. Many homes are sold within days or weeks of entering the MLS and for as profitable as possible. However, as interest rates start creeping upwards, the amount of buyers eager to move will likely to deflate. For those conflicted over whether or not to sell, consult with a real estate agent to learn about your best options.