Who’s old enough to remember when people were convinced Houston’s housing market would collapse whenever oil prices fell?
This data was backed by HHC at REIT Week today when they said that there is still strong demand from builders. They did say buyer traffic has slowed a bit but when you have 3.1mos inventory that means only 4 people are fighting to buy the same home, not 8. The good news when you are $HHC is that you own your land in the most sought after areas in the city so your pricing power remains.
I’ve said it before and will again….supply, supply, supply
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Now, looking forward the rebound in oil prices will help but I don’t expect it to be immediate. People/businesses will be cautious before returning to previous levels of spending (note that simply indicates slower growth vs boom times, not recession or contraction). That means we should see inventory levels continue to build and that is just fine. It isn’t healthy to have a housing market with <3mos inventory forever. Pricing will remain strong and increase as Houston is stil growing….
Home prices climb to historic highs and inventory levels improve
HOUSTON — (June 10, 2015) — The Houston housing market has been on a see-saw ride this year, with home sales increasing and declining in alternating months. May marked a downward swing to the tune of 4.3 percent. Homes priced between $250,000 and $500,000 experienced positive sales activity, while homes between $150,000 and $250,000 were flat. Sales volume was down across the lower-priced segments.
According to the latest monthly report prepared by the Houston Association of Realtors (HAR), May single-family home sales totaled 6,807 units compared to 7,110 a year earlier. Months of inventory, the estimated time it would take to deplete the current active housing inventory based on the previous 12 months of sales, increased to a 3.1-months supply versus 2.8 months last May. That is the highest level since October 2013, but still well below the current national supply of 5.3 months of inventory.
Home prices climbed to all-time highs, with the average price of a single-family home up 4.5 percent year-over-year to $292,040. The median price—the figure at which half the homes sold for more and half for less—soared 10.5 percent to $223,000.
May sales of all property types totaled 8,278 units, down 4.2 percent compared to the same month last year. Total dollar volume was flat at $2.2 billion.
“We have had our ups and downs with home sales this year, but HAR predicted declines due to uncertainty about oil as well as tight inventory, so none of this comes as any surprise,” said HAR Chair Nancy Furst with Berkshire Hathaway HomeServices Anderson Properties. “We are on our way to a more normalized housing market after a record-setting 2014, and just like an airplane coming in for a landing, passengers are told to expect the possibility of some dips and bumps on approach.”May Monthly Market Comparison
The Houston housing market had a mixed bag of indicators in the May 2015 versus May 2014 analysis, with single-family home sales and total property sales down, total dollar volume flat, and prices up to the highest levels of all time. Month-end pending sales for single-family homes totaled 8,127, a 3.0 percent decline versus one year earlier.
Houston’s housing inventory expanded in May to a 3.1-months supply versus the 2.8-months supply of one year earlier. That matches the inventory level of October 2013, but is well below the current national supply of homes which stands at a 5.3-months supply, according to the National Association of Realtors.
CATEGORIES MAY 2014 MAY 2015 CHANGE Total property sales 8,642 8,278 -4.2% Total dollar volume $2,282,469,582 $2,273,177,479 -0.4% Total active listings 28,712 30,550 6.4% Single-family home sales 7,110 6,807 -4.3% Single-family average sales price $279,422 $292,040 4.5% Single-family median sales price $201,750 $223,000 10.5% Single-family months inventory* 2.8 3.1 9.1% Single-family pending sales** 8,378 8,127 -3.0%
* Months inventory estimates the number of months it will take to deplete current active inventory based on the prior 12 months sales activity. This figure is representative of the single-family homes market.
** Effective May 2015, in an effort to be consistent with industry standards, the Houston MLS is now including all categories of pending sales in its reporting. Previously, the Houston MLS did not include “option pending” and “pending continue to show” listings in its reporting of pending sales. The new methodology is now all-inclusive for listings that went under contract during the month.