HOUSTON – The Houston Association of Realtors reported 7,454 single-family homes were sold last month – the best August on record and the eighth best month ever for the city’s housing market.
Sales so far this year indicate that homes are selling at the nearly same pace as last year –an impressive rate considering that 2014 was the best year ever for home sales.
The 7,454 homes sold in August represents a 0.6 percent gain over 7,407 sold in August 2014.
“The Houston housing market has been robust in 2015, keeping pace with last year’s record-breaking numbers and August turned out to be flat, by and large,” says HAR Chair Nancy Furst with Berkshire Hathaway HomeServices Anderson Properties.
Extreme volatility in oil prices sent shock waves thorough the Houston economy in August. West Texas Intermediate crude dropped below $40 a barrel to its lowest point in six years.
More layoffs have occurred and there’s an overhang of dread as energy company mergers and acquisitions come down the pipeline. The M&A means consolidation and workforce reductions as duplicative employees are discarded.
But, the city has gained over 64,000 jobs over the last 12 months, even though woes in the oil business have battered the local economy, job growth has tailed off lately and conditions are expected to get worse.
However, Houston’s economy is not a one-trick pony. Medical care and sectors other than energy have racked up major job growth.
Housing also has been elevated by Houston’s population growth. Houston has an estimated 1,000 people a week moving to city. In recent years, Houston had led the nation in population growth.
This has driven home prices upward, tightened the housing supply and outstripped the ability of home builders to build houses fast enough.
“The problem with the residential market is we can’t develop enough lots. That’s the issue,” said Patrick Jankowski, regional economist with the Greater Houston Partnership. “We need to get more lots developed. If we could create a few more, it would lower lot prices, which would lower home prices.”
The Houston area’s population rose to 6.6 million last year, a gain of 156,000 people from 2013. Some of those numbers represented the natural growth of children being born, but there thousands of newcomers relocating to city.
“We’ve had 270,000 people move here in the last five years,” Jankowski said. “That’s why the roads are congested and that’s why housing prices are up.”
In August, the average price of a single-family home was $282,333, up about 3 percent from last August, reported HAR. The area’s median price – the midpoint where half the homes sold for more and half for less – was $215,100, up about 5 percent from last August.
The inventory of homes for sale was up slightly in August, but it was still far below the historical norm of years past.
Months of inventory, the estimated time it would take to deplete the current active housing inventory based on the previous 12 months of sales, rose from a 3.0-months supply last August to a 3.5-months supply. That is slightly above the 3.4-months supply in July 2015, but remains below the current national housing supply of 4.8 months of inventory.
Pending sales look strong. HAR reported that there are still a lot of homes under contract and sales activity should be strong again in September and October.
The spring and summer selling season is over and the slower sales months of the fall and winter won’t deviate from the traditional pattern.
But 2015 turned out to be an excellent year. HAR itself predicted that home sales would be off 10 percent this year.
This writer, Realty News Report editor Ralph Bivins, has predicted all year long that 2015 would be the best year ever for home sales in Houston.
And so far, sales in 2015 are close to last year’s record pace. It’s going to be down to the wire – a photo finish.
Year-to-date through August a total of 51,233 single-family homes have been sold, up 0.7 percent from 50,889 sales in the comparable period of 2014. Sales are ahead by 344 homes over last year.
Can 2015’s sales match the sales of 2014 – the highest annual sales volume Houston has ever seen? When the final tally comes in, there’s no doubt 2015 will go down as one of the best if not the best year ever for Houston home sales.
Realty News Report continues to hold to its forecast from the beginning of the year: 2015 will be the strongest year ever for home sales in Houston.
By Ralph Bivins, Editor – Realty News Report