HOUSTON – In the strongest September on record, the Houston Association of Realtors reported 6,691 single-family homes were sold in September, a 3.5 percent increase over September of last year.
However, HAR reports a slight decrease in “pending sales” a statistic that indicates sales activity could be slowing. Traditionally home sales slow down in the fall, as the holiday seasons approach.
Buyers appear to be more cautious in recent weeks because of uncertainty in the local economy, the falling oil prices and the fluctuations in the stock market, said Amy Bernstein of Bernstein Realty.
“Buyers are taking their time. Fewer buyers are rushing to get in right now,” Bernstein says. “We aren’t seeing as many multiple offers. We aren’t seeing the frenzy that we were seeing.”
Year-to-date single-family home sales through September totaled 57,302, basically unchanged from the 57,352 homes sold in the first nine months of 2014. Last year was a record-setter for home sales, the best annual sales total ever recorded in Houston.
Houston has a 3.5-months supply of inventory for sale – indicating how long it would take to deplete the total supply of homes for sale. The inventory is slightly larger now than last year, but still very low by historical standards. A 6-months inventory is considered a balanced market.
“There are still a lot of buyers out there,” said Cheri Fama, president of John Daugherty Realtors. “They are finding that the inventory is still low.”
The low inventory of homes for sale applies upward pressure on home prices. The median price of a home sold in September was $208,000, up 4.5 percent from September 2014, HAR reported.
Many had expected the decline in the energy industry to derail the housing market in 2015. But that did not occur.
West Texas Intermediate crude was $46.64 a barrel Wednesday, after being as high as $107 a barrel in 2014. This decline in oil prices damaged Houston’s energy companies and thousands of people have been laid off.
However, the low energy prices also dropped price for natural gas, which is used in petrochemical production, which shifted into high expansion.
“This is the best oil downturn we’ve ever had in Houston,” says Ted Jones, chief economist for Stewart Title. “Historically, when oil goes down, Houston’s economy declines.”
But the local economy has dodged the oil-inspired downturn, for the most part.Jones said there are over $300 billion in petrochemical plant expansions on the Gulf Coast – either under construction or planned to start by 2018. This activity has been a significant economic generator for Houston.
How has housing maintained so much strength in the oil bust? Even though energy jobs have been lost, the Houston economy gained in other sectors. Plus mortgage rates are low and population gains are strong.
Jones says higher rates for rental housing have also stimulated home sales.
Editors note: At the beginning of the year, Realty News Report predicted that 2015 would be the best year ever for single-family home sales in the Houston area. Editor Ralph Bivins reiterated that forecast today.
Oct. 15, 2015