HOUSTON – (By Ralph Bivins for RNR) – Some 11,000 homes were sold in Houston in July, a record-high that was 23 percent over the sales total of July 2019.
It was the first time a monthly sales total has surpassed 10,000, the Houston Association of Realtors reported..
Low mortgages rates, with 30-year, fixed-rate mortgages dipping below 3 percent, drove the home-buying frenzy.
The surge also represented a bounce of pent-up demand that arose this Spring when sales activity was suppressed by Covid-19.
In April and May, homes sales were down significantly because fear of Covid infection kept homebuyers from shopping for houses. And sellers were reluctant to put their houses on the market and have would-be buyers traipsing through, leaving germs on the light switches, door knobs and the like.
Plus, the local economy was in a frightening spiral and the coronavirus and a crash in oil prices brought on massive job losses in the Spring. Oil prices have stabilized around $40 a barrel – not great, but better than zero – and the hemorrhage of job losses has been curtailed.
So following the incredibly slow Spring, with the unleashing of pent-up demand, Houston hit a record 9,433 sales in June, followed by 10,975 single-family sales in July.
The June/July bounce-back represents a remarkable recovery from the ugliest Spring that Houston Realtors have seen in many years.
Year-to-date sales are now 2.7 percent ahead of 2019’s record pace. In May, year-to-date sales were running 6 percent behind the last year’s pace.
“We are grateful for two consecutive months of strong activity across greater Houston, however we do not consider the current pace of home sales sustainable given the shrinking supply of homes and expect business to taper a bit this fall,” said HAR Chairman John Nugent with RE/MAX Space Center. “Historically low interest rates make this an outstanding time to buy a home, but without the inventory, there unfortunately isn’t much out there for consumers.”
Concerns About Inventory Justified? … Probably Not
The inventory of houses for sale is tight.
Single-family homes inventory dwindled to a 3.0-month supply in July versus 4.2 months a year earlier, HAR reported.
But the Houston’s housing inventory has been much lower than 3.0-month supply before – quite often in fact over the last decade.
So while there can be no argument that inventory is constrained, it is not clear that the shortage of listings is severe enough to make a dent in this unpresented surge in home sales in Houston.
Pending home sales are phenomenal. HAR said 11,185 home sales were in the pipeline in July, a 34 percent increase over July of 2019.
So Houston’s residential market appears to have sufficient inventory to carry into the slower fall months without inventory problems causing a serious reduction in sales activity.
Home sales typically taper off during back-to-school time. However, nothing is typical in 2020 – not even the school bell.
Aug. 13, 2020 Realty News Report Copyright 2020
File: A Record 11,000 Homes Sold in July