August was Best Month for Home Sales in Houston Real Estate History

HOUSTON – August was the best month for home sales in the history of Houston real estate, with a record 7,914 homes sold, the Houston Association of Realtors announced Wednesday.

The monthly sales total surpassed the previous monthly sales record set in July 2015 when 7,898 homes were sold, HAR reported.

The strong August continued an exceptionally strong year for sales in Houston, which is poised to set an annual record for sales in 2016. On a year-to-date basis, home sales are up 1.5 percent compared to the eight month recorded in 2015.

“August sales were strong and it was widespread throughout the city and it was widespread throughout all price ranges,” said Houston real estate broker Amy Bernstein of Bernstein Realty.

The powerful showing in Houston’s residential realty runs counter to some of the negative economic indicators in the city, which is known as the Energy Capital of the World. Energy companies have laid off thousands of employees and vacated huge chunks of office space. A number of economists are projecting that Houston will have miniscule net job growth in 2016, or possibly even lose jobs this year.

But mortgage rates remain low – below 4 percent, which is very attractive on a historical basis. And the city continues to gain population.

While the energy industry is down, other sectors of the Houston economy are performing well and the stream of executive relocations from other industries is steady, Bernstein said.

Sales activity in Houston may also be boosted by a more abundant inventory of homes for sale. A 6-months supply of homes is considered a balanced market. But for years, the inventory has been below 6 months and even dipped below 3 months for a while. The low inventory drove up prices and set up bidding wars. But some Realtors said it also discouraged buyers who kept seeing homes going under contract immediately before they had a chance to make an offer. Buyers had trouble finding houses they liked and the home-searching pace was usually rushed.

In August, the inventory of homes for sale rose to a 4-months supply, which meant buyers had more options. That is still low inventory by historical standards. On a national basis housing inventory across the U.S. currently stands at a 4.7-months supply, according to the latest report from the National Association of Realtors

HAR reported the median price rose 4.2 percent to an August high of $225,000. The average price climbed 2.4 percent to $289,519, also a record high for an August. Days on Market (DOM), or the number of days it took the average home to sell, edged up to 50 days versus 45 last year.

The upper-end of the housing market has been softer for much of the year. But August represented a reversal of that trend. Homes priced at $500,000 and up were up 5.8 percent over August 2015.

Overall HAR reported 7,914 single-family home sales in August, up 8.2 percent from August of 2015.

Houston home sales ended the summer with exceptionally strong surge. Despite the oil crash, home sales has been ahead of last year’s sales pace all year long and it looks like 2016 could be the strongest year ever for Houston home sales.