HOUSTON – Last month was the strongest April ever for home sales in Houston, despite a downturn in the energy industry, which has prompted local economists to issue gloomy forecasts.
But so far, local housing continues to outperform in 2015. Houston recorded the strongest April ever with record-high prices and a record number of homes sold for an April, according to the Houston Association of Realtors.
“The slowdown is more psychological than real. The Houston economy is booming,” says Realtor Caroline Allison with Keller Williams Metropolitan. “If you look at the Houston real estate market, it is up on every measure as compared to last year.”
The association reports 6,502 single-family homes were sold in the Houston area in April, typically a robust month as sales kick into high gear for the spring buying season.
Many have been expecting an economic decline in Houston because oil prices have fallen from about $108 a barrel last summer to about $60 a barrel today and major energy companies have announced layoffs. But so far, home sales in Houston are keeping pace with the sales of 2014, which was the best year ever for home sales in Houston.
“The Houston real estate market is doing quite well despite low inventory levels and concerns about the effects of declining oil prices,” says HAR Chair Nancy Furst with Berkshire Hathaway HomeServices Anderson Properties. “Realtors I speak to regularly tell me that business remains strong, and April’s uptick in inventory means consumers had the benefit of more homes hitting the market. We will have to watch and see how layoffs in the energy industry affect home sales in the months ahead.”
The Houston Association of Realtors predicted that the local housing market would soften in 2014, but it may take months before the slowdown in energy is felt in the local housing markets.
Home prices achieved record highs for an April, with the average price of a single-family home climbing 4.3 percent year-over-year to $281,724.
Townhome and condo sales in April were up over 6 percent in April, compared to April of 2014. The number of single-family homes sold in April was up 2 percent over last April.
Months of inventory, the estimated time it would take to deplete the current inventory of homes for sale, increased to a 2.9-months supply versus 2.6 months last April. The current national supply of homes for sale is 4.6 months of inventory.
Keller Williams’ Allison says the Houston’s bidding-war activity has cooled off somewhat, but home prices continue to rise as inventory of for-sale houses remains low.
“Buyers are experiencing fewer bidding wars, and real estate is continuing to grow at normal pace. Real estate is continuing to appreciate at a more normal pace; the frenzy from the oil bonanza days has tapered,” Allison says. “Once the oil prices come back, the frenzy and bidding wars will accelerate price increases.”
The number of “pending sales” was up sharply in April, indicating that May and June are likely to be strong also. At the end of April, pending sales for all property types totaled 6,717, a 39.8 percent increase versus one year earlier.