HOUSTON – (By Michelle Leigh Smith for Realty News Report) – A total of 9,890 single-family homes were sold in the Houston area in August, as the residential market continued to sizzle along with the summer heat.
Fourth Best Month Ever for Houston Realtors
The sales total in August represented the fourth highest month for sales in Houston real estate history, according to the Houston Association of Realtors.
“We saw more sellers eager to list their homes immediately to take advantage of the market,” says Keller Williams’ Christy Bulerez.“Sellers are becoming concerned that the market may decrease soon, and they are now hustling to beat the potential bust.”
Houston home sales in August were up 8.5 percent over August of 2020, the Realtors association reported.
While July 2021 saw a 36.7 percent year-over-year increase from 2020 in homes listed at above $750,000 area Realtors report prices continue to rise.
Across the nation, home prices have been rising rapidly in recent month. The median price of a single-family in Houston was $310,000 in August, up 15.2 percent over the median of $269,000 in August of last year.
“The confusing part of the market was we had a very strong spring, and those strong months were related to pent up demand from the pandemic along with low inventory,” says Ed Wolff, President of Beth Wolff Realtors. “That combination created a bit of a frenzy for about three months and that caused a national dialogue. In reality, it was a three-month bump in activity that with low inventories has continued to look like the market was skyrocketing, but it’s not. In July, activity cooled down and if you look at an average over last six months, you’ll see a 40-to-50-day market timeframe for days on market which is consistent with a sellers’ market, but a sellers’ market has always been defined with a six-month inventory. It will be a while before we get back there. People should not expect multiple offers and activity that exceeds the norm, especially if their pricing is not within 3 to 5 percent of a provable value.”
Prices Gains Moderating?
Susan Brock, Broker/Owner at Brock & Foster says, “Pricing overall is showing signs of moderation. We are seeing some communities and price points take a little longer to sell, with fewer showings. A ratio we often analyze is the list price to sales price ratio. This is going to tell you if buyers paid over asking price, or if they were able to obtain a discount from the seller. In June and July 2021 those numbers remained above 100%. However, August sales averaged only 99.6% of asking price.”
“The entry-level market is also a difficult market to crack for homebuyers, as they are experiencing a lot of competition and are continuing to look at making more creative / more seller-focused offers,” says Brock.
“The demand for homes is still high, which is driving the prices up in several areas,” says Keller Williams’ Bulerez. “Some areas are beginning to level out. Real estate trends change in every neighborhood, every month. It is very important to connect with an experienced Realtor to find out what is occurring in your neighborhood.
In the $500-$750K arena, prices rose 18.9 per cent in July, according to Houston Association of Realtors.
August was a record-breaking month in Bulerez’ business.
Home Attracts 31 Offers in 1 Weekend
Jeremy Fain, Broker Associate with Greenwood King sees home prices stabilizing in the middle of town as buyers are starting to cool their jets. “The suburban markets are still quite active driving some prices up. He continues to witness the phenomenon of multiple offers. “If the home is priced well and shows well, absolutely,” says Fain. “This is especially true in the suburban markets. I put a listing on last week and received 31 offers on it over the weekend.”
Bulerez observes the same. “There are still more buyers shopping for homes than homes available on the market. The homes that are receiving multiple offers are those that are remodeled and move in ready, or those that are very affordable.”
Will home prices go down in the coming months?
“I think they will level out just like they did in 2014,” says Fain. “I think more inventory will be coming on the market which will make it a bit more competitive for sellers.”
Bulerez sees some variation. “I believe solid home prices in Houston are around to stay for a while,” she notes. “We may see variations in certain sectors of real estate or in certain areas of the city. If we see a decrease in home prices, it is my opinion that we will see it as a gradual decline.”
Sellers Market Continues
Is Houston still a “sellers’ market”, with the sellers having the upper hand over the buyers? “With the inventory of homes for sale so tiny and homes selling so quickly and prices going up – it’s been a sellers’ market,” says Bulerez. “ABSOLUTELY! It may slow or balance a bit, but I anticipate it will remain a seller’s market for some time to come.”
“We were slow right as school started for a couple of weeks in August when people were taking their last fling but it’s picked up again – now everyone is out again,’ says Carol Knott Tefft with ReMax Integrity. She is consistently seeing more multiple offers.
“Houston is still a strong sellers’ market in many areas,” says Susan Brock. “We are still averaging 1.9 months inventory as of August 2021, which means it is a seller market. A balanced market would mean 6 months inventory. You can see that we have quite a way to go to achieve buyer/seller balance. The Houston market has less inventory than nationwide (1.9 months vs 2.6 months). The good news is that our homebuyers are still experiencing wins and successes in their searches, though it might take a few tries before they win the bid.”
“I think that term is relative because it all depends how you’re positioned in the market,” Fain notes. “There have been many sellers that have extremely overpriced their homes causing them to remain on the market for extended periods of time. Although there are many buyers they don’t want to deal with unrealistic or stubborn sellers. If a seller is realistic and prepares / prices accordingly within their specialized market they’re likely to get multiples and driving the sales price over their list price.”
“I think the market will remain strong but I think it will become more realistic with buyers and sellers becoming a bit more even in the playing field,” says Fain. “The inventory in general has been down coupled with a surplus of buyers trying to take advantage of low interest rates which has created a feeding frenzy,” says Fain. “There have been too many buyers for not enough homes.”
“Interest rates are good, and we say there’s a lack of inventory but the record number of sales surpass what we’ve done in the past,” says Tefft, with ReMax Integrity on in the north part of Harris County. She works mainly in the Tomball, Spring, and Conroe areas after a career teaching mathematics at Bellaire High School. “People are definitely defining the spaces they want, asking for more space, a pool, or they realize they now want to be in a different area. All of that is having an impact. Inventory have been low for a while and I don’t see it going up. The pandemic caused people to cause people to rethink what is really important.”
There is optimism across the board, from real estate offices in The Woodlands to Webster. The Greater Houston Partnership’s Senior Vice President of Research, Patrick Jankowski, found in his most recent report that the Texas Workforce Commission estimates there are 240,000 Houstonians who are unemployed and actively looking for work, a dramatic improvement from the 470,000 out of work in April 2020.
Jankowski sees more jobs on the horizon and that should bode well for residential sales. “If the economy follows historic patterns, Houston should add 40,000 to 60,000 jobs through the remainder of ’21,” he says.
Sept. 8, 2021 Realty News Report Copyright 2021
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File: Houston Home Sales Hot In August