Houston’s supply of homes for sale dwindled to its lowest point ever last month, elevated home prices and making house-hunting more challenging for buyers.
The Houston Association of Realtors reported the supply of homes for sale in Houston area dipped to 2.9 months in November — the lowest supply number since the association began tracking the inventory statistics in 1996.
In December, traditionally the slowest month of the year, many people who want to sell their homes wait till the first of the year to list it for sale because of holidays.
“The first full week after the holidays in January, our phones will be ringing off the hook,” says veteran Realtor Amy Bernstein of Bernstein Realty. “A lot of sellers are sitting on the sidelines waiting to put their homes on the market in January.”
A total of 5,108 homes sold last month, up only 3 percent from 4,943 homes sold in November of last year, according to the Realtors association. The 3 percent gain over November 2013 was one of the weakest gains reported in the last two years.
“It does not come as a surprise that the Houston housing market is showing signs of slowing down,” said HAR Chairman Danny Frank with Coldwell Banker, United Realtors. “There simply isn’t a plentiful supply of available homes out there.”
November’s inventory of 2.9 months, which indicates how long it would take to sell all of the homes on the market at the current sales pace, broke the record set in October, when there was a 3.1 months supply. The peak was an 8.2 months supply in June of 1996. A year ago the supply stood at 4.1 months.
The upshot of today’s microscopic inventory is upward pressure in home prices. Houston’s median home price was $181,000 in November, up 8.7 percent from November of last year.
Houston’s housing market has registered 30 consecutive months of increasing monthly sales. The upper-end price brackets continue to perform exceptionally well. Homes priced at $500,000 and up reported a 23 percent increase in sales.
“The upscale market did not disappoint us as it has outperformed 2012,” says Cheri Fama, President and Chief Operating Officer, John Daugherty, Realtors. “Indicators point to an equally strong market in 2014 with companies moving many employees to Houston and buyers choosing our city for the amazing amenities and attractive cost of living.”
Houston’ exceptionally strong job growth and low mortgage rates have been continual supporters of the housing market surge. In the last two years, 30-year fixed-rate mortgages have dipped below 4 percent, the cheapest home loans in 50 or 60 years. And mortgages, although they have risen somewhat to around 4.5 percent, continue to be low when compared to the norm over the last 25 years.
However, mortgage rates are expected rise in 2014 and the Houston’s job growth is expected to moderate slightly next year. Houston will have to emerge from the holiday season for the housing market outlook to come into clearer focus. Although some may debate how long the winning streak can last, all agree Houston’s housing market has been outstanding in 2013.
A national survey of home builders released this week by the National Association of Home Builders showed that builders are reporting significant activity at year-end. Builder confidence looking forward to 2014 is much higher than expected.
For the Houston area, with major job creation announcements in December – Exxon Mobil and GEICO insurance both saying they will both add over 1,000 more employees over their current Houston workforce – the local housing market is set for a healthy future.
“Everybody seems to be very bullish,” Bernstein says. “I have every reason to believe 2014 will be equal to 2013. I don’t see any sign of a slowdown.”