THE HOUSTON REAL ESTATE MARKET CHARGES ACROSS THE FINISH LINE FOR A RECORD 2019
December marks the biggest percentage increase of the year in home sales
HOUSTON — (January 8, 2020) — Low mortgage interest rates, healthy employment growth and a stable supply of homes created fertile ground for the Houston real estate market, which blossomed to record levels in 2019. Single-family home sales for the full year surpassed 2018’s record volume by nearly five percent. December delivered the year’s strongest percentage increase in single-family home sales. However, as 2020 gets underway, housing inventory has shrunk slightly, which could narrow options for consumers that may be hoping to buy a home in the new year.
According to the Houston Association of Realtors’ (HAR) latest annual report, 2019 single-family home sales rose 4.8 percent to 86,205. Sales of all property types totaled 102,593, which represents a 4.3-percent increase over 2018’s record volume and marks the first time that total property sales have ever broken the 100,000 level. Total dollar volume for 2019 climbed 6.7 percent to a record-breaking $30 billion.
“During the latter half of 2019, we had a sense that we were headed toward a record year for Houston real estate, but no one expected it to be this strong a finish,” said HAR Chairman John Nugent with RE/MAX Space Center. “Townhomes and condominiums had a roller coaster ride and the luxury market cooled a bit, but overall, 2019 was a phenomenal year. As long as the Houston economy remains healthy and we see some growth in housing inventory, we expect 2020 to get off to a positive start,” he added.
Single-family home sales for the month of December jumped 14.3 percent to compared to December 2018. The strongest sales activity took place among homes priced between $250,000 and $500,000, which rocketed 27.2 percent. Homes in the $150,000 to $250,000 range ranked second place, climbing 13.7 percent. The luxury segment, consisting of homes priced from $750,000 and above, increased 12.7 percent.
Prices of single-family homes set new December highs. The median price (the figure at which half of the homes sold for more and half sold for less) rose 4.6 percent to $251,000 while the average price went up 2.5 percent to $312,922. Despite those highs, pricing increases in general began to show moderation as the end of the year drew to a close.
2019 Annual Market Comparison
Economic uncertainty loomed as 2019 began, with federal workers on edge about the continuing government shutdown and escalating trade friction with China. The Houston real estate market entered 2019 with constrained inventory. However, the housing supply grew almost immediately, rising from a 3.6-months supply in January to a peak of 4.3 months in June and July. Months of inventory estimates the number of months it will take to deplete current active inventory based on the prior 12 months sales activity.
Real estate records were set throughout the year, with July going down as Houston’s greatest one-month sales volume of all time – 8,918 single-family units sold. A record high average price of $322,143 was reached in May while a record high median price of $252,700 was achieved in June.
By the time the books were closed on December transactions, a record 86,205 single-family homes had sold across greater Houston in 2019. That represents an increase of 4.8 percent from the previous record of 82,229 in 2018.
On a year-to-date basis, the average price rose 2.3 percent to $305,959 while the median price increased 3.2 percent to $245,000. Total dollar volume for full-year 2019 rose 6.7 percent to a record-setting $30 billion.
December Monthly Market Comparison
The Houston housing market generated positive readings across the board in December with the exception of inventory. Single-family home sales, total property sales total dollar volume and pricing were all up compared to December 2018. Month-end pending sales for single-family homes totaled 5,796, an increase of 22.7 percent versus one year earlier. Total active listings, or the total number of available properties, rose 3.6 percent from December 2018 to 38,504.
Single-family homes inventory narrowed slightly from a 3.5-months supply to 3.4 months. For perspective, housing inventory across the U.S. currently stands at a 3.7-months supply, according to the latest report from the National Association of Realtors (NAR).