Houston TX Housing Market Update for SEPTEMBER 2023
The Houston real estate landscape has been a rollercoaster ride, especially with the pandemic's uncertainties and the consistent increase in interest rates. However, fear not, as we have exclusive insights from the August 2023 Market Update provided by the Houston Association of Realtors (HAR). Let's delve deeper and examine how the market is gradually returning to a more stable condition. And for those who prefer visual content, don't forget to visit my YouTube channel, where I analyze this data in detail!
Understanding the Data:
Before we dive into the nitty-gritty, let's make sure we're all speaking the same language. This market update is like a detailed map that guides us through the intricate landscape of Houston's housing scene. It's a lens that magnifies the market's movements, giving us a crystal-clear picture of what's happening on the ground.
Overall Market Data:
August marked the 17th month in a row where Houston experienced a slowdown in home sales, a return to the seasonal patterns we saw before the pandemic hit. In a year-over-year comparison, single-family home sales dropped by 3.8 percent. To put it in perspective, when we look back to August 2019, before the pandemic, sales were down by 8.0 percent, and even when compared to August 2018, five years back, they were still down by 4.5 percent. The good news is that this 3.8 percent decline is the smallest we've seen since May 2022 when the market registered a 0.8 percent drop.
Not only did single-family home sales take a hit, but total property sales and total dollar volume also fell below last year's levels. The total dollar volume amounted to $3.8 billion, down from $3.9 billion the previous year. On the bright side, single-family pending sales increased by 2.2 percent, showing some positive signs. Active listings, representing the total number of available properties, were 14.8 percent higher compared to 2022.
The months of inventory expanded in August to a 3.3-month supply, the highest we've seen since May 2020 when it was also at 3.3 months. Interestingly, the national housing inventory is also at a 3.3-month supply, according to the latest report from the National Association of Realtors (NAR). Traditionally, a "balanced market," where neither buyers nor sellers have the upper hand, falls within a 4.0- to 6.0-month supply range.
Average and Median Home Prices:
In August, we saw single-family home sales take a 3.8 percent dip compared to the same time last year, with 7,983 homes finding new owners in the Greater Houston area, down from 8,301 in 2022. After a period of skyrocketing prices last spring, things seem to be leveling out. The average price for August went up by 2.5 percent, reaching $420,124, while the median price remained pretty much unchanged at $339,000.
For some context before the pandemic disrupted everything, August closings were 8.0 percent lower than they were in August 2019 when we had 8,673 sales. Looking at the numbers, the median price for August 2023, which stands at $339,000, has surged by 35.6 percent compared to 2019 when it was $249,975. And today's average price, at $420,124, is 35.5 percent higher than it was back then, when it was $310,139.
Taking a five-year view, our current sales are 4.5 percent lower than they were in August 2018 when we had a total volume of 8,355 sales. At that time, the median price was $238,200, and the average price was $300,169.
Seasonal Trends in Single-Family Home Sales:
Much like many other industries, the real estate sector goes through seasonal ups and downs. Analyzing the yearly tally of units sold provides valuable insights into how the market behaves. Traditionally, in Houston, the peak time for home sales falls within the summer months, particularly in May, June, and July.
When you take a five-year view and compare the number of units sold on a chart, it becomes clear that the market experiences higher levels of activity during those warmer months. This lines up with the peak moving season when many folks and families are on the move. On the flip side, as we head into the fall and winter, there's usually a slight dip in home sales as the market tends to slow down a bit.
Housing Inventory and Months of Supply:
The time it took to sell a home, often referred to as "Days on Market," saw an increase from 32 to 42 days. In terms of housing supply, there was a notable shift, with months of inventory standing at a 3.3-month supply, up from 2.4 months compared to the previous year. It's interesting to note that the national housing supply is also at 3.3 months, according to the National Association of Realtors (NAR).
Impact of Interest Rates:
Despite the ongoing downpour of interest rates dampening the spirits of buyers, the market continues to perform admirably. With a persistently low supply, the upward trajectory of single-family home prices remains robust.
And there you have it – a comprehensive look at the Houston housing scene in August 2023. While the market may not be setting any speed records, it's certainly displaying promising indications of regaining its rhythm. Yes, home sales might have taken a slight detour, but heed the words of Cathy Treviño, Chair of HAR, who reminds us that with every passing month, we're edging closer to that sought-after sense of "normalcy." So, whether you're contemplating the path to owning your dream home or opting for the flexibility of renting, remember this: the Houston housing market is steadily plotting its course back, one step at a time. Stay tuned for more updates as we ride this dynamic wave of change!
We hope this market update has provided you with valuable information about the current state of the Houston housing market. Stay tuned for future updates and analysis. If you have any further questions or require more specific information, feel free to reach out to us.
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Disclaimer: The information provided in this blog post is based on the latest available data at the time of writing, which is subject to change. It is intended for informational purposes only and should not be considered as financial or investment advice.