According to Houston Association of Realtors, the Houston real estate market seemed to be heading towards a “soft landing” in August, with a noticeable slowdown in declining sales, the lowest rate seen in over a year. While there were still some negative indicators for the month, the local housing market is showing signs of returning to more typical seasonal trends. However, consumers are keeping a watchful eye on the persistently high interest rates and home prices.
Key Findings
- Single-family home sales were down 3.8 percent year-over-year in August, the 17th consecutive month of slowing sales volume, however there continued to be signs of overall improvement to the Houston housing market
- Days on Market (DOM) for single-family homes rose from 32 to 42 days
- The single-family median price was statistically unchanged at $339,000
- The single-family average price rose 2.5 percent to $420,124
- Single-family home months of inventory registered a 3.3-months supply, up from 2.4 months a year earlier – the biggest supply in three years
- Townhome/condominium sales experienced their 15th straight monthly decline, falling 19.0 percent, with the median price up 3.2 percent to $225,000 and the average price up 2.7 percent to $260,909
- Compared to pre-pandemic 2019, townhome and condominium sales were down 13.0 percent.
Analysis
The Houston real estate market is showing signs of settling into a more balanced state after an active period of activity during the pandemic. While sales are still down on a year-over-year basis, the rate of decline is slowing, and home prices are stabilizing.
One of the most notable trends in the August market report is the increase in months of inventory. Months of inventory is a measure of how long it would take to sell all of the homes on the market if sales remained at their current pace. A 3.3-month supply is considered to be a balanced market, where neither buyers nor sellers have the upper hand.
The increase in months of inventory is a good sign for buyers, as it gives them more options to choose from and more bargaining power. However, it is also a sign that the market is cooling off and that sellers may need to be more flexible on price in order to sell their homes quickly.
Overall, the Houston real estate market remains in a good position, despite the challenges of rising interest rates and inflation. The economy is strong, and the population is growing. These factors are likely to support demand for housing in the long term.
Advice for Buyers and Sellers
If you are a buyer, the current market conditions are good for you. You have more options to choose from and more bargaining power. However, it is important to be prepared to act quickly, as homes are still selling relatively quickly.
If you are a seller, you may need to be more flexible on price in order to sell your home quickly. The market is cooling off, and there is more inventory on the market. However, the economy is strong, and there is still demand for housing.
Whether you are a buyer or a seller, it is important to work with a experienced real estate agent who can help you navigate the market and get the best possible deal.
