Higher Prices, Lower Inventory
There may be signs of a slowdown in the long-surging Houston housing market. That's according to the latest monthly numbers from the Houston Association of Realtors (HAR), which show home sales in the Bayou City rose by 3.3% in November from the same month a year ago. However, that is the smallest year-over-year increase since June 2011. HAR Chairman Danny Frank says the figures show Houston is more of a seller’s market than a buyer’s market right now. "Prices are still going up, and that's a supply and demand issue," he tells KTRH. "We have more people coming in buying houses than we have houses available."
The availability issue is definitely showing up in the latest statistics. "The home inventory fell (last month) to 2.9 months of inventory, which is the lowest inventory we've ever had in Houston in the past history that we can think of," says Frank. Just one year ago, the inventory rate in Houston was 4.1 months. That reduced inventory has led to a continued spike in prices. The median home price and the average home price in Houston each rose by more than 8% in November. "Both were the highest price for November in Houston history," says Frank. He adds that there are other factors contributing to the price hike. "There's a lot of higher end homes, luxury homes, being sold in Houston that may be disproportionately skewing the numbers a little bit...but the numbers are what they are, it's a supply and demand issue."
The Houston housing market may be cooling off a bit, but it is still stronger than most other markets around the country. November was the 30th straight month of year-over-year increases in home sales for Houston, and sales of all property types were up by 5.6% from the same month a year ago. Overall, based on continued high demand because of the strong Houston economy and the dwindling inventory of available homes, these types of numbers will likely continue for the foreseeable future. "Our November numbers aren't surprising to us at all," says Frank.