Houston Housing Market Report The Houston housing market entered 2020 off a momentous record-breaking run. Single-family home sales passed the previous year’s record by almost 5%.
The Houston housing market entered 2020 off a momentous record-breaking run. Single-family home sales passed the previous year’s record by almost 5%. This is driven by low-interest rates, strong employment growth, and a stable supply of homes.
But what is the outlook for this city?
And perhaps more importantly, what should you look for when analyzing a market?
This post will lay out the fundamentals for investors, sellers, and homebuyers. In addition, we’ll give you a sense of the market trends, our projections, and tell you why we love Houston.
“Tech, talent, and low taxes continue to fuel Texas’ rising status as an inevitable, leading force in the U.S. economy. 2020 will be another year where companies and people from around the country relocate to the Lone Star State, leaving most of the rest of the country in envy of the growth in Dallas, Houston, and Austin.”
Ian Anderson, Americas head of office research at CBRE.
Houston is currently a buyer’s market. Interest rates are at an all-time low. Home sales have spiked due to pent up demand from stay-at-home orders, and buyers are in a good position to get amazing deals.
Job growth is the most important indicator of real estate stability, and roughly 275 people move to Houston.
Here's why:
Houston’s growth rate is phenomenal, considering it is already the 4th largest city in the U.S. Even moreso, Houston’s median home value of ~$191,907 is fantastic considering its size, industry, and growth.
2019 ended with record-high median and average home prices, and a lower Days on Market (DOM). Low-interest rates, strong employment growth, and a stable supply of homes gave 2019 a massive 5% increase in sales over the previous year.
April and May 2020 recorded double-digit decrease in home sales due to the pandemic. Supply and demand tightened across the country. As we stepped into July, Houston saw a record number in sales for single-family homes due to a surge from lifting the stay-at-home measures. 10,975 single-family homes were sold in July - a 23% increase over last year and marking the first time the 10,000 marks has ever been broken.
This has pulled median and average home prices up 8.7% and 8.5%, respectively, despite the economic slowdown caused by COVID-19. Year-to-date sales are now 2.7% ahead of the prior year’s record pace, and total sales dollar volume for July increased 33.8% to $4.1 billion.
This surge will not be sustainable, of course, but we expect Houston’s housing market to outpace the rest of the country for 2020 due to its robust and growing job industry.
Here are some trends to look out for:
For the next year, prices will normalize after this surge keeping the market skewed towards the buyers. Some buyers could be discouraged by uncertainty, that same uncertainty will keep rates low. Low rates provide an opportunity to capitalize on significantly reduced borrowing costs and combined with the aforementioned job growth - buyers will be in a great position to find amazing deals.
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