The Houston and Gulf Coast residential real estate markets demonstrated its “Houston Strong” resiliency for the 3rd month in a row after Harvey. Houston’s monthly housing market indicators yielded across the board gains in November with single family homes, total sales, median and average pricing and total dollar volume all up compared to November 2016.
According to the November 2017 Houston MLS Report released on December 13, 2017:
- November 2017 had a total of 6,184 single family home sales vs 5,758 in November 2016, an increase of 7.4% year over year, marking a 3rd straight month of positive recovery in the aftermath of Harvey. On a year to date basis, home sales remain 3.3% ahead of the 2016 volume despite Harvey’s assault across our region. All segments of the housing market enjoyed gains except for homes priced below $150,000 and those priced at $750,000 and above.
- Total single-family home inventory increased from 3.6 months a year earlier to 3.7 months’ supply. The housing inventory for the U.S. currently stands at a 3.9 months’ supply per the National Association of Realtors (NAR). Anything below 6.0 months’ supply is considered a tight market.
- "November was definitely a month for giving thanks as the Houston real estate market continued its post-Harvey comeback, however the challenge remains meeting consumer demand with inventory levels that are very low,” said HAR Chair Cindy Hamann with Berkshire Hathaway HomeServices Anderson Properties. “The key to boosting supply will be restoring salvageable homes to sellable condition and ramping up new construction, both of which we want to see sooner than later."
- Pricing continues to be unaffected by Harvey. The median home price increased slightly to .3% in November 2017 to $225,725 vs $224,995 in November 2016, while the average price climbed 0.9% to $284,250. Both figures represent record highs for a November.
- November sales of all property types in Houston totaled 7,270, an increase of 4.9% versus the same month last year. Total dollar volume climbed 8.4% to $2.0 billion.
Texas Workforce Commission, GHP, Baker Hughes:
- The Houston-The Woodlands-Sugar Land metro area gained 43,200 jobs in October, according to the Texas Workforce Commission (TWC). This represents the largest single-month gain on record. The record-setting growth reflects the post-Harvey effect, the post-summer improvement and perhaps a bump in the overall economy. The unemployment rate fell to 4.1% in October, down from 4.8% in September and 5.3% a year earlier.
- The Houston Purchasing Managers Index (PMI), a short-term leading indicator for regional production, registered a 52.8 in November, up from 49.3 in October. Readings above 50 signal economic expansion in Houston over the next 3-4 months. The region’s PMI pushed above 50 following three months post-Harvey, pointing to contraction.
- The Baker Hughes Oil & Gas Rig Counts decreased slightly to 911 in November 2017. This level represents an increase of 125% from the bottom of 404 in May 2016 demonstrating sustained growth in the energy market.
While Houston’s long-term financial and real estate markets will continue to benefit from population growth and increasing job growth, the short term effects of Harvey will be felt through the end of 2017. Overall, the Texas single-family residential markets continue to do well from the population growth, job growth, and an increase in first time homebuyers.
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Paul Connor , Hydie McAlister , Jim McAlister, Sr.
Principals, McAlister Investment Real Estate
Vice President, McAlister Investment Real Estate