Despite the challenge of Hurricane Harvey sweeping through the Houston region, destroying thousands of homes and leaving billions in damages, the Houston metro housing market remained strong. By the end of September, just four weeks after Harvey hit, the housing market saw home sales rebound and the greatest rental activity of all time. The positive momentum continued through the final months of 2017 and the residential real estate market set a new record for home sales. High demand continues to push pricing to record levels with sales in moderately priced housing leading the way.
According to the 2017 December and Full –Year MLS Report released on January 18, 2018:
- Year-end 2017 home sales ended with 79,117 sales vs 76,450 in 2016, an increase of 3.5% year over year.
- December single-family home sales rose 4.1 % to 6,875 versus December 2016.
- The strongest sales performance took place among homes priced between $250,000 and $500,000. Total property sales for the month climbed 3.5% to 8,125.
- Sales of all property types in 2017 totaled 94,726 units, a 3.5-percent increase over 2016’s volume, which was 91,530. Total dollar volume for single-family homes sold in 2017 rose 6.5 percent to $23 billion.
- "No one could ever have imagined 2017 turning out to be a record-setting year for the Houston real estate market, which had weathered the effects of the energy slump only to have Harvey strike such a devastating blow,” said HAR Chair Kenya Burrell-VanWormer. “We know that many are still working tirelessly to rebuild their lives after Harvey, but overall, this clearly illustrates the incredible resilience of the people and the economy of Houston, Texas.”
- The median home price in December 2017 was $230,000, an increase of 1.7%, and the average price dropped slightly by 0.6% to $292,174. On a year to date basis, the median price increased 3.8% while the average home price increased 2.9%.
- Single-family home inventory began the year at a 3.3-months’ supply, and ended 2017 with a 3.2-months’ supply. The housing inventory across the U.S. currently stands at a 3.4 months’ supply per the National Association of Realtors (NAR). Anything below 6.0 months’ supply is considered a tight market.
The Economy at a Glance2 and Texas Workforce Commission:
- In the 12 months ending December 2017, The Texas Workforce Commission reported that Houston has created 46,000 jobs, a 1.5% increase year over year indicating the continued upward trend from the oil slump of 2015 when the area only added 400 new jobs.
- Sectors recording notable growth in 2017 were professional and business services (+14,900 jobs), manufacturing (+8,800 jobs) and government (+8,000 jobs). The largest losses recorded were in the information services (-1,100 jobs) and construction (-800 jobs) sectors.
- The Texas Workforce Commission also reported that Texas added 306,900 seasonally adjusted jobs since December 2016, a growth rate of 2.5% year over year. Five of eleven major industries experienced over-the-month job growth, led by the Leisure and Hospitality industry, which added 6,800 jobs in December. The state’s unemployment rate closed the year at 3.9%.
- The Baker Hughes Oil & Gas Rig Counts increased to 930, up 130% from the bottom of 404 in May 2016.
For Texas and Houston, the continued rebound of the energy market supports accelerating job growth in 2018 and into 2019. The Texas metro single-family residential markets capped a record year and are poised to continue to prosper from job and population growth.
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Paul Connor , Hydie McAlister
Principals, McAlister Investment Real Estate