The Houston residential real estate market continued its steady growth in May. Demand for housing continues to increase and push pricing higher across the market. The pace of sales in moderate and luxury priced housing continues to lead the way. Overall, the residential market continues to demonstrate healthy and sustainable growth.
According to the May 2017 Houston MLS Report released on June 13, 2017:
- May 2017 had a total of 8,156 single family home sales vs 7,315 in May 2016, an increase of 11.5% year over year.
- The strongest home sales activity took place among homes in the $750,000+ range with an increase of 27.6% followed by homes in the $150,000 to 249,999 range which increased by 13.7%. Both indicate continued strength in the demand for housing. For the luxury market, which took the brunt of the hit during the energy slump, May marked the 7th consecutive month of sales gains.
- "The Houston housing market had another strong showing in May with sales and rental properties alike, and inventory continues to accommodate the growing demand,” said HAR Chair Cindy Hamann with Heritage Texas Properties. "If we can maintain this pace, there’s no doubt that 2017 will be a record year for Houston real estate."
- The median home price in May 2017 was $235,000 vs $225,000 in May 2016, an increase of 4.4%, that marks the highest median price of all time. The average price climbed 4.3% to a record-high of $302,362.
- Total single-family home inventory increased to 4.1 months’ supply vs 3.6 a year earlier as additional listings were added into the market. The housing inventory for the U.S. currently stands at a 4.2 months’ supply per the National Association of Realtors (NAR). Anything below 6.0 months’ supply is considered a tight market.
- May 2017 sales of all property types in Houston totaled 9,744, an increase of 12.3% year over year.
Texas Workforce Commission, GHP and Baker Hughes:
- In April 2017, 18,700 new jobs were added to Houston, representing one of the best April job growth performances in the past 35 years. Total jobs increased 1.4% year over year.
- Houston metro area unemployment decreased in April to 5.3%, down from 5.7% in March 2017.
- Population growth continues to drive job gains in a number of sectors: Professional and Business Services, Leisure and Hospitality and Trade, Transportation and Utilities. Professional and business services added 7,000 jobs in April ’17, Leisure and hospitality added 4,700 jobs and Trade, transportation and utilities added 4,200 over the month of April. These sectors were supported by the 125,005 residents added to the region in ’16, about one new Houstonian every four minutes. Six of the nation’s most populous cities are now in Texas – Houston, San Antonio, Dallas, Austin, Fort Worth and El Paso.
- The Baker Hughes Oil & Gas Rig Counts increased to 893 in May 2017, up 121% from the bottom of 404 in May 2016, demonstrating sustained growth in the energy market as producers continue to be more cost effective.
Houston’s financial and real estate markets continue to benefit from population growth and increasing job growth. For Texas, we see continued job growth in 2017 and accelerated growth in 2018. The Texas metro single-family residential markets are positioned to flourish from pending 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