The Houston residential real estate market continued its upward momentum in February. Demand for housing continues to push pricing higher across the market and the pace of sales in moderately and luxury priced housing continues to increase. Overall, the residential market is performing extremely well with all-time highs in home pricing and a near-record pace of home sales.
According to the February 2017 MLS Report released on March 09, 2017:
- February 2017 had a total of 4,933 sales vs 4,743 in January 2016, an increase of 4.0% year over year.
- Homes priced between $250,000 and above saw the strongest sales volume, with the luxury market ($750,000 and above) enjoying a 4th consecutive month of positive sales.
- "Home buyers were busy throughout the Houston area in February, accounting for particularly strong activity among single-family homes priced at $250,000 and above, as well as in the townhome/condominium market,” noted HAR Chair Cindy Hamann with Heritage Texas Properties.
- The median home price in February 2017 was $220,000 vs $204,990 in February 2016, an increase of 7.3%, the highest median price ever for February. The average price climbed 6.7% to a record of $280,175.
- Total single-family home inventory increased to 3.5 months’ supply vs 3.4 a year earlier as additional listings were added into the market. The housing inventory across the U.S. currently stands at a 3.6 months’ supply per the National Association of Realtors (NAR). Anything below 6.0 months’ supply is considered a tight market.
Texas Workforce Commission and Baker Hughes:
- Houston created 18,700 in 2016 according to revised data released from the Texas Workforce Commission, up from the initial estimate of 14,800 jobs for the year. The revised employment data show that the worst is over. The February Houston Purchasing Managers Index registered 54.2 signaling economic expansion into metro Houston for the fifth consecutive month.
- In January 2017, Year over year, 9,300 new jobs were added to Houston, an increase of 0.3%. Houston lost 49,900 jobs from December to January. January always sees jobs loss due to holiday related seasonal layoffs. It is noteworthy to mention that the only sector that recorded modest gains is oil and gas.3
- Houston metro area unemployment increased in January to 5.8%, up from 5.3% in December 2016.
- The Baker Hughes Oil & Gas Rig Counts increased to 744 in February 2017, up 84% from the bottom of 404 in May 2016, signaling a stabilization in the energy market as producers have become more cost effective.
With Houston seeing continued increase in the Purchaser Managers Index, the local financial and real estate markets are feeling the tailwind. For Texas and Houston, the rebounding energy market supports moderate growth in 2017 and accelerated growth in 2018. The Texas metro single-family residential markets are poised to thrive from pending job growth, population growth, and an increase in first time homebuyers.
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Paul Connor , Hydie McAlister , Jim McAlister, Sr.
Principals, McAlister Investment Real Estate