The Houston and Gulf Coast residential real estate markets demonstrated its “Houston Strong” resiliency for the second month in a row after Harvey as home sales rebound and the rental market continued to rise in October.
According to the October 2017 Houston MLS Report released on November 8, 2017
- October 2017 had a total of 6,381 single family home sales vs 5,934 in October 2016, an increase of 7.5% year over year, indicating continued resiliency in the aftermath of Harvey. On a year to date basis, home sales remain 2.8% 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, with the greatest sales volume reported among luxury homes priced at $750,000 and above.
- Total single-family home inventory increased from 3.8 months a year earlier to 3.9 months’ supply. 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.
- "The overall Houston real estate market wasted little time recovering from Hurricane Harvey's devastation, but we’d like to see supply grow to meet ongoing consumer demand for housing," said HAR Chair Cindy Hamann with Berkshire Hathaway HomeServices Anderson Properties. "Hopefully, more balanced inventory levels can be restored by early in the new year."
- Pricing continues to be unaffected by Harvey. The median home price increased 3.9%in October 2017 to $226,491 vs $218,040 in October 2016, while the average price climbed 2.7% to $285,858. Both figures represent record highs for an October.
- October sales of all property types in Houston totaled 7,614, an increase of 6.6 % versus the same month last year. Total dollar volume climbed 10.8% to $2.1 billion.
Texas Workforce Commission, GHP, Baker Hughes:
- The Houston-The Woodlands-Sugar Land metro area lost 16,000 jobs in September, according to the Texas Workforce Commission (TWC). Nearly all of the losses can be attributed to Hurricane Harvey. While several sectors reported declines, four sectors accounted for the bulk of the loss: leisure & hospitality, retail, administrative support, and construction. Construction slowed as Harvey approached, halted as the storm soaked Houston and job sites had to dry out before construction could resume. The unemployment rate fell to 4.8% in September, down from 5.2% in August and 5.7% a year earlier.
- The Houston Purchasing Managers Index (PMI), a short-term leading indicator for regional production, registered a 49.3 in October, up from 48.6 in September. The October increase suggests the region is completing its recovery from Harvey. After 10 consecutive months of expansion, Hurricane Harvey pushed the PMI below 50 in August but the index has resumed its upward trend.
- The Baker Hughes Oil & Gas Rig Counts decreased slightly to 922 in October 2017. This level represents an increase of 128% 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