The Houston residential real estate market remains sound with median priced homes continuing to perform well. Higher-priced home sales remained challenged with the slowing of the high paying oil & gas jobs and the entry-priced homes declining in sales as builders face challenges with rising land and production costs. Demand continues to hold in moderately priced housing and the residential market continues to perform well. Following record sales to date for 2016, the Houston Association of Realtors reported Houston home sales in July decreased for the first time since January.
According to the July 2016 MLS Report released on August 10, 2016:
- July 2016 had a total of 7,204 sales vs 7,898 in July 2015, marking the Houston markets first sales decline in six months. However, month-end pending sales for single family homes totaled 7,979, an increase of 11.4% year over year indicating that this may be a one-month statistical aberration.
- "We never like to see a decline in home sales, but it’s helpful to remember that our comparisons each month are to a record year in 2015," said HAR Chairman Mario Arriaga with First Group. "July was the first time in several months when even mid-range housing saw declines. It’s hard to identify a single cause for the drop in sales, whether it’s a possible trickle-down effect of falling oil prices or prospective buyers holding out, but Houston’s housing market is still healthy overall.”
- The median home price in July 2016 was $230,000 vs $221,000 in July 2015, an increase of 4.1%.
- Total single-family home inventory increased to 4.0 months’ supply vs 3.5 months’ supply a year earlier as additional listings were added into the market. For perspective, the housing inventory across the U.S. currently stands at a 4.6 months’ supply per the National Association of Realtors (NAR). Anything below 6.0 months’ supply is considered a tight market.
The Economy at a Glance:
- Houston added 5,500 new jobs in June a 0.2% year over year increase from June 2015. Sectors recording notable growth in June were leisure and hospitality (+ 9,000 jobs), manufacturing (+1,900 jobs) and professional and business services (+1,600 jobs). The largest losses recorded were in the government (-6,500 jobs) and construction (-4,000 jobs) sectors.
- The Houston metro area unemployment for June increased from 4.8% in May to 5.5 % in June. Unemployment rates typically increase during the summer months as public education and government post temporary job losses due to employees on 10-month contracts.
- Houstonians purchased a record number of single-family homes in the first half of 2016 as an influx of new listings pushed inventory to a nearly four-year high, according to data from the Houston Association of Realtors. Single family sales totaled 36,393 units through the first six months of 2016, a 2.7% increase from the 35,448 units sold during the same period last year.
- The Houston Business Journal reported that ‘Texas continues to be one of the top states in the U.S. for business, according to the latest edition of an annual survey conducted by CNBC. Texas scored highest in the economy and infrastructure categories, coming in at first and second, respectively.”
The Houston single-family residential market continues to show strength year to date despite the recent months drop in volume. Long term employment and economic forecasts support sustainable growth. Should you have any questions, please feel free to contact our office at (713) 535-2250. For more information on our company, please visit our website at www.mcalisterinv.com .
Jim McAlister, Sr.