Despite the challenge of low oil prices and energy industry layoffs carried over from 2015, the Houston residential real estate market not only held steady throughout 2016 but set a new record for home sales. The demand continues to push pricing to record levels with sales in moderately priced housing leading the way.
According to the 2016 December and Full –Year MLS Report released on January 11, 20171:
- December home sales increased 5.3% to 6,628 vs 6,297 in December 2015
- Year-end 2016 home sales ended with a total of 76,449 sales vs 74,174 in 2015, an increase of 3.0% year over year.
- Homes priced from $150,000 to $500,000 and sales among luxury homes (priced at $500,000 and above) achieved impressive increases in November and December. Luxury home sales increased 22% in December year over year.
- Per HAR Chair Cindy Hamann with Heritage Texas Properties, “the year began on a cautionary note because of energy-related layoffs that did affect our higher-priced housing. But what we saw by the end of 2016 is the reflection of a truly diversified Houston economy... "
- The median home price in December 2016 was $225,903, an increase of 2.7%, the highest median price ever for December. The average price climbed 4.3% to a record of $294,512. On a year to date basis, the median price increased 4.5% while the average home price increased 1.1%.
- Total single-family home inventory increased to 3.3 months’ supply vs 3.2 a year earlier ending the year exactly where it began. The housing inventory across the U.S. currently stands at a 4.0 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 Commission3:
- In the 12 months ending December 2016, The Texas Workforce Commission reported that Houston has created 14,800 jobs, a 0.5% increase year over year despite the challenges in the energy industry.
- Sectors recording notable growth in December were trade, transportation and utilities (+4,300 jobs), manufacturing (+2,900 jobs) and education and health services (+1,700 jobs). The largest losses recorded were in the professional and business services (-5,800 jobs) and leisure and hospitality (-1,800 jobs) and sectors.
- The Texas Workforce Commission also reported that Texas added 210,200 seasonally adjusted jobs since December 2015 a growth rate of 1.8% year over year. The state has added jobs in 20 of the last 21 months. The state’s unemployment rate remained unchanged at 4.6% in December.
- The Federal Reserve of Dallas forecasts Texas Job Growth will be between 1.5% and 2.5% in 2017.
- The Baker Hughes Oil & Gas Rig Counts increased to 658, up 63% from the bottom of 404 in May 2016.
Activity and sentiment increased in the financial and real estate markets as 2016 concluded. For Texas and Houston, the rebounding energy market supports accelerating job growth in 2017 and into 2018. The Texas metro single-family residential markets capped a record year and are poised to continue to prosper from job and population growth.
Should you have any questions, please feel free to contact our office at (713) 535-2250. For more information on our
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McAlister Investment Real Estate
MLS Report: http://www.har.com/content/newsroom
2 Greater Houston Partnership: The Economy at a Glance: http://www.houston.org/economy/archives/