Multiple offers push prices to new record highs
HOUSTON — (April 13, 2022) — Undaunted by rising mortgage interest rates and a record low supply of homes across Greater Houston, consumers kept the local real estate market in positive territory in March. While new listings are entering the market each week, buyer demand has consistently outpaced that supply, and multiple offers on homes continues to push pricing into record territory, solidly positioning Houston as a sellers’ market.
According to the Houston Association of Realtors’ (HAR) March 2022 Market Update, single-family home sales increased 4.1 percent with 9,693 units sold compared to 9,309 in March of 2021. On a year-to-date basis, the market is running 10.8 percent ahead of last year’s record pace. The rental market is also strong as consumers that find themselves unable to purchase a home for the time being are instead opting to lease.
Homes priced between $500,000 and $1 million led the way in sales for the month, registering a 36.1 percent year-over-year gain. The $250,000 to $500,000 housing segment came in second place, climbing 24.0 percent. That was followed by the luxury market – consisting of homes priced at $1 million and above – which increased 16.0 percent.
A continued shortage of available homes below $250,000 has left consumers no choice but to shop for higher-priced homes or to lease. It remains to be seen if mortgage rates, which topped 5 percent last week for the first time in years, will slow the pace of homebuying in April.
After reaching record prices in February, buyers pushed pricing to even higher levels in March. The average price of a single-family home rose 11.4 percent to $410,923 while the median price jumped 15.5 percent to $335,000. This marks the first time that pricing for a single-family home in Houston has surpassed $400,000.
“We are experiencing unprecedented market conditions in Houston with a frenetic pace of homebuying despite limited inventory, rising prices and steadily climbing interest rates,” said HAR Chair Jennifer Wauhob with Better Homes and Gardens Real Estate Gary Greene. “This is taking place amid a backdrop of continued supply chain problems and rising prices for everything from gasoline to groceries, which only adds to consumer pressures. We expect to see buyers start to pull back a bit until conditions stabilize, if indeed they do.”
Lease Property Update
Houston’s lease market enjoyed a positive March overall, still benefitting from consumers that have postponed homebuying plans until the market hopefully yields a broader and more affordable supply of housing. Single-family rental homes rose 18.3 percent year-over-year. Leases of townhomes and condominiums were unchanged. The average single-family rent rose 6.7 percent to $2,075 while the average rent for townhomes and condominiums increased 7.6 percent to $1,852.
March Monthly Market Comparison
The Houston real estate market had another strong month of sales despite the persistent record low supply of homes, soaring prices and rising interest rates. Single-family home sales increased 4.1 percent year-over-year. On a year-to-date basis, sales are 10.8 percent ahead of 2021’s record pace.
With the exception of active listings (the total number of available properties), all of the monthly measurements showed positive readings. Pending sales rose 3.8 percent. Sales of all property types increased 4.3 percent year-over-year, totaling 12,149, and total dollar volume for March increased 15.7 percent to $4.6 billion.
Months of inventory was flat at a 1.3-months supply, which is just slightly above the lowest level of all time. Over the past year, its highest level reached was a 1.8-months supply in August 2021. Housing inventory nationally stands at a 1.7-months supply, according to the latest report from the National Association of Realtors (NAR). A 6.0-months supply is traditionally considered to represent a “balanced market,” in which neither the buyer nor the seller has an advantage.
Single-Family Homes Update
Single-family home sales increased 4.1 percent in March with 9,693 units sold throughout the greater Houston area compared to 9,309 a year earlier. Strong sales volume among higher-end homes pushed pricing up to historic highs. The median price climbed 15.5 percent to $335,000 while the average price rose 11.4 percent to $410,923. These prices are not only new record highs, but the average price represents the first time that single-family pricing has exceeded $400,000.
Days on Market, or the actual time it took to sell a home, fell from 46 to 38 days. Inventory registered a 1.3-months supply compared to 1.3 months a year earlier. That is only slightly above Houston’s lowest inventory level of all time – 1.2 months, which was recorded in February 2022. The current national inventory stands at 1.7 months, as reported by NAR.
Broken out by housing segment, March sales performed as follows:
- $1 - $99,999: decreased 32.9 percent
- $100,000 - $149,999: decreased 31.3 percent
- $150,000 - $249,999: decreased 36.9 percent
- $250,000 - $499,999: increased 24.0 percent
- $500,000 - $999,999: increased 36.1 percent
- $1M and above: increased 16.0 percent
HAR also breaks out sales figures for existing single-family homes. Existing home sales totaled 7,566 in March. That was up 3.3 percent from the same month last year. The average sales price rose 12.8 percent to $409,788 while the median sales price climbed 14.0 percent to $325,000. Both represent the highest existing home prices of all time and the first time pricing for this housing category has exceeded $400,000.
For HAR’s Monthly Activity Snapshot (MAS) of the March 2022 trends, please click HERE to access a downloadable PDF file.
Townhouse/Condominium Update
Townhouses and condominiums had another positive month in March. Sales volume rose 8.7 percent with 861 closed sales versus 792 a year earlier. The average price climbed 5.8 percent to $255,334 and the median price jumped 10.4 percent to $215,000. Neither figure surpassed the record highs that were established last month. Inventory fell from a 2.7-months supply to 1.4 months.
Houston Real Estate Highlights in March
- Single-family home sales increased 4.1 percent year-over-year;
- Days on Market (DOM) for single-family homes dropped from 46 to 38;
- Total property sales rose 4.3 percent with 12,149 units sold;
- Total dollar volume increased 15.7 percent to $4.6 billion;
- The single-family average price rose 11.4 percent to $410,923, the highest of all time, and the first time that pricing has topped $400,000;
- The single-family median price increased 15.5 percent to $335,000 – also a record;
- Single-family home months of inventory registered a 1.3-months supply, unchanged from one year earlier;
- Townhome/condominium sales rose 8.7 percent with the average price up 5.8 percent to $255,334 and the median price up 10.4 percent to $215,000;
- Single-family home rentals rose 18.3 percent with the average rent up 6.7 percent to $2,075;
- Townhome/condominium leases were unchanged with the average rent up 7.6 percent to $1,852.