After a quieter month in May, the Houston property market returned to frenzied activity in June recording the highest prices ever and quickest turnover levels of properties. According the experts, this illustrates that demand in the market continues to far run ahead of supply.
In terms of price, Houston property hit new levels in May and June registering record highs for both single family home and condos. The average price of single family properties reached the historic heights of US$283,697, a 6.6 per cent increase on June 2013. Condo prices came in at an average of US$205,026 representing a year-on-year rise of 5.5 per cent.
Some 9,100 units were sold in Houston in June, up 5.3 per cent on the same month last year. In addition, the properties sold were on the market for an average of just 46 days, the shortest time ever and a clear indicator of the urgency in the market.
The surge of interest in Houston property in June is believed to be a sign of the moderate increase in supply. According to the Houston Association of Realtors (HAR), “the new listings may finally be helping feed the voracious appetites of home buyers who have been stymied by the lowest inventory levels in 40 years”.
However, this increase in supply has been short-lived and while prices were reaching all-time highs, inventory levels in June plunged to the lowest ever. For the single family property market, the available stock dropped to 2.9 months, a figure that is even lower for condos (2.6 months). This lack of listings on the market severely limits house hunters’ choices.
In tandem with this imbalance of supply and demand, the market for long-term rental properties continues to boom. According to HAR statistics, the number of single family rentals have grown by a massive 18.6 per cent since June last year with condo rentals increasing by 7.5 per cent. The surge in demand has naturally led to a rise in rental prices with the average rent for a single family home and condo standing at US$1,800 and US$1,618 a month respectively in June 2014.
Houston is currently one of the economic hotspots in US with a high rate of businesses relocating to the city and the subsequent job creation. This together with the low stock means that prices for both resale and rental homes in Houston are likely to continue to rise.
Source: Houston Association of Realtors