Property sales and prices continue to rise in Houston while inventory levels remain well below the national rate. This added to high rental rates and the recent stabilisation in oil prices leads experts to predict a seller’s market for Houston property for what remains of the year.
Figures released by the Houston Association of Realtors (HAR) show a record year for April. Sales of single family homes (6,502 in total) were the highest ever for this month, typically one of the busiest of the year. Pending sales of Houston properties also rose prompting experts to predict high completed sales figures for the forthcoming months. The average price for single family homes rose by 4.3 per cent year-on-year to US$281,724.
In terms of inventory levels, they reached 2.9 months, slightly above the 2.6 months registered in April 2013. However, despite this minimal increase, the Houston property inventory remains considerably below the national level of 4.6 months and well beneath the 6 months that experts believe to be a sign of a balanced market.
This buoyant property scenario comes against a background of falling oil prices that many feared would strike a major blow to Houston’s economy. However, economic analysts note that this isn’t the case. Interviewed in the Houston Chronicle, local economist Ted Jones explained that this is because Houston has developed a broader-based economy. “It’s all about jobs,” he said, “even as rig counts continued to decline, Houston fared much better than most people thought.”
Nancy Furst, HAR Chairperson, echoed this. “The Houston real estate market is doing quite well despite low inventory levels and concerns about the effects of declining oil prices,” she said commenting on property figures for April.
Jones claims that there’s still a lot of pent-up demand for property in Houston, driven by low interest rates and high rents. “There just haven’t been enough new rental properties geared towards the middle-income individual or family,” he said. This has led to a seller’s market in the city where there’s little sign of demand abating.
As far as the remainder of the year goes, Jones predicts there will be little change in inventory levels but he does not believe price rises will continue across the board. In particular, he sees a slowdown in the Houston luxury property market where price increases have been particularly steep over the last year. He does, however, expect plenty of movement within the entry-level market where he believes there will be a “renaissance, not just in Houston, but across the country as our entry-level home buyers come back into play,” he said. On the back of this, he forecasts strong activity in this sector of the market throughout the US.
Source: HAR, Houston Chronicle