Houston's housing market strengthened in April as buyers hunted for a limited number of moderately priced homes and, to a lesser extent, properties with seven-figure price tags.
Buyers closed on 7,070 single-family homes last month at a median price of $240,000, a record for this area, the Houston Association of Realtors said Wednesday in a monthly report.
Sales across the region were up 7% in April, rebounding after falling in March for the first time since Hurricane Harvey.
Buyers have been active across the region, from Conroe and The Woodlands to Fulshear and Richmond.
Still, the hurricane's impact on the market continues to be felt. Homes that flooded have lost value and investors are out buying.
Over the past year, the local office of real estate investor group We Buy Houses purchased more than 100 homes in the Houston area.
But unlike other investors, the company is shying away from flooded homes and instead buying fixer-uppers that stayed dry in Harvey.
"It is a very competitive market," CEO Jeremy Brandt said.
New homes that can be had for less than $300,000 also remain are hot sellers.
As demand shifted in recent years from high-end properties to more affordable ones, developers are creating communities targeting those cost-conscious shoppers.
Friendswood Development Co. said it is building a community in Baytown that will bring more than 1,400 new homes to the area.
The new project, to be called Baytown Crossings, follows the completion of Friendswood's Bay River Colony residential community in Baytown.
"The opportunity to acquire more acreage in this area along with the strong demands for affordably priced new homes create an ideal setting for this new community," Robert Santini, Friendswood's community development manager, said in a statement.
Houston's luxury market — homes priced at $750,000 and higher — was up about 5% after being flat for the previous two months, the realty association reported.
"I'm very positive," Nancy Almodovar, president and CEO of Nan and Company Properties/Christie's International Real Estate, said. "I haven't seen a decline, at least for our company, in the luxury market."
She noted a single-family home in Montrose that recently sold for $1.2 million in 30 days. And in River Oaks, new construction goes fast.
Million-dollar homebuyers, she said, want to be in walkable areas, close to restaurants and where they can ride bicycles and be active.
For the third straight month, the best-performing segment of the local market consisted of homes priced in the $500,000 to $749,999 range. Sales in that range spiked nearly 30%, according to the association, which tracks sales handled through the Multiple Listing Service throughout Harris, Fort Bend and Montgomery counties, as well as parts of Brazoria, Galveston, Waller and Wharton counties.
Housing supply continues to be quite low.
Single-family inventory was at a 3.6-month supply in April, down from last year.
"As long as inventory levels can keep up with the increased buyer demand, we would expect sales volume to remain strong in the months ahead," the association's chairwoman Kenya Burrell-VanWormer said in the report.
Brandt said his company has purchased some flooded homes, but with caution.
He's seen investors who bought flooded homes to fix up and flip unable to sell for what they were hoping to get.
"Regardless of how much a house has been fixed up," he said, "one of the first questions people are asking was 'Did it flood?'"
If it did, the would-be buyers are concerned about mold and other problems the house may have.
"What we're seeing is a flood-damaged house has a discount from what a non-flood-damaged house in the same area is selling for even though it might be in better condition," Brandt said.
Ultimately, many of the remodeled homes will become rentals. The demand will come from flooded homeowners who didn't have flood insurance or lost their properties to foreclosure.
"There's going to be a lot of people with bad credit because of not having flood insurance," Brandt said.
There were 4,561 single-family homes listed for rent on HAR.com at the end of April, down 21% from the same month a year ago.
Leases were up 2% last month and the average rent for was up 3.6% to $1,778.
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