Houston is experiencing a pandemic-fueled housing boom
High-end home sales fueled the market in August while inventory fell to its lowest level in five years, culminating in one of the busiest summers ever for Houston housing.
Sales that normally would have taken place during the spring were pushed into the summer months due to early stay-at-home orders. That factor, coupled with demand from affluent Houstonians wanting nicer, larger homes after being cooped up for months, resulted in the highest number of August closings ever recorded.
Despite the pandemic, properties in hot areas saw multiple offers leaving trails of frustrated buyers wanting to take advantage of historically low mortgage rates.
Houston-area buyers last month closed on 9,195 single-family homes, up 6% from last August, the Houston Association of Realtors reported Wednesday. Sales of homes priced at more than $750,000 spiked 40% over last year and sales between $500,000 and $750,000 jumped 34%.
"Consumers can still benefit from record low interest rates. However, constrained inventory doesn't offer them many housing options," association Chairman John Nugent said in the report, which is based on sales handled through the Multiple Listing Service throughout primarily Harris, Fort Bend and Montgomery counties.
A 23% drop in listings combined with strong sales volume drove single-family inventory down to a 2.8-month supply in August, compared with 4.1 months a year earlier. Experts generally consider six months of inventory to be a balanced market where it's neither a buyer's nor seller's market.
The busy summer has more than made up for the double-digit declines in April and May when much of the area was shut down. Year-to-date sales are 2.8% ahead of last year's record pace.
The increase in high-end transactions boosted the overall median price of a single-family home in August to $269,000, up 7.6% from the same time last year.
Closed sales of homes priced between $250,000 and $500,000 — the market's highest volume range — were up 18% over last year. The market saw fewer closings for properties priced below $250,000 — likely a result of limited supply rather than lack of demand.