The housing market in Houston strengthened further and posted higher sales and prices during the month of March fueled by an ever shrinking inventory of properties. As usual, I want to give you the “espresso” version of the report with the numbers you need to know:
- Total sales came in at 7006 properties (19% increase over March 2012)
- Active listings on the market were 32,704 (down 22%)
- Pending sales were 4433 (up 6%)
- Average price was 236,195 (up 4%)
- Median price was 172,000 (up 6%)
- Inventory shrank to 3.5 months (down 38% over last year, and down from February’s 3.6 months, too)
I also want to share with you a couple of interesting statistics.
When the sales numbers are broken into price brackets, the only bracket that experienced decline in sales were properties under $80,000. Every other price bracket experienced double digit increases. Why is that? Well, it’s NOT because homes in that price range aren’t selling as well. It’s because homes in that price bracket are becoming fewer and fewer as the market as a whole rises.
Furthermore, when you think about homes under $80k, what’s the first thing that comes to mind? Foreclosures, right. Not all properties in that price range are foreclosures but most of them are. And there’s the second statistic I wanted to share with you. Bank owned foreclosures as a percentage of sales are declining substantially. During March, foreclosures accounted for just 12% of total sales – that’s down from the 15-19% levels we’ve seen this year and the 25% that’s been the norm during the period after the 2008 recession. And even the properties that banks are bringing to market usually come with higher price tags as banks seek to take advantage of the increased demand.
The biggest story these numbers tell continues to be inventory. At 3.5 months this is the lowest inventory level since 1999 and 34% lower than the national average of 4.7 months. The big question remains: What’s going to happen in the coming months? Can the Houston housing market continue to gallop at these levels and keep the inventory at current levels or will it level off and allow supply to catch up with demand? In the short term, I suspect that I will be writing similar articles about the market through the summer. Then I think the market will take a breather and slow down to a more sustainable pace. It certainly feels like demand is realizing that the train of low interest rates is leaving the station soon and no one wants to be left walking.