Home sales set record in 2016
Pent-up demand increased activity despite economy
Despite strong economic headwinds facing Houston in 2016, the housing market hit a new high as pent-up demand propelled home sales into record territory during the year even while oil prices shrunk.
Buyers purchased 76,449 single-family homes in 2016, a yearend report from the Houston Association of Realtors shows. The alltime-high volume was up 3 percent from 2015 and up 1.3 percent from the previous record in 2014, according to the association, which tracks the housing market across the greater Houston area.
While real estate has softened from the days of $100 oil, experts largely agree that the downturn is in the past.
“Houston and the surrounding areas have done a really great job at not being oil-dependent anymore,” association chairwoman Cindy Hamann said.
Activity picked up during the final months of the year, helping tip the scales toward making 2016 the strongest year ever.
Sales in the once-sluggish high-end segment of the market —
$500,000 and up — made a year-end turnaround, racking up double-digit increases in November and December.
In Spring Branch, the Bedinger family has yet to benefit from that rebound. They put their remodeled ranch-style house in a desirable neighborhood up for sale last summer and moved to Friendswood to be closer to relatives.
They realized they had probably missed the market peak, when nice houses like theirs wouldn’t last a week on the market, but they still felt confident in their three-bedroom house’s value. It’s zoned to some of the best schools in the area. The roof and air conditioner were new. They started out asking $670,000.
“We checked out some comps and it wasn’t superhot, but things were still moving so we put it on at the very end of July,” said Shannon Bedinger, who works in marketing and is married with two young children.
Yet the house remains empty. The couple is now on their second real estate agent and they’ve dropped their price. It now lists for $635,000.
Bedinger is hoping now in the new year, they’ll get some good offers.
“I kept hearing people don’t make decisions around election time,” she said. ‘So much demand’
The year ended on a high note with property sales in December up 5.3 percent, the association reported. Buyers closed on 6,628 single-family homes at a median price of $225,903.
“There’s still so much demand,” economist Jim Gaines said last week during a bullish forecast speech at an industry luncheon.
Gaines, who’s with the Real Estate Center at Texas A&M University, said the Houston economy is almost three years into the downturn that started with declining oil prices in 2014. Real Estate Center research shows it typically takes two to three years from the time the energy sector begins to decline for the negative effects to fully push their way through the economy.
Mortgage rates could ding the market if they go above 5 percent later this year, but Gaines predicts prices generally will rise.
The median price among the homes that sold in 2016 was up 4.5 percent to $221,500, the HAR report showed. Throughout the year, $24.5 billion in residential real estate was sold through the realty association’s Multiple Listing Service, up 4.2 percent from the year earlier.
“The demand is still there, and the supply isn’t,” Gaines said, “so the prices are going to get buoyed up.”
Inventory levels grew during the first half of 2016, peaking at a fourmonth supply in July, the association said.
That was concerning to some because it coincided with the high end of the market taking a hit amid layoffs in the energy industry.
“After our first quarter, we all were kind of worried. But it started picking up,” Hamann said. “After the election, people started seeing interest rates going up and started to get off the fence, which is good.” ‘I’m not worried’
As sales increased, inventory levels fell back and the year ended with just 3.3 months of supply.
Martha Gremillion Mazzei put her Oak Forest house on the market in November. She wants to move to Inwood Forest to be near her in-laws.
Mazzei said the house was appraised for $450,000, but she priced it at $395,000 because she recognizes activity is a little slower and she’s listing it herself.
She’s marketing it on Zillow and the Oak Forest Facebook page, and she’s hosted a couple of open houses.
The house is older, but it’s been remodeled and the attic has been converted into living space. It’s just a couple of blocks from the prized Oak Forest Elementary School.
She hopes to sell it this month or next — despite the market’s “hiccups.”
“From what I’m hearing, if I keep this house in the $400,000 range I’m not worried about it. I’m not trying to sell a milliondollar house,” she said. “I think a family with small children could absolutely afford this.”