Local real estate market hits all-time high

Record number of buyers close on homes — and at higher prices — than ever before

Houston’s real estate market had a banner June as buyers closed on more homes than any other month in history and at sales prices never before reached.

From low-end to luxury, houses are selling throughout the area, even as last year’s hurricane remains on the minds of many Houstonians with Harvey’s one-year anniversary approaching. Still, buyers are cautious: If they find out a house flooded, they’ll walk away. And if they find something in the right neighborhood but the house has issues, they’ll keep looking.

“Buyers seem to be a little more confident that something else will come along,” said Mike Mahlstedt, an agent who specializes in close-in neighborhoods.

Single-family closings last month totaled 8,518, up 1.8 per- cent over the previous June, which was the last time sales volume reached a record high, according to a monthly report from the Houston Association of Realtors released Wednesday.

Jean Froyd had been house shopping in the Conroe Independent School District this spring when she and her husband toured a four-bedroom home that had a contract recently fall through. The owner had dropped the price by around $15,000, so they made an offer.

“That’s kind of what cued us into it,” Froyd said. “We got a

really good interest rate, too.”

The couple closed at the end of last month and are having new floors installed before they and their two children, 7 and 9, move in.

While the spring and summer months are typically when the real estate market ramps up, the realty association’s chair, Kenya Burrell-Van-Wormer, said there are likely other factors in play that accounted for June’s outsize performance.

One is the threat of rising interest rates.

Though they’ve fallen in recent weeks, the mortgage rate increased throughout most of the spring.

The average 30-year fixed rate mortgage is 4.52 percent, according to the most recent survey from Freddie Mac. That’s up from 3.96 percent a year earlier.

Beth Lovell, who works with a team of real estate agents at RE/MAX Legends in Spring, said higher mortgage rates will, indeed, be a deciding factor for some buyers.

And while encouraged by the June numbers, Lovell said the summer frenzy has slowed.

Houses are staying on the market longer as there’s more competition. Sellers are holding out for stronger offers.

Lovell is helping a neighbor sell a home in the Klein area, and on Tuesday they cut the asking price for the second time.

We started at $218,000 and are now at $209,000,” she said.

Homes that flooded during Harvey are lingering on the market. And those that do sell are greatly discounted.

When there’s a new listing in an area that flooded, Lovell said, the first thing a buyer asks is whether the house took on water.

“When you tell them yes, you don’t hear from them again,” she said. “Buyers are scared.”

The June sales data showed declines in lowerpriced homes because there’s so few of them relative to demand.

Homes priced under $200,000 are selling at a fast clip and often after getting multiple offers.

“If it’s a good house — sometimes if it’s not — it’s gone,” Lovell said. “There’s just not much left in that price range.”

Overall, the Houston market mirrors the nation with a 4.1-month supply of homes for sale. A sixmonth supply has long been the target for a balanced market where neither buyer nor seller has the upper hand, though it’s been several years since that amount was attained.

The median price of all the homes that sold in June was up 2.6 percent to $245,000 — also a Houston-area high, according to the realty association, which tracks sales handled through the Multiple Listing Service throughout primarily Harris, Fort Bend and Montgomery counties.

The increase reflects a June boost in high-end sales.

Affluent buyers seem to have put aside concerns over new tax laws, oil prices and politics, Mahlsteadt said.

“Entry points in the desirable neighborhoods continue to be incredibly strong,” he said. “In River Oaks, for example, $1.5 million to $2.5 million is really healthy. In West U, from $900,000 to under $2 million is very strong, and days on market can sometimes be just a couple of days.”