More buyers closing on area homes

Weekly total up 16% from last year; fewer properties on market

Houston-area home sales registered another week of gains, as buyers continued to put homes under contract — in some cases after heated bidding wars — while fewer new listings hit the market, exacerbating the limited supply of properties for sale.

Seizing on some of the lowest mortgage rates in history, buyers closed on 2,138 homes during the week ending Aug. 17, up 15.9 percent from a year earlier, new weekly data from the Houston Association of Realtors show. New listings fell 11.4 percent from the year-ago period.

Homes in the $500,000 to $750,000 range have been one of the strongest segments of the market.

“If you’re a buyer in this price point, you’ve been frustrated as hell,” Bill Baldwin, owner of Boulevard Realty, said this week in a market update to agents and customers. “If you’re a seller, it’s a pretty good scenario because that’s really been one of the strongest portions of the market.”

Economic uncertainty causes home shoppers to tighten their budgets, so “instead of buying the million-dollar house, they’ll buy the $750,000 house,” Baldwin said.

Demand for new homes has been on the rise since sales plunged in the early months of the pandemic.

This month, Metrostudy, a

consulting company for the homebuilding industry, revised its forecast upward for 2020, estimating that builders would start as many as 31,500 new homes.

Development activity has already been pushing to the far outskirts of the Houston region, and COVID-19

could accelerate that trend.

With companies now considering letting some employees continue to work from home even after the pandemic, more urbanites may consider moving to the suburbs.

Builders and developers have been expressing interest in parts of Waller, Sealy, Montgomery and Needville, Bryan Glasshagel, senior vice president in advisory

services at Metrostudy, said in a presentation to builders this month.

“There’s a lot of activity already starting to sprout up in these locations, and on the advisory side, we’re seeing some of our assignments come in from there, so that’s kind of a leading indicator of where development will play out,” Glasshagel said.

Historically low mortgage rates — which recently

fell to below 3 percent — are helping fuel Houston’s housing boom. Monthly sales of single-family homes surpassed 10,000 for the first time in July, according to Multiple Listing Service data.

While supply continues to be limited in the below$250,000 market, the inventory of homes priced above $1 million remains high.

Baldwin said he expected

that to change as summer winds down and wealthy Houstonians who fled the city for cooler temperatures return and start shopping for homes.

“Wealthier people get out of the heat,” Baldwin said. “They go on vacations. You saw a pretty big exodus of families out of Houston someplace else, which caused some slowdown in that higher-end market.”