Bidding wars rule local housingmarket
Houston boom puts buyers in a bind as dwindling supply drives higher sale prices
The supply of homes for sale in Houston has fallen toits lowest level in nearly six years, putting sellers in the catbird seat and creating a frustrating market for buyers.
“We’re seeing multiple offers on most homes that pop up, and there are just massive bidding wars going on,” said Jessie Githens, an agent with CB&A Realtors who sells primarily in the north Houston area.
Year-over-year, Houston-area home sales were up in September for the fourth straight month as the summer selling season has pushed into the fall. Part of the growth is the market making up for the months when real estate transactions were stymied due to the pandemic.
Buyers closed on 9,101 singlefamily homes last month, a 29 percent increase over the same period in 2019, the Houston Association of Realtors said in amonth report released Wednesday. That robust sales activity, combined with a dwindling supply of listings, drove single-family home inventory down to 2.5 months of supply, compared with 3.9 months a year ago and 2.8 months in August. A
six-month supply is considered a balanced housing market.
Adrien Parker, a resident of Benders Landing in Spring, a community with large homes on lots of an acre or more, wants to build a newhome there but lots there seem to sell immediately — and often for above asking price.
“I can’t find a piece of property,” Parker said. “Nothing stays on the market. They’re selling for $20,000 over appraised value.”
The supply of homes priced less than $300,000 is especially tight with inventory sliding to less than 1.8 months statewide, according to the Real Estate Center at Texas A&M University.
COVID-19 has accelerated a trend to build more homes beyond city borders where land is more affordable.
Houston developers have projects under way across the region’s outskirts. Thisweek, a Johnson Development Corp. affiliate filed plans with the city for the development of a 1,622acre master-planned community in northwest Harris County.
The property is in the city’s extraterritorial jurisdiction, outside the Grand Parkway south of U.S. 290 and west of Katy-Hockley Road. The project will be one of the region’s farthest
flung communities, beyond such neighborhoods as Fairfield, Bridgeland and Cypress Creek Lakes in the northwest corridor.
Ultra-low interest rates are bolstering the pandemic-fueled boom. Houstonians are buying their first houses or moving up into larger homes in part because low mortgage rates are allowing them to buy more expensive properties while keeping their monthly payments stable. The average 30-year fixed-rate mortgage rate was 2.87 percent lastweek, according to Freddie Mac’s latest survey.
The mid- and high-end price ranges saw the strongest activity. The number of sales of homes priced at least $750,000 jumped 81.5 percent compared to a year ago. Sales in the $500,000 to $750,000 range were up 58.1 percent. The largest segment of the market — homes priced between $250,000 and $499,999 — registered a 46.7 percent increase.
Stronger volume at the high end pushed the median home price to a September record of $265,000, an 8.3 percent year-over-year increase.
An index measuring repeat single-family home sales, which tracks the change in price of the same piece of property over time and is deemed a better measure of changes in values, showsHouston’s annual home price appreciation was 4.1 percent in August, according to the Real Estate Center. For Texas, home price appreciation was 5.4 percent.
“September sales defied expectations, with many Realtors busier than ever, however we anticipate that the pace of sales will soon slow down since there just aren’t a whole lot of homes out there for consumers to buy,” HAR Chairman John Nugent said in a press release.
The booming market is even attracting more people to the business, the association said.
“Our HAR membership now exceeds 41,000, so a lot of folks are energized about our flourishing industry,” Nugent said. In March, the association counted 40,000 members.