The Houston housing market defies pandemic to set new records in 2020

Not even a devastating global pandemic could stop the greater Houston real estate market from shattering records as it crossed the finish line for the 2020 calendar year. Singlefamily home sales surpassed 2019’s record volume by more than 10 percent, even as the supply of homes withered to the lowest levels of all time.

Stay-at-home orders resulting from the COVID-19 outbreak interrupted local real estate activity during March and April. However, the designation of real estate as an “essential service” shortly thereafter enabled Realtors to resume working with would-be home buyers looking to take advantage of historically low mortgage interest rates. Realtors also assisted consumers seeking rental properties. Even as stay-at-home orders were eventually lifted, virtual technology developed by the Houston Association of Realtors (HAR) made it possible for consumers to attend open houses and property showings remotely, without putting their health at risk.

According to HAR’s 2020 annual market report, singlefamily home sales rose 10.5 percent to 96,151. Sales of all property types for the year totaled 115,523. That represents an 11.6-percent increase over 2019’s record volume and marks only the second time in history that total property sales broke the 100,000 level. Total dollar volume for 2020 shot up 18.1 percent to a record-breaking $35.3 billion.

“When the coronavirus pandemic struck, we expected the real estate business to hit a brick wall and never fathomed the possibility of 2020 becoming a record year for the Houston market,” said HAR Chairman Richard Miranda with Keller Williams Platinum. “As we enter 2021, we find ourselves in critical need of inventory if we are to sustain a healthy pace of home sales.”

Single-family home sales for December jumped 25.5 percent compared to December 2019. The strongest sales activity took place among homes priced between $500,000 and $750,000, which rocketed 80.8 percent. The luxury market, consisting of homes priced at $750,000 and up, came in second place, climbing 54.0 percent. That was followed by homes in the $250,000 to $500,000 range, which rose 44.6 percent.

Prices of single-family homes established new December highs. The median price — the figure at which half of the homes sold for more and half sold for less — rose 8.7 percent to $273,443 while the average price rose 11.4 percent to $347,164.

2020 annual market comparison

New real estate records were set throughout the year, with July going down as the Houston area’s greatest one-month sales volume of all time — 10,815 single-family units sold. A record high average price of $347,164 and record high median price of $273,443 were achieved in December.

By the time the books were closed on December transactions, a record 96,151 single-family homes had sold across greater Houston in 2020. That represents an increase of 10.5 percent from the previous record of 86,996 in 2019.

On a year-to-date basis, the average price rose 5.9 percent to $324,069 while the median price increased 6.1 percent to $260,000. Total dollar volume for full-year 2020 jumped 18.1 percent to a record-setting $35.3 billion.

December monthly market comparison

The Houston housing market generated positive readings across the board in December with the exception of active listings and inventory. Single-family home sales, total property sales, total dollar volume and pricing were all up compared to December 2019. Month-end pending sales for single-family homes totaled 7,469, an increase of 40.5 percent versus one year earlier. Total active listings, or the total number of available properties, fell 28.6 percent from a year earlier to 26,821.

Single-family homes inventory narrowed dramatically from a 3.2-months supply to 1.9 months. For perspective, housing inventory across the U.S. currently stands at a 2.3-months supply, according to the latest NAR report.

Single-family homes update

Single-family home sales totaled 9,652, a 25.5 percent increase from December 2019. That marked the seventh consecutive month that sales were on the rise. The median price rose 8.7 percent to an all-time high of $273,443. The average price increased 11.4 percent to $347,164 — another recordsetting figure. Days on Market (DOM), or the number of days it took the average home to sell, dropped from 63 to 46. HAR also breaks out the sales figures for existing single-family homes. Existing home sales totaled 7,647 in December.

That is up 31.6 percent versus the same month last year. The average sales price rose 14.2 percent to $340,400 while the median sales price increased 12.8 percent to $265,000.

Townhouse/condo update

Townhome and condominium sales staged a strong finish to a year that, as with all other housing types, experienced sharp declines in April and May as a result of the COVID-19 pandemic. December volume rose 10.9 percent with 659 units sold versus 594 a year earlier.