Home sales strong overall, but high end drags
Closings come in at their second-highest level ever for the Houston area
Area home sales rose to a near-record in May as buyers drove the median price of single-family dwellings to the highest level ever in the metropolitan area, the Houston Association of Realtors reported Wednesday.
Closed sales climbed 1 percent from a year earlier to 8,157, the second most homes sold in a single month in the Houston area. The market segment between $500,000 and $750,000 was particularly strong as sales rose for the fourth consecutive month, jumping more than 10 percent from May 2017 and helping to push the median price to more than $305,000.
Sales of luxury homes, those priced above $750,000, continued to disappoint. Closings were flat for the third consecutive month, which real estate agents attributed to sluggish hiring in the high-paying energy-sector, which drives the local economy.
While oil prices have risen — they hit $70 a barrel in May for the first
time since 2014 before retreating recently — area energy companies have yet to start hiring in earnest, real estate analysts said. Amy Bernstein, founder of Houston firm Bernstein Realty, said that during the oil boom that ended in 2014, her real estate firm handled five to seven corporate relocations in the oil and gas sector in a typical week.
Today, that number is down to two or three per week, she said.
“The slow luxury market is concerning since all the economic indicators are so strong right now,” Bernstein said. “We’re hopeful that the hiring follows the rebound.”
Several other factors could be contributing to the slowdown in luxury home sales, including the recent federal tax overhaul that capped local property tax reductions at $10,000 and potentially led buyers to seek lower-priced homes with lower taxes, real estate specialists said. At the same time, Bernstein said, empty nesters are downsizing, selling large suburban homes to move into townhouses and condominiums closer to the city.
Single-family home inventory is at a four-month supply, down slightly from a year ago. U.S. housing inventory also stands at a four-month a supply.
The average Houston home took 52 days to sell, according to the Houston Association of Realtors. That’s up from 51 days in May 2017.
A growing housing inventory and slower sales bodes well for buyers, but for the time being, said Kenya Burrell-VanWormer, HAR chairwoman. “Houston remains a seller’s market.” email@example.com twitter.com/paultakahashi
“The slow luxury market is concerning since all the economic indicators are so strong right now.” Amy Bernstein, Bernstein Realty
This house on Groveland Lane in River Oaks is for sale for just under $13 million. While total sales of single-family homes were strong, closings for houses priced above $750,000 were flat for the third straight month.
Single-family home inventory is off slightly from last year.