Houston’s real estate market tightened in September, with home sales slowing for the 18th consecutive month. The rise in interest rates has prompted potential homebuyers to either opt for the rental market or delay their home-purchasing plans. Despite this, an increase in inventory and a moderation in prices are creating a more buyer-friendly environment, and taking us back to a more balanced, pre-pandemic level.
Norhill’s Key Insights from the Houston Association of Realtors (HAR) September 2023 Market Update:
Single-Family Home Sales: Sales fell by 10.9% year-over-year, with 6,886 units sold in October 2023, down from 7,728 in the same month the previous year. This decline is attributed to the continued rise in interest rates, leading to increased caution among potential buyers.
Townhouse/Condominium Sales and Pricing: This segment experienced a 14.4% decline year-over-year in October.
Home Pricing: The average price for single-family homes saw a marginal increase of 0.8% to $416,664, while the median price experienced a 2.2% decline to $333,000. These figures indicate a moderation in prices, offering potential opportunities for buyers. The average price remained relatively stable, and the median price increased by 2.2% to $224,250.
Inventory Levels: The months supply of homes increased to 3.5, the highest since November 2019. This rise in inventory is a result of the slowed sales volume, offering more options for prospective buyers. Housing inventory nationally is at a 3.3-months supply, according to the latest report from the National Association of Realtors (NAR). A 4.0- to 6.0-months supply is generally regarded as representing a “balanced market” in which neither buyer nor seller has an advantage.
Likely to Sell: According to HAR, total active listings, or the total number of available properties, increased 13.7 percent to 39,632. September sales of all property types totaled 8,550 down 9.5 percent compared to September 2022. As a result, the absorption rate, which is a measure of any given home’s likelihood to sell, for September 2023 was 22 percent. This brings us in line with pre-pandemic absorption levels.
Days on Market: Homes have been taking about 42 to 45 days on average to sell over the past 4 to 5 months. For September, Days on Market was 42 days, which is slightly up from last month.
Despite mortgage rates moving higher in recent weeks, the Houston real estate market remains resilient. Home prices are relatively flat over the past 12 months. The market has slowed but homes are selling and they are still selling relatively quickly. This trend should continue as long as the local Houston remains robust.
Connecting with a local realtor can provide valuable insights tailored to your needs and contacting one of Norhill’s amazing Realtors is a good place to start. They can guide you through the market trends in your desired neighborhoods and advise on the best times to buy or sell. Fill out the form to get started.
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