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Houston home sales fell below pre-pandemic levels in October. Prices continued to drift downward, registering year-over-year declines for the ninth consecutive month. Despite high interest rates, more owners listed their homes for sale, nudging inventories to the highest level in four years.
Realtors sold 71,647 single-family homes through October of this year, 11,285 fewer closings than the comparable period in ’22, and 1,301 fewer than the comparable period in ’19. October’s closings put Houston on track to sell fewer than 84,000 homes in ’23, which would be the weakest year for home sales since ’18.
Conventional wisdom holds that high interest rates are keeping existing owners from placing their homes on the market, thus limiting inventory. That doesn’t seem to be the case in Houston. New listings continue to climb. Overall inventory (single-family, townhomes, condos, high rises) topped 40,000 units in October, the highest level in nearly four years.
The rise in listings and slump in sales has reversed the rapid price escalation of recent years. The rate at which prices rose began to decline in May ’22, then turned negative in February of this year. Every month since, the median price has been lower than the comparable month the prior year. The median price for a single-family home sold in Houston in October ’23 was $327,000, down 0.9 percent from $330,000 in October ’22.
Pending sales are an indicator of expected closings over the next 30 to 45 days. They tend to rise in late spring and early summer and taper off in the fall. While up from last year, they are down compared to ’19, ’20, and ’21. This October’s pending sales reinforce the notion that closings will be weak through the end of the year.
Inventory expanded to a 3.6-month supply, matching a level not seen since November ’19. Nationally, inventory is at a 3.4-month supply. A 4.0- to 6.0-month supply is generally considered a “balanced market” in which neither buyer nor seller has an advantage.
Prepared by Greater Houston Partnership Research
Patrick Jankowski, CERP
Senior Vice President, Research
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