Post-lockdown pent-up demand fueled a surge of home sales in Houston during the month of July.
It was the second straight month of gains, surpassing June’s stronger-than-expected performance. According the to latest Houston Association of Realtors Market Update, July single-family home sales were up 23% year over year. A total of 10,975 homes were sold, setting a record for a single month.
Homes priced between $500,000 and $750,000 were the sweet spot for buyers, as sales rocketed 51.9% above July 2019 levels. The second-best performer was the luxury market – consisting of homes priced at $750,000 and above – which jumped 41.7% year over year. Sales of homes between $500,000 and $499,000 increased 37.1% from July 2019 while sales of homes priced between $150,000 and $249,999 rose 13.4% year over year.
Meanwhile, sales of homes in lower price categories saw sales fall up to 29.3% in July, a reflection of how the economic downturn has disproportionately affected lower-income Americans.
But combined strength in the high-end and mid-range markets pulled average and median pricing up to historic levels, according to HAR. Median single-family home prices rose 8.7% to $271,830 while the average price climbed 8.5% to $338,350.
Sales of all property types were up 25% year over year in July — another record high — and total dollar volume for the month rose 33.8% to $4.1 billion.
While year-to-date sales are currently 2.7% ahead of 2019’s record pace, industry experts say a dwindling supply of homes — exasperated even further by the recent burst of homebuying — will make it challenging to meet buyer demand moving forward.
The total number of available properties in Houston fell 19.4% in July, while single-family home inventory shrunk to a 3-month supply, down from a 4.2-month supply in June.
“We are grateful for two consecutive months of strong activity across greater Houston, however we do not consider the current pace of home sales sustainable given the shrinking supply of homes and expect business to taper a bit this fall,” said HAR Chairman John Nugent in a press release. “Historically low interest rates make this an outstanding time to buy a home, but without the inventory, there unfortunately isn’t much out there for consumers.”