By Richard Miranda, 2021 Chairman of the Houston Association of REALTORS®
The Houston housing market is about to set new sales records as the books close on 2021. If you had asked me a year ago if that was even remotely possible, I might have called you delusional. No one imagined 2020 being a record year in the midst of a pandemic, and yet it was. As the Delta variant reared its ugly head in 2021, expectations grew bleak for the housing market and the economy as a whole, with serious supply chain interruptions and labor strains. And yet demand for housing across the greater Houston area persisted on both the rental and ownership sides. That, despite the most constrained supply of homes in history.
We have observed some noteworthy events in Houston housing in 2021. In June, single-family home prices reached record highs. The average price climbed to $393,314 while the median price jumped to $314,000. That same month, total sales volume reached 13,097 units, beating the previous record of 12,865 achieved in July of 2020. In addition, the June ‘Close to Original List Price Ratio’ for single-family homes was the highest ever — 100.3% — with a majority of buyers paying above list price for homes on the market. In July, it was 100.2%. Never before has our region experienced this kind of intense high-dollar buying. But with mortgage rates holding at historic lows, home buyers were determined to outbid others to get into the homes of their dreams.
Based on input from many of the Houston Association of REALTORS®’ (HAR’s) 47,000 members, our Multiple Listing Service (MLS) recently redefined Houston’s luxury housing market as consisting of homes priced from $1 million and above. It had previously consisted of homes priced at $750,000 and up. The consensus was that this revised pricing breakout was a more accurate reflection of the local housing segments.
As I have stated before, the Houston real estate market is in uncharted territory and has been since the coronavirus pandemic began. In the early going, most of us feared the worst. As the full scope of the health crisis became apparent, HAR leadership reached out to elected officials across the region to ensure that real estate was designated an essential service. That was a critical step toward allowing Realtors to serve consumers in desperate need of housing.
The HAR Technology team — the group behind the popular HAR.com website and app — also worked quickly and diligently to roll out virtual open houses and virtual showings, which were vital during stay-at-home orders and after they were lifted when many consumers were concerned about not being able to safely attend in-person open houses and showings.
The innovations, however, did not stop there. This November, HAR introduced a new service called ShowingSmart, an enhanced tool to streamline scheduling and management of property showings whether agents are in the office, on the road or at home. ShowingSmart is designed to improve business workflow for both listing agents and buyers’ agents to manage showings on listings, schedule appointments, gather feedback and present showing information to clients.
As with other tools and services that HAR has taken to market over the years, we expect other Realtor associations and MLSs around the country to emulate us with enhanced services to their own members and clients. I am incredibly proud of these achievements and all the work that HAR does throughout any given year to promote the real estate industry and develop new innovations for consumers and real estate professionals alike.
Without the benefit of a crystal ball, it is hard to predict where housing is headed in 2022. We still need more homes to enter the market because, without inventory, there can and will be no sales. Housing inventory has been improving as 2021 draws to a close, but it will take a major influx of property listings to get us where we should be if we want to restore a more balanced market. We are currently at a 1.8-months supply of homes. Once upon a time, a 6.0-months supply was considered balanced. Most of my colleagues and I would be elated if we could work our way back up to a 3.0-months supply.
We also need to make sure the homes that are on the market are affordable to all consumers — whether they are buying their first home or their fifth. That has been especially challenging in the home construction arena, which saw prices spike as a result of supply and labor shortages that appear to finally be abating.
I believe that if Houstonians can withstand the rigors of a global pandemic, we can probably survive anything! That has everything to do with the dedication and commitment of all of us that make our living in real estate to promote homeownership and home leasing along with our love for the greater Houston area that we call home. I fundamentally have a positive feeling about what lies ahead for us in 2022.