The Houston market has stabilized at a more sustainable (slower) level of sales then in recent years and is holding up much better than expected due to lower but stable oil prices. Month’s inventory for sale stands at 3.6 months compared to 3.2 months at year end and 2.9 months this time last year. 3.6 months still compares favorably to 4.6 months nationally. The total number of sales was down 2.0% from April, 2015, and the dollar volume down 1.6%. Pending sales closings are up 2.3%, suggesting that the current equilibrium will continue as the year unfolds. The supply of homes for sale is up 16.7% from a year ago, with 34,402 active listings compared to 29,486 a year ago.
Sales declined at the lower price segments due to a lack of entry level inventory. Houses priced at $150K or less receive multiple offers in excess of likely appraisal values as both first time and investor buyers try to acquire starter homes. Sales in the $150K to 250K value range increased by 7.8% from a year ago, while sales in the 250KL to 500K price range increased by 2.1%. The number of 500K + property sales declined 15.7%. My personal feeling is that the market above 250K has slowed considerably and that demand varies significantly by area of town. Houston has less inbound job relocation and a fear of job loss amongst current owners looking to move up has decimated the higher end market. We are also expected to lose a net 30,000 jobs this year after several years of remarkable job growth. Increased inventory however seems to be bringing more buyers into the market for increased selection and bargaining power. The April median price reached $217,000, up 3.3% from the $210,000 median price a year ago.
Sales of townhomes and condos tumbled 12.6% from a year ago. Lease demand remains very strong. The number of rentals going through the MLS was up 18.1% compared to a year ago, and the average rent increased 2.6% t $1811 per month. The last quarter of 2015 saw stable to declining rents, which seems now to have stabilized with sales.