Despite facing its 19th consecutive month of year-over-year declines in home sales, Houston's housing market exhibited resilience in October 2023, marking the smallest dip of the year. The Houston Association of Realtors reported that single-family home sales, totaling 6,377, experienced a modest 3.4% decrease from the previous October, surpassing the year's earlier record drop in August.
The market witnessed varying trends in different pricing segments. Homes priced between $150,000 and $999,999 saw declines ranging from 4.3% to 8.5%, while the luxury segment, homes priced at or above $1 million, recorded a remarkable 21.3% surge in sales. Interestingly, the lower-priced segments below $150,000 also saw sales increase between 3.1% and 12.7%, showcasing a diverse market response.
Despite the dip in sales, the prices of single-family homes remained relatively stable. The average price edged up by a marginal 0.4% to $403,556, while the median price dipped by 0.9% to $327,000. Compared to pre-pandemic levels in October 2019, these figures still reflect a significant increase of 35.3% and 36.3%, respectively.
Housing Inventory and Future Outlook
The decline in sales contributed to an increase in inventory, reaching a 3.6-month supply, a level last observed in November 2019. Nationally, the inventory stands at a 3.4-month supply, indicating a balanced market. Looking ahead, single-family pending sales showed promise with an 11% increase, and total active listings rose by 12.5% compared to the previous year.
Townhouse and Condominium Market
The townhouse and condominium market mirrored the trends of single-family homes. Experiencing its 17th straight month of decreases, sales fell by 16.4%. The inventory reached a 3.7-month supply, the highest since November 2020. Average prices inched up by 1.2% to $272,597, and the median price increased by 6.6% to $239,900.
Rental Market and Economic Factors
Despite the slowdown in home sales, the rental market for single-family homes and townhomes/condominiums remained robust. Analysts suggest that the highest mortgage rates in two decades might be a key factor influencing consumers to delay home purchases.
According to HAR Chair Cathy Treviño with LPT Realty, “The Houston real estate market had an encore performance of slower home sales and solid rental activity in October, and we can probably expect those trends to prevail for the rest of the year.
While the housing market in Houston faced challenges with declining sales, the minor dip in October 2023 and the positive indicators in pending sales and active listings hint at a potential turnaround. As the market navigates economic factors like mortgage rates, the coming months will be crucial in determining the trajectory of Houston's real estate landscape.