Are house prices dropping in Houston?
Easing prices and expanded inventory pave the way for a promising spring homebuying season
HOUSTON — (March 8, 2023) — The Houston housing market is off to a rough start in 2023, with home sales continuing a sharp decline that began a few months into last year.
The Houston Association of Realtors reports home sales in January were down almost 30% compared to the same month in 2022. It is the tenth straight month of sales declines as the market fights to regain some of the momentum it had during the pandemic.
High mortgage rates, inflation and fears of a recession this year have kept many potential homebuyers waiting for better market conditions. Mortgage rates have come down over the past several months, but are still over 6%, double what they were just two years ago.
"I think the consumers just don't really know where it's going to land, if it's a good time to buy or a bad time to buy," HAR Chair-elect Thomas Mouton said.
There were familiar themes with the latest housing numbers. HAR said all segments of the local housing market suffered. Sales of homes priced between $150,000 and $249, 999 dropped 35%. Homes priced between $250,000 and $499,999 were down nearly 30%.
During the recent sales decline, home prices in Houston have remained steady. The median price of a home last month increased 1.6% compared to last January, to $315,000. The average price now stands at nearly $382,000, also a slight increase.
If homebuyers are waiting for home prices to come down drastically, Mouton said it is probably not going to happen.
"If they're going to wait around for the bottom to fall out, I don't foresee that happening," Mouton said. "You'll probably have some one-offs, but for the most part, I don't think they're going to see the dramatic price drop that they assume they will."
HAR said there are signs things could be getting better. When compared to January of 2020 right before the start of the pandemic, home sales last month were only down 4.6 percent. Sales during the pandemic rocketed to record levels in Houston and across the nation as homebuyers took advantage of record-low mortgage rates.
Home inventory, a key part of the sales equation, rose again in January to 2.7 months of available housing. Industry experts say a four to six month of supply means there is a balanced market. Tighter inventory usually means faster homes sales, but also higher prices.
The sales slowdown means home sellers are waiting longer to unload their properties. HAR said the amount of time it took to sell a home last month increased from 39 to 59 days.
Source-Houston Public Media