As we wave goodbye to a challenging 2023, the Houston housing landscape is showing signs of an encouraging turnaround. The past year may have marked a second year of downturn in home sales, yet there's a growing optimism for 2024, fostered by more reasonable prices and a broader range of housing options, as highlighted by the Houston Association of Realtors (HAR).
Reflecting on the year that's been, we saw a noticeable decrease in single-family home sales, which summed up to 83,854 – a 12% fall from the previous year. Overall property sales also saw a downward trend, dipping by 13.1% to 102,367, as per HAR's January 10 report. This also translated into a total dollar volume of $39.86 billion, a 12.6% decrease.
Interestingly, the pricing landscape remained somewhat stable. The median price for single-family homes in 2023 hovered around $330,000, only a slight 2.5% decrease compared to 2022, and the average price was $412,161, mirroring the previous year's figures.
A key factor influencing the 2023 market was the rise in mortgage rates, which acted as a significant barrier to homebuying. The year kicked off with a stark 29.9% drop in single-family home sales compared to the same period in 2022. This decline wasn't a sudden occurrence but rather a continuation of a nine-month downward trend. Yet, despite the escalating mortgage rates, reaching a peak unseen in two decades, Houston's housing market finally saw a positive shift by November – the first increase in 19 months.
December's figures painted a similar picture with a 6.2% decline in single-family home sales from the previous year. However, pricing remained relatively stable, with the average price slightly rising by 0.3% to $407,817, and the median price holding steady at $330,000.
An intriguing aspect was the performance across different pricing segments. While most categories witnessed sales dips, the $250,000 to $499,999 range remained stable, and the under $99,999 segment saw a remarkable 23.3% increase. The luxury market, homes over $1 million, experienced the smallest decline, only a 2.1% drop.
Currently, the Houston area boasts a 3.3-month supply of housing inventory, an increase from the 2.6 months recorded a year earlier. This figure is slightly lower than the national average of 3.5 months. A balanced market, according to HAR, is typically defined by a 4- to 6-month supply.
Looking forward, there's an air of positivity with a 14.5% increase in single-family pending sales and a 13.9% rise in total active listings.
Thomas Mouton, HAR Chair and a professional at Century 21 Exclusive, commented, “While it's disheartening to see a decline in home sales, it's important to recognize that this trend was not exclusive to Houston but rather a national phenomenon. We're optimistic about a resurgence in home sales, hinging on consumer confidence, which in turn depends on the Federal Reserve's interest rate decisions and the stabilization of inflation. The expanded housing inventory and moderated pricing in 2023 are setting the stage for a promising 2024.”
As we embark on 2024, it's clear that the Houston housing market is poised for a rebound. With more balanced pricing and an expanding inventory, the stage is set for a promising year ahead in the world of real estate.
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