As the heat increased in June, the Houston real estate market has begun to cool. This pattern is typical for this time of year. However, the decline is certainly a little more pronounced due to rising mortgage rates. The early triple-digit heat may also be helping to suppress buyer demand as well.
According to the latest report from the Houston Association of Realtors (HAR), 9,728 single-family homes sold in June compared to 10,649 a year earlier for an 8 percent decline. That decline in sales activity did not extend to all markets. The $500,000 to $1 million housing segment drew the highest sales numbers of the month, registering a 22.0 percent year-over-year sales volume gain. That was followed by homes priced from $250,000 to $500,000, which rose 2.4 percent. Homes priced over $1 million and homes below $250,000 saw the sharpest decline.
Despite falling sales numbers, home prices continued to rise year-over-year. The average price of a single-family home rose to $436,425 in June. That’s an 11 percent increase compared to the same period last year. However, those prices are slightly off the record highs we saw the previous month. The median price jumped 13.2 percent to $355,000, which is the highest median price of all time.
According to HAR, total active listings, or the total number of available properties, increased 27.4 percent to 29,344. June sales of all property types totaled 11,921, down 9.1% compared to June of last year. As a result, the absorption rate for June 2021 was 41%. That’s still really strong historically, even if it isn’t as dramatic a number as we have seen over the past year.
Homes continue to sell pretty quickly. Despite the slowdown last month, the Days on Market (DOM), or the number of days it took the average home to sell, fell to 28 days in June. This number has been falling most of the year.
Inventory levels are on the rise, which is providing a few more options for home buyers. Inventory ticked up slightly to 2-months compared to 1.6 in May. Housing inventory nationally stands at a 2.6-months supply, according to the latest report from the National Association of Realtors (NAR). A 6.0-months supply is generally considered a “balanced market,” in which neither the buyer nor the seller has an advantage. So we do have a little ways to go before the market gets more into balance.
As we enter the hot summer months, we should expect a further slowdown in market activity. July and August are typically slower than the Spring Months. After labor day, we will probably see a little bit of a bounce back if the market follows historic patterns. That means buyers may find some additional opportunities to negotiate and shop for homes over the next couple of months. Over the long term, we expect home prices to hold relatively close to current levels if inventory levels remain at current levels.
Whether the market is booming or slow, be prepared. Make sure you have the information you need to make an informed decision on when to start house hunting or listing your home. Contacting a Norhill Realtor is a good place to start. Get connected with one of our experienced agents who can talk you through the market in the neighborhoods you care about as well as discuss the timing for either selling or buying.