HOUSTON — (June 9, 2021) — Houston area home sales set new records in May as consumers took advantage of historically low interest rates in snapping up an ever-dwindling supply of properties for sale. What resulted was a nearly 50 percent jump in sales volume compared to the same month last year, when real estate was still in the process of recovering from coronavirus-related lockdown orders. Limited supply, strong buyer demand and increased construction costs all contributed to record high home prices.
According to the latest Houston Association of Realtors (HAR) Market Update, single-family homes sales surged 48.2 percent compared to last May, with 9,702 units sold versus 6,546 a year earlier. That marks the greatest one-month year-over-year sales volume increase of all time and is the market’s twelfth consecutive positive month of sales. On a year-to-date basis, home sales are leading 2020’s record pace by 29.5 percent.
Homes priced from $750,000 and above led the way in May sales volume, shattering all previous measurements with a whopping 291.0 percent year-over-year increase. That was followed by the $500,000 to $750,000 segment, which rocketed 166.0 percent. This unprecedented surge in high-dollar homebuying is responsible for pushing pricing to record-setting levels. The single-family home average price rose 29.7 percent to $387,105 and the median price increased 21.7 percent to $304,000.
Sales of all property types totaled 12,100 – the second highest volume of all time. That is up 55.5 percent from May 2020. Total dollar volume for the month soared 100.5 percent to $4.4 billion.
“We are witnessing the most energized Houston real estate market in history,” said HAR Chairman Richard Miranda with Keller Williams Platinum. “Sellers maintain the upper hand, and buyers are not just meeting their demands. They are exceeding them, as we hear endless accounts of offers coming in that are thousands of dollars above list price. It’s difficult to predict how and when this incredible housing run will end.”
Lease Property Update
Consumer demand for lease properties waned in May while rent figures rose. Single-family lease homes fell 26.8 percent year-over-year and leases of townhomes and condominiums declined 3.5 percent. The average rent for single-family homes jumped 10.6 percent to a record $2,025 while the average rent for townhomes and condominiums increased 8.5 percent to $1,716.
May Monthly Market Comparison
As frenzied buying continued to dominate high end housing, and inventory held to its lowest level of all time, the Houston real estate market scored its twelfth consecutive month of positive sales in May.
May sales trends were largely positive. Single-family home sales, total property sales and total dollar volume all rose when compared to May of 2020. Pending sales climbed 12.4 percent. However, total active listings – or the total number of available properties – fell 40.6 percent with sales still dramatically outpacing new listings, which increased just 1.3 percent year-over-year.
Single-family homes inventory was squeezed to a 1.4-months supply in May from 3.3 months a year earlier. Inventory has now held at 1.4-months for three straight months. Housing inventory nationally stands at a 2.4-months supply, according to the National Association of Realtors (NAR).
Single-Family Homes Update
Single-family home sales leapt 48.2 percent in May with 9,702 units sold across the greater Houston area compared to 6,546 a year earlier. Heavy sales volume among homes at the high end of the market propelled pricing to levels that broke last month’s record-setting highs. The single-family home average price climbed 29.7 percent to $387,105 while the median price rose 21.7 percent to $304,000.
The time it took to sell a home fell by more than three weeks versus May 2020. Days on Market (DOM) went from 58 to 34. Due to strong buyer demand and surging home sales, inventory registered a record low 1.4-months supply compared to 3.3 months a year earlier. That figure is unchanged from March 2021 and is below the current national inventory level of 2.4 months recently reported by NAR.
Broken out by housing segment, May sales performed as follows:
$1 - $99,999: decreased 34.7 percent
$100,000 - $149,999: decreased 31.5 percent
$150,000 - $249,999: decreased 6.5 percent
$250,000 - $499,999: increased 82.8 percent
$500,000 - $749,999: increased 166.0 percent
$750,000 and above: increased 291.0 percent
HAR also breaks out sales figures for existing single-family homes. Existing home sales totaled 7,975 in May, up 60.6 percent compared to the same month last year. The average sales price shot up 35.6 percent to $390,230 while the median sales price climbed 29.3 percent to $303,775 – both record prices.
For HAR’s Monthly Activity Snapshot (MAS) of the May 2021 trends, please click HERE to access a downloadable PDF file.
Sales of townhouses and condominiums increased for the ninth straight month in May, rocketing 103.4 percent with 840 closed sales versus 413 a year earlier. The average price rose 15.7 percent to $238,839 – the second highest average price of all time -- and the median price climbed 21.7 percent to a record-setting $213,000. Inventory fell from a 4.4-months supply to 2.6 months.
Houston Real Estate Highlights in May
Single-family home sales increased for the twelfth consecutive month, up a dramatic 48.2 percent year-over-year with 9,702 units sold;
The Days on Market (DOM) figure for single-family homes dropped from 58 to 34;
Total property sales rose 55.5 percent with 12,100 units sold – the second highest volume in history;
Total dollar volume increased 100.5 percent to $4.4 billion;
The single-family average price reached a new record high, rising 29.7 percent to $387,105;
The single-family median price rose 21.7 percent to $304,000 – also a record high;
Single-family homes months of inventory registered an historic low 1.4-months supply, down from 3.3 months year-over-year and below the national inventory of 2.4 months;
On a year-to-date basis, single-family homes sales are running 29.5 percent ahead of 2020’s record pace.
Townhome/condominium sales jumped 103.4 percent with the average price up 15.7 percent to $238,839 and the median price up 21.7 percent to a record high of $213,000;
Single-family home rentals fell 26.8 percent with the average rent up 10.6 percent to a record high $2,025;
Townhome/condominium leases declined 3.5 percent with the average rent up 8.5 percent to $1,716.