Houston’s red-hot housing market is starting to cool off, with listings piling up as sales fall.
In June, the number of active listings in the Bayou City was 27.4 percent higher than at the same time last year, according to a report from the Houston Area Realtors. Some of that increase was due to an overhang of unsold homes, as June sales were down 8.6 percent year on year — the third month in a row that 2022 sales failed to keep pace with 2021.
But an increase in new listings was also a factor, with 8.3 percent more homes hitting the market in June than last year.
In a reflection of rising home prices, however, the total dollar volume for property sales in June was 1.6 percent higher than in the year before, coming in at about $4.9 billion. The median price of a home in Houston climbed 13.2 percent year-on-year to $355,000, while the average price of $436,425 was 11.0 percent higher than last year — though that’s slightly down from May’s all time record of $440,670.
Houston’s townhome and condominium sales experienced their first decline in nearly two years, falling 15.3 percent year-on-year, with the average price up 4.7 percent to $259,557 and the median price up 2.7 percent to $220,000.
The market slowdown has been recent and sharp, as data shows that Houston’s total year-to-date home sales are still 1.7 percent ahead of 2021, according to the report.
A lack of starter homes priced below $250,000, in addition to rising interest rates, have left would-be homebuyers in Houston with no choice but to turn to the rental market or postpone any plans to buy.
Houston’s available inventory reached a 2-month supply in June — the highest since November 2020 when supply hit 2.1 months. Nationally, housing inventory is at a 2.6-month supply, according to the latest report from the National Association of Realtors. A 5-month supply of homes is generally considered a “balanced market,” in which neither the buyer nor the seller has an advantage.Anything less than a 4-month supply is considered a sellers’ market.
So Houston home sellers are still in the driver’s seat — for now.