Houston Housing Update

 

January 2016

The Houston Association of REALTORS® has released December 2015 and YTD 2015 home sales results. A few items of note:

  • December 2015 sales compared to December 2014 continued the downward trend that we saw in October and November. Sales were off just under 10% compared to a year ago.
  • 2015 in total was a strong year for home sales, second only to 2014 in Houston’s history. 73,724 single-family homes were sold in 2015 compared to 75,535 sold in 2014.
  • The average sales price in 2015 was $280,290 vs. $270,182 in 2014, up 3.7%; median sales price was $212,000 vs. $199,000, up 6.5%.
  • Months of inventory went from 2.5 in December 2014 to 3.2 in December 2015.

 

Find the complete report at: http://www.har.com/content/mlsprint/?m=1&y=16

 

 

Barry’s Take

Home sales slowed in the 4th quarter of 2015. We’ve been expecting this adjustment due to the significant downturn in oil prices and the responsive cut-backs of oil-producing companies. Despite the Q4 slowing, 2015 was a strong year in home sales, and home values have remained positive. That the average sales price was up by 3.7% shows even stronger when you note that the 2015 Consumer Price Index for the Houston area was a mere 0.4%. Those increased prices were real gains in value.

 

So, what do we expect for 2016? Well, I, like you, cannot foretell the future. However, there are a few things that we do know. 2016 will be another tough year for the oil & gas industry. Oil, currently hovering around the $30 mark, will likely stabilize but is not expected to begin its uphill climb for a while, and will need to get above $50/barrel for the latest production technologies to kick back in (i.e. shale production). Even then, companies will be cautious… slow to respond with renewed exploration. The Greater Houston Partnership does project an increase in jobs through 2016, driven by other industries such as health care. Despite the job cuts in oil & gas, there is still an influx of population into the Houston Metro, and there is still an undersupply of single-family homes.

 

Home sales will continue to be lower than a year ago, but there is no expectation that the bottom will drop out since the market is still undersupplied. Homes will continue to take longer to sell, but the 3.2 months of inventory is still below that national average of 5 months. Home values appear to be holding up. Mortgage rates have been fluctuating below the 4% mark, indicating that the Fed rate increase has not had a substantive impact on them. In Houston Metro, the outlook is still positive for those buying or selling homes.

 

Now is the time of year when people begin to think about the possibility of moving. If you, friends or family members are in that frame of mind, please get in touch with me. I’ll be giving you a call soon to see if there is some way in which I may serve you.

 

With appreciation,

Barry

Barry Hart, REALTOR®
Keller Williams Signature Realty
832 859 4725
JBHart80@gmail.com