Preload Spinner

Houston Real Estate Market Report | September 2023

BACK

Houston Real Estate Market Report | September 2023

In August, Houston’s real estate market saw some positive signs as it moved towards a more balanced state.

Courtesy of HAR.com

Despite ongoing concerns about high interest rates and home prices, there were several notable developments:

Sales Decline Slows: Home sales continued to decline, marking the 17th consecutive month of decreases. However, the rate of decline in August was the lowest in over a year, with sales dropping by only 3.8% compared to the previous year. This is a significant improvement compared to May 2022 when sales fell by 0.8%.

Improved Inventory: The supply of homes on the market increased to 3.3 months, reaching its highest level since May 2020. This is in line with the national housing market, which also had a 3.3-month supply. Traditionally, a 4.0- to 6.0-month supply is considered a balanced market.

Luxury Homes Buck the Trend: Luxury homes priced at $1 million and above saw an increase in sales, making them the only segment with positive growth.

Stable Prices: Single-family home prices remained stable, with the average price rising by only 2.5% to $420,124, and the median price staying statistically flat at $339,000. These figures are below the record highs reached in May and June 2022.

Rental Market Remains Strong: Rental properties, including single-family homes and townhomes/condominiums, continued to perform well.

Total Property Sales: While single-family home sales declined, total property sales and total dollar volume also decreased compared to the previous year. Total dollar volume in August 2023 was $3.8 billion, down from $3.9 billion in August 2022.

Days on Market Increase: The time it took to sell a home increased from 32 to 42 days. This is reflective of the changing market dynamics.

Townhouses/Condominiums: This segment saw a 19.0% decline in August, with inventory levels reaching their highest point since January 2021.

In summary, the Houston real estate market showed signs of steadying in August. While sales continued to decline, the rate of decline was the lowest in over a year, and inventory improved. Prices remained stable, and the luxury housing segment performed well. The rental market also remained strong. These developments indicate a return to more typical market conditions, though challenges such as interest rates and affordability continue to be on the radar.