Thursday, June 11, 2020

Houston Real Estate in May: Sales Down 20.7% YoY, Inventory Down 8.3% YoY

by Calculated Risk on 6/11/2020 01:52:00 PM

From the HAR: Coronavirus and Ailing Energy Industry Continue to Impact Houston Real Estate

Houston home sales fell for a second straight month in May as the impact of COVID-19 and related stay-at-home orders continued to play out throughout the market. Growing consumer interest in in-person open houses and property showings, as well as an increase in offers to purchase, demonstrated improving market conditions. The slumping energy industry limited buyers in the luxury home market, which affected the overall average price of single-family homes across the region. Predicting the future of the market remains a challenge, and just this week, the National Bureau of Economic Research declared that the United States has been in a deep recession since February. ...

According to the latest monthly Market Update from the Houston Association of Realtors (HAR), 6,671 single-family homes sold in May compared to 8,359 a year earlier. That translated to a 20.2 percent decline – the second consecutive monthly decline since the pandemic struck the market. ... Sales of all property types totaled 7,917, down 20.7 percent from May 2019. Total dollar volume for the month fell 25.9 percent to slightly more than $2.2 billion.

“May delivered another mixed bag of data for the Houston housing market given the ongoing coronavirus pandemic on top of strains in the oil patch and the broader recession,” said HAR Chairman John Nugent with RE/MAX Space Center. “We will eventually work our way through these challenges, and already see positive indicators in the form of strong rental activity, solid pending sales numbers and steady attendance at property showings across greater Houston. Historically low interest rates still make conditions appealing to would-be buyers.”
emphasis added
Inventory declined 8.3% year-over-year from 43,096 in May 2019 to 39,516 in May 2020.

Sales in Houston set a record in 2019 and were off to a strong start in 2020. However the impact of COVID-19 (and lower oil prices) has been significant. Note that the closed sales in May were for contracts that were mostly signed in March and April - so a large decline was expected.