Houston Housing Market Sees Record Low Inventory, Prices Spike
For a city with strong, steady population growth year over year and one of the best economies in the country, Houston, Texas may have encountered a roadblock to all that influx in the form of a record low housing inventory.
A lower-than-normal housing inventory isn’t uncommon in a large metropolis like Houston, as homes availability dwindles simply from high demand. But Houston is in a unique situation. While the city enjoys prosperity in all aspects, the appeal has become strong enough to draw in a multitude of competing investors.
As the mass of investors swiftly snap up Houston area homes, home values and prices have been rising dramatically. The fervor of real estate market activity is a welcome sign for the city, but it creates a hurdle for prospective transplants seeking their new home in Houston.
The trend is peaking with no signs of slowing, with April marking 24 straight weeks of positive home sales growth. Prices were at a 14 year in 2012, with single family home median values sitting at around $174,000.
Tracing the trend up through just a month ago here in 2013, we’re looking at an incredible 10% jump, and the median price tag for single homes now sits comfortably at around $220,000. The consensus among experts is that prices will continue to rise.
As far as overall volume, the Houston Association of Realtors indicates single family home sales in 2012 were up a whopping 16%, up 4 percent over 2011.
Rental properties are equally tough to come by, even with rental rates increasing alongside the property values. The low inventory is, however, encouraging home owners and landlords to strike while the iron is hot and put real estate on the market to reap maximum profits.
Despite the dynamic and unprecedented market climate, Houston is no stranger to a bustling home market. After all, the city saw similar activity 20 years ago. Danny Frank, chairman of the Houston Association of Realtors discussed how the current market differs from the one back then.
“The recent flurry of home buying and reduced inventory may seem unusual,” says Frank, “but is exactly what the Houston market experienced back in the late 1990s. The difference is now we’re seeing multiple offers and bidding wars.”
The seller’s market might prove a bit of an unexpected pitfall for new residents. Many transplants are relocating to Houston for business and don’t have the luxury of turning down too many high quotes. Fresh new home owners in the area are venturing into the market, drawn by the appeal of record low interest rates for qualified borrowers.