If you are interested in getting our thoughts on the year ahead, check out our Houston Real Estate Outlook for 2022.
Another one is in the books. 2021 has come and gone and it certainly had its highs and lows. From a real estate perspective, it was nothing but popcorn and fireworks. The Houston real estate market boomed in 2021 and hit records in almost every category, neighborhood, and price point. Home sellers loved it because they were able to sell their home fast and for a great price. Those who were lucky enough to find a home were able to lock in some historically low mortgage rates.
To end the year, we saw some mixed results across H-town. This slowdown may have a little to do with mortgage rates being on the rise. However, the crazy low inventory available in December and the typical holiday slowdown are probably more to blame.
According to the latest report from the Houston Association of Realtors (HAR), 9,272 single-family homes sold in December compared to 9,706 a year earlier for a 4.5-percent decline. That marked the third negative sales month of 2021, with declines also recorded in July and October.
The strongest monthly sales volume registered was among homes priced between $500,000 and $999,999, which jumped 41.4 percent year-over-year. Homes in the $250,000 to $499,999 range came in second place with a 17.0 percent increase
Prices of single-family homes established new December highs. The median price (the figure at which half of the homes sold for more and half sold for less) rose 17.2 percent to $319,000 while the average price went up 13.5 percent to $392,449. On a year-to-date basis, the average price rose 16.0 percent to $376,075 while the median price increased 15.4 percent to $300,000 – both records.
According to HAR, total active listings, or the total number of available properties, fell 14.1 percent to 22,496. December sales of all property types totaled 11,432, down 1.9% compared to the same month last year. As a result, the absorption rate for December 2021 was an astonishing 51%! That means over half of all active listings sold in December. That’s the 2nd highest number of the year.
Days on Market (DOM), or the number of days has been gradually increasing over the past few months. In December, the average home sold in 37 days, which is still lower than 46 days on market from lad December. Single-family homes inventory narrowed dramatically from a 1.8 months supply to 1.4 months. For perspective, housing inventory across the U.S. currently stands at a 2.1-months supply, according to the latest National Association of Realtors (NAR) report.
As we cover in our Houston Real Estate Market Outlook for 2022, the past 2 years have been extraordinarily active, despite the world health crisis. Although we do expect some balancing between a buyer’s market and a seller’s market over the next few months, we still expect the market to be pretty active. Prices should continue to increase in 2022. However, buyers should enjoy an increase in inventory, which means better options and fewer multiple offer situations.
