Even a catastrophic global pandemic couldn’t deter the Houston real estate market from breaking records as the calendar year 2020 came to a close. Even as the stock of homes shrank to all-time lows, single-family home sales exceeded the previous year’s high volume by more than 10%.
During March and April, stay-at-home orders arising from the COVID-19 outbreak disrupted local real estate development. Shortly after, real estate was designated as an “important service,” allowing Realtors to continue working with would-be homebuyers seeking to take advantage of historically low mortgage interest rates. Consumers searching for rental properties in the Houston area were also aided by realtors. Even after the stay-at-home orders were lifted, virtual technology created by the Houston Association of Realtors (HAR) allowed consumers to attend open houses and property showings without jeopardizing their health. April and May were the only negative sales months by the end of 2020, as the market stabilized over the summer and gained traction each month for the rest of the year.
Single-family home sales increased 10.5 percent to 96,151 in 2020, according to HAR’s annual market survey. The total number of sales for the year was 115,523. This is an 11.6 percent improvement over the previous year’s high volume, and it’s just the second time in history that overall property sales have surpassed 100,000. The total dollar amount for 2020 increased by 18.1 percent to $35.3 billion, a new high.
Sales of single-family homes rose by 25.5 percent in December compared to December 2019. Homes priced between $500,000 and $750,000 saw the most sales activity, with an increase of 80.8 percent. The luxury market, which includes houses priced at $750,000 and up, came in second, with a 54.0 percent increase. Then came homes priced between $250,000 and $500,000, which grew by 44.6 percent.
Single-family home prices reached new highs in December. The median price, which represents the price at which half of the homes sold for more and half for less, increased by 8.7% to $273,443, while the average price increased by 11.4 percent to $347,164.
Houston 2020 Annual Market Comparison
The Houston real estate market entered 2020 with a favorable outlook from the previous year, but with declining inventory due to a combination of strong sales and a lack of new listings. There were still lingering worries about the potential consequences of widespread layoffs in the energy sector. Despite this, sales remained positive for the first three months of the year before the COVID-19 pandemic struck, causing sales volumes to plummet in April and May as stay-at-home orders briefly halted real estate activity. The classification of real estate as an “important service” and the launch of virtual technology by HAR that enabled consumers to tour listed properties remotely helped the market turn around in June.
Sales rose every month for the rest of 2020, but without new listings to backfill the supply, inventory plummeted to the lowest level in history by the end of the year – a 1.9-month supply. Based on the previous 12 months’ sales operation, months of inventory calculates the number of months it will take to deplete existing active inventory. A “balanced market” has historically been described as a supply of 6.0 months.
New real estate records were broken throughout the year, with July recording the highest single-month sales volume in Houston history, with 10,815 single-family units sold. In December, a new high average price of $347,164 and a new high median price of $273,443 was set.
In 2020, a total of 96,151 single-family homes had sold in Greater Houston by the time the books were closed on December transactions. This reflects a 10.5 percent raise over the previous high of 86,996 in 2019.
The average price increased 5.9% year-over-year to $324,069, while the median price increased 6.1 percent to $260,000. The overall dollar amount for the entire year of 2020 rose by 18.1 percent to $35.3 billion, a new high.
Houston December 2020 Monthly Market Comparison
Except for active listings and inventory, the Houston housing market generated positive readings in December. Compared to December 2019, single-family home sales, total property sales, total dollar value, and pricing were all up. Single-family home pending sales totaled 7,469 at the end of the month, up 40.5 percent from a year ago. The total number of active listings, or available assets, decreased by 28.6% year over year to 26,821.
The stock of single-family homes has shrunk sharply, from 3.2 months to 1.9 months. According to the new National Association of Realtors (NAR) survey, the United States’ housing inventory currently stands at a 2.3-month supply.
Houston Real Estate Single Family Homes Update
Sales of single-family homes totaled 9,652, up 25.5 percent from December 2019. That was the seventh month in a row that sales had improved. The median price increased by 8.7% to $273,443, an all-time high. The average price rose by 11.4 percent to $347,164, which is a new high. The average days on market (DOM), or the number of days it took to sell a home, decreased from 63 to 46.
- $1 – $99,999: decreased 15.7 percent
- $100,000 – $149,999: decreased 20.2 percent
- $150,000 – $249,999: increased 13.2 percent
- $250,000 – $499,999: increased 44.6 percent
- $500,000 – $749,999: increased 80.8 percent
- $750,000 and above: increased 54.0 percent
HAR also breaks down current single-family home sales. In December, there were 7,647 existing home sales. This is up 31.6 percent from the same month the previous year. The median sales price increased 12.8 percent to $265,000. The average sales price increased 14.2 percent to $340,400.
Houston Real Estate Townhomes & Condominiums Update
Townhome and condominium sales had an excellent finish to a year that saw dramatic drops in April and May due to the COVID-19 pandemic, as did all other housing styles. Volume increased by 10.9 percent in December, with 659 units sold compared to 594 a year ago. The median price dropped 2.7 percent to $180,000, while the average price remained statistically unchanged at $227,856. Inventory fell from a 3.9-month supply to a 3.3-month supply.
Houston Real Estate Lease December Update
In December, Houston’s lease market had a mixed result. Leases for single-family homes dropped 14.5 percent, while leases for townhomes and condominiums increased 13.1 percent. Single-family home rents increased by 7.5 percent to $1,899, while townhome/condominium rents increased by 3.6 percent to $1,641.
Houston Real Estate Highlights for December and Full-Year 2020
- Despite a devastating global pandemic, 2020 proved to be a record year for Houston real estate with 96,151 single-family homes sold versus 86,996 in 2019, the last record-setting year. That represents an increase of 10.5 percent;
- Total dollar volume for full-year 2020 rose 18.1 percent to a record-setting $35.3 billion;
- December single-family home sales jumped 25.5 percent year-over-year with 9,652 units sold;
- Total December property sales increased 27.2 percent to 11,572 units;
- Total dollar volume for December soared 39.3 percent to $3.9 billion;
- At $273,443, the single-family home median price rose 8.7 percent, establishing a new record high;
- The single-family home average price climbed 11.4 percent to an all-time high of $347,164;
- Single-family homes months of inventory narrowed sharply to a record low 1.9-months supply;
- Townhome/condominium sales rose 10.9 percent year-over-year with the average price unchanged at $227,856 and the median price down 2.7 percent to $180,000;
- Leases of single-family homes fell 14.5 percent with average rent up 7.5 percent to $1,899;
- Leases of townhomes/condominiums climbed 13.1 percent with average rent up 3.6 percent to $1,641.
Ready to Experience The Houston Premium Homes Difference?
At Houston Premium Homes Realty Group, our agents are hyperlocal experts who know just what it takes to help make the dream of homeownership easier. With our agents located all around Houston, Texas, it’s never been easier to start bringing your biggest home purchasing dreams to life.