Houston sees 'lackluster' home sales in September, inventory reaches pre-Covid levels

Houston home sales once again fell year over year in September while prices held steady heading into the typically slower fall and winter seasons. Meanwhile, inventory has reached a level not seen since before the Covid-19 pandemic began.

There were 6,886 single-family homes sold last month, the Houston Association of Realtors reported Oct. 11. That’s down 10.9% compared to September 2022 — marking the 18th straight month of declines — but down only 2.3% compared to September 2019 before the pandemic.

Similarly, total property sales fell 9.5% year over year to 8,550 units, while the dollar volume of all sales totaled less than $3.33 billion, down 9.6%. Townhomes and condominium sales fell 14.4% year over year — marking their 16th straight monthly decline — or 5.2% compared to September 2019.

Sales of single-family homes were down in every pricing segment except for the under-$100,000 market, which was statistically flat, HAR said. The smallest decrease was seen in the luxury segment — homes priced at or above $1 million — which experienced a 4.5% drop in sales.

Single-family home prices in September were very similar to prices a year earlier. The average price inched up just 0.8% to $416,664, while the median price dipped 2.2% to $333,000.

Similarly, the average price for townhomes and condos was statistically flat at $257,909, while the median price inched up 2.2% to $224,250.

Meanwhile, inventory of single-family homes jumped to a 3.5-month supply — up significantly from 2.6 months a year earlier. This is Houston’s highest inventory level since a 3.6-month supply was recorded in November 2019, months before the pandemic disrupted the market.

Inventory of townhomes and condos is also at a 3.5-month supply — the highest level since November 2020 and up from a 2-month supply in September 2022.

Months of inventory estimates the time it would take to sell the homes currently on the market based on the past 12 months of sales activity. Nationwide, inventory is at a 3.3-month supply, according to the National Association of Realtors. Inventory between 4 and 6 months is generally considered a “balanced market” in which neither the buyer nor the seller has an advantage.

Looking ahead, total active listings are up 13.7% compared to the same time a year ago, while single-family pending sales are up 1.2%.

“September was a rather lackluster month on the sale side of Houston real estate, and with the holidays approaching, we probably won’t see much improvement as this is traditionally a slow time of year for our industry,” said HAR Chair Cathy Treviño with LPT Realty. “Rental homes continue to draw strong interest from consumers and it will be interesting to see if that flourishes throughout the holiday season as would-be buyers remain skittish over mortgage rates.”