Below is the latest report of the Greater Houston Area Housing Market released by the Houston Association of Realtors. It compares key housing metrics of the entire Greater Houston area from February 2021 to February 2020.
Single-family home sales increased for the ninth consecutive month, up 1.2 percent year-over-year with 6,049 units sold.
The Days on Market (DOM) figure for single-family homes dropped from 68 to 48.
Total property sales rose 1.9 percent with 7,464 units sold.
Total dollar volume jumped 17.3 percent to $2.4 billion.
The single-family average price reached a record high, rising 16.2 percent to $349,963.
The single-family median price climbed 12.6 percent to $275,900 – also a record high;
Single-family homes months of inventory registered a historic low 1.6-months supply, down from 3.3 months before the pandemic and below the national inventory of 1.9 months.
Townhome/condominium sales rose 4.1 percent with the average price up 1.4 percent to $219,326 and the median price up 1.0 percent to $178,700;
Single-family home rentals fell 26.1 percent with the average rent up 8.7 percent to $1,924.
Townhome/condominium leases dropped 15.7 percent with the average rent up 1.9 percent to $1,637.
Broken out by housing segment, February sales performed as follows:
$1 – $99,999: decreased 40.6 percent
$100,000 – $149,999: decreased 42.8 percent
$150,000 – $249,999: decreased 16.8 percent
$250,000 – $499,999: increased 16.0 percent
$500,000 – $749,999: increased 55.3 percent
$750,000 and above: increased 64.9 percent
Looking at the current statistics, what are the Houston real estate market predictions? Let us examine the price trends recorded by Zillow over the past few years. Since 2012, Houston’s typical home value (includes only the middle price tier of homes and it is NOT the “median home value”) has appreciated from $116,000 to $204,810, according to Zillow’s Home Value Index. That’s a cumulative price appreciation of nearly 77%.
The typical home value has increased by 9.5% over the past year due to strong demand and low mortgage rates. Last year saw was the ninth consecutive year of home price gains. NeighborhoodScout.com’s data also shows that Houston real estate appreciated by nearly 60% over the last ten years. Its annual appreciation rate has been averaging at 4.82%.
This figure puts it in the top 20% nationally for real estate appreciation. In the latest quarter, their data shows that house appreciation rates in Houston were at 1.86%, which equates to an annual appreciation rate of 7.63%. The forecast by Zillow also points in the same direction — a rise in home values over the next 12-months. This indicates that the prices will continue to rise in 2021. Hence, it is a good time to buy a house in Houston.
There exists a limited supply of homes in Houston, and buyers are forced to compete often resulting in higher prices and/or quicker sales that tend to benefit sellers. In other words, based on the last latest key housing market indicators, the demand is exceeding the supply, giving sellers an advantage over buyers in price negotiations. Houston is a seller’s market so watch for upward pricing pressure in the near future if the trend continues.
Clearly, for the long-term investment, you cannot ignore underestimate Houston. Investing in a rental property for the long-term would build your equity and also generate cash flow through rental income. If you want to increase your cash flow in 2021, you will find great deals in the Houston real estate market.
Here is Zillow’s home price forecast for Houston, Harris County, and Houston – The Woodlands-Sugar Land. The Zillow Home Value Forecast (ZHVF) is the one-year forecast of the Zillow Home Values Index (ZHVI). ZHVF is created using all homes, mid-tier cut of ZHVI and is available both raw and smoothed and seasonally adjusted.
Houston-The Woodlands-Sugar Land Metro home values have gone up 8.1% over the past year and the latest forecast is that they will rise 10.8% in the next twelve months.
Houston home values have gone up 9.5% over the past year and will continue to rise at a similar pace due to the tight supply of housing.
Harris County home values have gone up 9.4% over the past year and will continue to rise over the next twelve months from now.
Houston Rental Market Trends 2021
Before the pandemic, the average rent for an apartment in Houston was $1,118, a 2% increase compared to the previous year, according to RENTCafe. The average size for a Houston, TX apartment is 880 square feet with studio apartments being the smallest and most affordable. 1-bedroom apartments are closer to the average, while 2-bedroom apartments and 3-bedroom apartments offer more generous square footage.
48% of the households in Houston, TX are renter-occupied while 52% are owner-occupied. More than 80% of the apartments in Houston fall in the price range of $500 – $2.8K.
The Zumper Houston Metro Area Report analyzed active listings in March 2021 across 11 metro cities to show the most and least expensive cities and cities with the fastest-growing rents. The Texas one-bedroom median rent was $970 last month. Sugar Land was the most expensive city with one-bedrooms priced at $1,170 while Huntsville ranked as the most affordable city with one-bedrooms priced at $530.
The Fastest Growing Cities For Rents (Y/Y%)
Conroe had the fastest-growing rent, up 4.3% since this time last year.
Pearland saw rent climb 3.6%, making it second.
Pasadena was third with rent increasing 2.6%.
The Fastest Growing Cities For Rents (M/M%)
Pearland had the largest monthly rental growth rate, up 4.5%.