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The best time to buy a house in Houston was last year

Or the year before that, or the year before that

The O’Neals are part of a nationwide real estate frenzy playing out in Houston that is propelling prices to new highs. Houses are frequently drawing multiple offers, often above the asking price and can sell in a matter of days if they’re in good condition, according to local real estate agents.

The median price of a single-family home reached $260,212 in 2020, up 6.2 percent from 2019, according to an analysis of home sales and prices compiled by the Houston Association of Realtors for the Houston Chronicle. The increase in the median sales price was nearly twice the 3.2 percent year-over-year gain in 2019, according to HAR.

The increase came amid demand fueled by continued low interest rates, an extreme shortage of houses on the market and a rekindled desire for homes in the suburbs stemming from the pandemic as people spend more time at home. At the same time, despite the rising prices, the pandemic forced people to cancel vacations, stop eating out and allowed them to pay down debt, giving them more buying power than ever. Some of that may carry over to the future.

“We have a new habit of spending a lot of time at home,” said Ted C. Jones, chief economist with Stewart Title. “We’ll definitely eat out more, but maybe not as much as we did 24 months ago.”

Meantime, said Frank Lucco, an appraiser with Accurity Qualified Analytics, “Houses are flying off the shelves.”

Lucco said he has never seen Houston home prices rise this quickly in his 43 years as an appraiser. Traditionally, home prices have risen 3 percent to 4 percent annually over the last two decades. The veteran appraiser has been constantly adjusting his appraisals upward to reflect Houston’s fast rising prices.

“There’s multiple contracts on houses,” he said. “It’s not uncommon for houses to sell in the same day it’s listed.”

In March, 2,165 houses in the Houston area — 23.2 percent of the month’s sales — sold for above asking price, according to HAR. That’s nearly three times the 8 percent that sold for more than asking a year ago.

Everyone reading this in Austin and its environs is no doubt nodding their head grimly. You want crazy home prices and bidding wars, that’s the place for it. The same is going on in the greater D/FW area as well. As this story notes, there’s a lot of demand out in the burbs, with their bigger houses and spacious yards that have been a blessing for many in the pandemic, but there’s also a lot of demand for the urban core, especially among younger buyers. There’s plenty of construction in my neighborhood, and I can’t think of any lots that have been on the market for more than a couple of weeks. Whatever else you might say, it’s better to be a place where people want to live.

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One Comment

  1. Jason Hochman says:

    They keep saying that the houses in Houston are selling like crazy and people are bidding up the prices, but my observations are otherwise. The house across the back way here has been empty since late summer/early autumn. People look at it, but no buyers. The price has been dropped $18,000. Another house nearby has a sign that announces “price reduction.” There is a big capacity of fallow homes around here, as well as lots for sale that have been up for several months. Maybe I have a repellent effect on potential buyers around here, but then again, the news media present things that benefit their corporate overlords.