Houston Strong stretches to Housing Market as 2017 Home Sales Set Records Despite Hurricane Harvey
When Superstorm Sandy hit New Jersey in 2012, the state adopted a motto during its recovery efforts, saying New Jersey was “Stronger than the storm.”
Five years later, based on the real estate market, Houston showed that it had the same gumption as its friends from the Mid-Atlantic.
Despite the devastation that was wrought on the Space City by Hurricane Harvey in the summer of 2017, new real estate records were set as the sale of single family homes grew by 3.5 percent since 2016.
According to the latest report produced by the Houston Association of Realtors (HAR), 94,726 units were sold in 2017 as compared with 91,530 in 2016, marking the record increase. Additionally, total dollar volume for single-family homes sold in 2017 rose 6.5 percent to $23 billion.
“No one could ever have imagined 2017 turning out to be a record-setting year for the Houston real estate market, which had weathered the effects of the energy slump only to have Harvey strike such a devastating blow,” said HAR Chair Kenya Burrell-VanWormer with JP Morgan Chase. “We know that many are still working tirelessly to rebuild their lives after Harvey, but overall, this clearly illustrates the incredible resilience of the people and the economy of Houston, Texas. We also know that some neighborhoods are performing better than others, so it’s always advisable to consult a Realtor when thinking about buying or selling a home.”''No one could ever have imagined 2017 turning out to be a record-setting year for the Houston real estate market.'Click To Tweet
The market will be challenged in 2018, however, where the real effects of Harvey can be felt. The housing supply in Houston is definitely constrained thanks to the Hurricane.
Houston was finally reaching a balanced supply of housing inventory when the storm hit. The widespread flooding created by Harvey forced affected residents to gobble up whatever undamaged homes were available for sale or rent in an effort to provide consistent and safe shelter for themselves and their families.
Yet, despite that late summer rush on housing, the market was thriving in December – just four months after the storm – as single-family home sales rose 4.1 percent from December, 2016.
The strongest sales performance took place among homes priced between $250,000 and $500,000. Total property sales for the month climbed 3.5 percent to 8,125.
The single-family home median price (the figure at which half of the homes sold for more and half sold for less) rose 1.7 percent to $230,000. That marks the highest median price ever for a December. The average price declined 0.6 percent to $292,174.
Overall, 2017 turned out to be a pleasant surprise as far as the housing market was concerned.
Heading into the year, Houston was still feeling the effects of a weakened energy sector, but there was some optimism based on the data from the end of 2016 that the city was beginning to recover as inventory numbers were steadily increasing.
Strong employment numbers translated to an influx of home buyers and renters to the Houston area from across the country and around the world.
But then came Harvey, which had an adverse affect not just on homes and residents, but also on the city’s economy as hiring grinded to a halt and those displaced resident sought new shelter, shrinking the inventory again.
Miraculously though, the setbacks related to Harvey were much shorter than expected.
This was fueled by the greatest rental activity in the city’s history as well as a quick rebound of home sales, building momentum for the Houston housing market for the end of the year.
By the end of December, a record 79,117 single-family homes had sold, a new record for a single year. That represents an increase of 3.5 percent from the previous record of 76,450 in 2016.
On a year-to-date basis, the average price rose 2.9 percent to $291,340 while the median price increased 3.8 percent to $229,900. Total dollar volume for full-year 2017 jumped 6.5 percent to $23 billion.
The strongest one-month sales volume of 2017 was recorded in June with 8,362 single-family homes sold. By contrast, the lightest one-month sales volume took place in January with 4,104 sales.
Months of inventory began the year at a 3.3-months supply, and while it grew to a 4.3-months supply just before Harvey struck the region, it ended 2017 at a 3.2-months supply. Months of inventory estimates the number of months it will take to deplete current active inventory based on the prior 12 months sales activity.