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Another record year ahead? Houston real estate will outpace the nation in 2015, top economist says
The Houston housing market, coming off the strongest October on record, will outperform the nation in 2015, says one of the nation’s leading residential real estate economists. Home sales will be strong in the Bayou City next year and home prices will continue to rise, says Lawrence Yun, chief economist for the National Association of Realtors.
Yun praised the Houston market in an exclusive interview with CultureMap in New Orleans, where the Realtors association concluded its national convention earlier this week.
Across the nation, Yun predicts that home prices will rise over 4 percent in 2015 as the economy improves. But Houston home prices will do better than the national average, Yun says. Houston will also surpass the nation’s projected 7 percent increase in the number of homes sold next year.
“Houston should beat those figures,” Yun says. “Houston is an exceptional market. The city’s job growth situation easily outpaces the country.”
What else does Yun see in Houston’s real estate future? … A boom in downtown.
“I think there will be more demand, particularly for a city the size of Houston, for more downtown living in the future to avoid the traffic,” Yun says. “In the past, 10 years ago, Houston was a ghost town after work, but now it is becoming a 24-hour city.”
The optimism about the Houston market remains high in virtually all quarters. Houston added about 120,000 new jobs over the last 12 months, a growth pace that has been achieved only a few times in the city’s history.
The strong economy, with mortgage interest rates around 4 percent and a very tight inventory of homes for sale, have stoked the market.
Houston had 6,639 single-family home sales in October, the strongest October on record and a 12 percent over last October, according to the Houston Association of Realtors.
The inventory of homes for sale is exceptionally tight – a condition that has prevailed in the Houston market in recent years. Houston has a 2.8-months supply of homes for sale, much lower than the national average of 5.3-months.
“The inventory remains very low,” says Houston Realtor Amy Bernstein of Bernstein Realty. “In some areas and some price ranges are still seeing multiple offers. But not all areas.”
Although the pace will be slowing as the holiday season nears, multiple offers are still happening frequently in the Memorial area, inside the Loop, parts of Katy and The Woodlands, Bernstein says.
The outlook for Houston realty in 2015 remains strong.
“I’m not seeing any signs of a bubble, “ Bernstein says. “With interest rates remaining low and inventory staying very low, I expect 2015 to be a strong year for the real estate market.”
Pending sales, an indicator of future activity, was up 9 percent in October over the previous year, indicating a strong finish to the year.
Home prices continue to rise in Houston, hitting an all-time high for an October. The single-family median price in October was $192,000 and the average price was $262,013, the Houston Association of Realtors reports.
For the month of October, the total dollar volume for all properties sold through HAR was $2 billion, up 22 percent from $1.7 billion a year earlier.
“Most Realtors are not accustomed to this brisk a pace of home sales in Houston this late in the year,” said HAR Chair Chaille Ralph with Heritage Texas Properties.
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