With over 7.21 million residents, Houston is the fourth-largest city in the United States. In recent years, the city has seen significant growth, for good reason. As the nation’s energy capital, it offers residents a strong job market, higher-than-average wages, and rising property values.
While inflation and rising interest rates have put a damper on the U.S. housing market as a whole, many real estate professionals wonder what this means for the Houston real estate market. Here’s what you need to know.
Houston Home Sales and Prices
In December 2022, single-family home sales saw a 32.65% year-over-year decline — the weakest December since 2015. While this is concerning, it’s notable that 2022 was the first time in three years that the Houston region did not set a record for single-family home sales. The drop in sales also had only a marginal impact on prices. In December 2022, the median price for a single-family home was $330,000, down slightly from the 2022 peak of $353,995 and still well above the December 2020 median price of $272,125.
While home inventories began to rise in October 2022, hitting a peak of 36,751, available homes slipped again in December, dropping back down to 33,476. This drop was primarily due to homeowners’ reluctance to list their homes in a high-interest-rate environment. So far in 2023, new listings have been decreasing as quickly as home sales, suggesting that home inventories are not likely to improve in the immediate future.
2023 Houston Housing Market Outlook
When it comes to Houston’s 2023 housing market outlook, Houston Association of Realtors (HAR) Chair Jennifer Wauhob suggests that the area’s “years of unprecedented growth” are coming to an end. However, she predicts that as prices level off, more buyers will come off the sidelines, giving the area's housing market another boost.
While some people worry that a housing market crash could be on the horizon for Houston, experts say that the market here has not decreased as dramatically as in other metro areas, so it’s unlikely that it will go into a freefall.
There are pros and cons for both buyers and sellers in the current Houston market. Some buyers may find that it pays to hold off and wait for the inventory of homes to rise, giving them a greater selection. As the market becomes more competitive, list prices are also likely to level off, making homes more affordable. On the other hand, buying sooner rather than later can allow homeowners to begin building equity right away. Buying a home is also an attractive option right now, considering that rental costs remain quite high.
Houston’s Rental Market
As of January 2023, the median rent for a one-bedroom apartment in Houston was $1,319, which represents a 6% year-over-year increase. However, average rents are starting to decrease slightly. Rents for one- and two-bedroom apartments have decreased by 3%, while the average cost of rent for a studio apartment is down 10%.
Get Involved in Houston’s Real Estate Market
The predicted changes in the Texas real estate market can create some exciting opportunities for licensed real estate agents. As prices level out, the area is likely to become more attractive for homebuyers who were hesitant to purchase when home sales were at their peak. Home sellers will also need professional advice to navigate a market that is beginning to favor buyers over sellers.
No matter which way you slice it, now is a great time to get your Texas real estate license. AceableAgent’s online course will make it easy for you to pursue your new career path. Check it out today!