Houston’s real estate market showed strong gains yet again in 2003, representing the highest number of homes sold by Realtors in one year, according to the Houston Association of Realtors.
This marks the fourth consecutive year that home sales have broken annual records. The total number of properties closed in the Houston-area MLS in 2003 surpassed 2002’s figure of 60,247 by 8 percent, closing the year at 65,046.
“Low interest rates and a strong starter-home market were the driving factors behind Houston’s residential real estate market during 2003. I also believe that 2004 is shaping up to look like the second-best year on record, just behind the all-time record high in 2003,” said Ted C. Jones, Ph.D., HAR chairman and Stewart Title chief economist. “Interest rates will remain highly favorable throughout the year, but will begin to drift upwards as the year goes on.”
The median price for single-family homes in 2003 peaked at $143,000 during July, representing the highest median price ever recorded in Houston.
Record high prices and sales totals translated into a total dollar volume of approximately $10.8 billion for 2003, an increase of 7.3 percent from 2002’s total of $10 billion.
Another top story in 2003 was the amount of available inventory listed by Realtors in the MLS system. The year began with an available inventory of 34,012 active listings. Figures increased steadily throughout the year, peaking at 38,884 in September and finishing in December at 35,394. (For the year previous, the peak in 2002 occurred during October with 34,027 listings). In addition, the overall yearly average number of available listings during 2003 also rose to 36,845. There was an average of 31,366 available listings during 2002. Houston has not experienced such a strong available inventory since 1987.
Although inventory rose in 2003, the number of months of inventory of homes available for sale remain indicative of a very healthy relationship between supply and demand. Normal inventory is considered to be nine or 10 months for existing homes, while anything less than eight months is a seller’s market and more than 12 months is a buyer’s market. This past year ended with 6.2 months, up from 5.2 months a year ago.
“Big inventories in the higher price ranges have muted the aggressive 7 percent price increases we saw in the past, but overall the average Houston home price will rise once again in 2004 by an estimated 4 to 5 percent,” said Jones.
The computerized Multiple Listing Service of the Houston Association of Realtors includes residential properties and new homes listed by more than 17,000 Realtors throughout Harris, Fort Bend and Montgomery counties, as well as parts of Brazoria, Galveston, Waller and Wharton counties.
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