The month of October witnessed many records being broken as Houston’s real estate market continues its phenomenal progress. Despite the fact that the year is nearing an end, the economy of the city is still strong. Mortgage rates have increased, but are still significantly lower than past values and so homebuyers are eager to use the situation to their full advantage.
In the month of October, more than 6,000 single family residences were sold. Compared to past values of this same month, this is the highest number. The closest value was around 5,600 observed in the year 2006.
When asked to comment on the situation, a reputed real estate agent said that the market has never done so well before. And it is not just one part of the city that is doing well; it is the entire city that has been performing above par.
As the sales go higher, the levels of the home inventory continue to fall. In September, this value was 3.2 months and in October, it fell to 3.1 months. Just a year back, the value was 4.4 months. As of right now, the inventory has sort of become tight and is pressuring home prices to rise higher.
A representative at a real estate firm stated that the problem of low inventory cannot be solved until the builders construct homes at a more quickened pace. With the rate at which this is being done now, there is a good chance that the inventory will exhaust. An industry expert has evaluated that the rate should be increased by as much as 50% to 60% so that the demand can equal the supply.
In the past few years, home building was put to a stop as there were no buyers around. The pace has now increased but this is mainly due to the bigger construction firms. All small and medium sized construction companies do not have enough finances to increase the pace more. They are making efforts but still cannot achieve the results they hope for.
There are difficulties in increasing the pace not just from a financial perspective, but also because of a lack of labor. A lot of carpenters, plumbers and bricklayers switched to other industries in the period when there was not enough home construction.
The conditions of the real estate market do have the potential of solving all these issues.