September 2024 Real Estate Market Update

Source: Keller Williams Memorial Agent Metrics

Stop me if you’ve heard this before: home prices are climbing, but so is the number of available homes, and mortgage rates are dropping. If you’re trying to figure out whether to buy or sell, it’s easy to feel caught in the middle. On one hand, you might worry that waiting could mean missing out on a low mortgage rate. On the other, rising inventory might signal a potential drop in prices—so why not wait? It’s a tough call.

Here’s where things get clearer. The Houston real estate market is sending mixed signals, but with the right insights, you can make an informed decision. As of August 2024, we’re seeing an 8.78% increase in the average sales price compared to last year, while the number of homes for sale has jumped by over 20%. Meanwhile, mortgage rates have dropped from their April 2023 highs, giving buyers a much-needed break.

In this market update, you'll get a clear breakdown of the latest trends in Houston real estate. By the end, you’ll know whether it’s a good time to buy, sell, or wait—and how to navigate the changing landscape.

Market Overview: September 2024

September has brought some noticeable shifts in Houston’s real estate landscape. Here are the key metrics shaping the market:

Average Sales Price: $467,188 (up 8.78% from last year)
Median Sales Price: $325,000 (holding steady year-over-year)
Days on Market: 37 days (8 days longer than August 2023)
Home Sales Volume: 3,712 homes sold (a 10.9% increase over 2023)
Inventory Levels: 10,903 homes (a 20.7% rise from last year)

These numbers reveal a market that’s growing in terms of inventory, yet holding strong in terms of pricing. More homes are available, but buyers are still willing to pay top dollar for the right property.

Sales Prices and Trends

One of the standout trends this August 2024 is the steady rise in home prices despite the significant boost in inventory. The average sales price has climbed to $467,188, marking an 8.78% increase from August last year. What’s interesting, though, is that the median sales price—$325,000—hasn’t budged from last year.

So what does this mean for you?

If you’re buying, this shows that higher-end homes are pushing up the average price, while more affordable options remain available at last year’s levels. If you’re selling, it means demand is still strong enough to support competitive pricing, particularly for homes in the middle-to-higher price ranges.

Inventory and What it Means for Buyers and Sellers

Inventory in Houston has shot up by 20.7% this year, reaching 10,903 homes on the market. This increase in supply offers a bit of breathing room for buyers who’ve been feeling the pinch of tight competition over the past couple of years. More choices mean less pressure to rush into a decision—at least for now.

However, rising inventory can sometimes signal a future softening in prices. Sellers may need to be mindful of this shift and adjust expectations accordingly. While prices are holding strong now, a continued rise in available homes could start to level off the growth in sales prices.

Mortgage Rate Trends

Perhaps the most exciting news for buyers in September is the drop in mortgage rates. After soaring above 7% earlier last year, rates have fallen to 6.12% as of mid-September. This 1.4% decrease can make a big difference in affordability, potentially saving buyers thousands over the life of a loan.

If you’re in the market to buy, this drop provides an excellent window of opportunity. Lower rates increase purchasing power, meaning you might be able to afford more home than you thought just a few months ago.

For sellers, this is good news too. Lower mortgage rates often bring more buyers to the market, keeping demand steady even as inventory rises.

Buyers vs. Sellers Market

So, is it a buyer’s or seller’s market in Houston this September?

The truth is, it’s a bit of both. Rising inventory suggests that buyers have more options and slightly more negotiating power than they did earlier this year. However, prices are still on the rise, and with mortgage rates dropping, sellers are in a good position to attract motivated buyers.

If you’re a buyer, you can take advantage of the increased inventory and lower mortgage rates to find a home that fits your needs without as much urgency as in previous months. If you’re a seller, the steady demand and competitive prices mean it’s still a great time to list—just be prepared for buyers to have more leverage as inventory increases.

Advice for Buyers

Act Soon, But Don’t Rush: With mortgage rates at 6.12%, now is a great time to lock in a lower rate before they potentially rise again. However, with inventory up, you have more room to explore your options—so don’t feel pressured to buy the first home you see.
Focus on Value: The median price hasn’t moved, which means there are still great deals to be had. Don’t overpay just because the market is competitive; look for homes that offer long-term value, not just curb appeal.
Negotiate on Price: With more homes on the market, sellers may be more willing to negotiate on price or offer concessions like covering closing costs. Use this to your advantage when making offers.

Advice for Sellers

Price Strategically: While the average sales price is up, buyers are becoming more selective, thanks to the rising inventory. Pricing your home too high might scare off potential buyers, especially with more homes to choose from.
Market Your Home’s Strengths: Buyers are looking for value, so make sure your home’s best features—whether it’s a recent renovation, location, or unique selling points—are highlighted in your listing.
Be Ready to Negotiate: With inventory rising, buyers will have more bargaining power. Be flexible and willing to make reasonable compromises to close the deal.

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