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Lower Oil Prices Take A Toll On Houston-Area Home Sales

Demand for higher-end homes is falling, while more affordable units remain in short supply.

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There’s an update to this story: The HAR is revising its numbers for home sales sharply downward for the year ending in January. Please see this updated story for the correction and explanation here

Houston-area home sales continued to rise overall in January, according to the Houston Association of Realtors. But there are indications that the market is beginning to turn in the wake of lower oil prices and a persistently tight housing supply.

Single family home sales totaled 4,032 units in January, up 6.1 percent compared to a year ago. By contrast, sales of townhomes and condominiums tumbled 20 percent over the same time period.

Shad Bogany, past chairman of the Texas Association of Realtors, says sales of the most-expensive condos and townhomes are taking the biggest hit. “If you think about it,” Bogany says, “the most predominant, vigorous part of the market has been that higher-end market, and a lot of that has to do with the oil business. And with that slowing down, those people may not be purchasing as expensive homes as they’ve done in the past.”

That appears to be the case with single-family homes as well. The majority of January sales took place among homes priced between $250,000 and $500,000. The pace of sales slowed significantly among homes priced above $500,000.

The flip side is that there is still a shortage of more-affordable housing. That holds for townhomes and condos, as well as single-family homes. The region’s housing inventory registered 2.6 months in January — a slight improvement from December, but a bit tighter than January of last year. Inventory is a rough measure of how long it would take to sell out the entire listed supply of housing. The current national supply comes to 4.4 months of inventory.

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Andrew Schneider

Andrew Schneider

Politics and Government Reporter

Andrew Schneider is the senior reporter for politics and government at Houston Public Media, NPR's affiliate station in Houston, Texas. In this capacity, he heads the station's coverage of national, state, and local elections. He also reports on major policy issues before the Texas Legislature and county and city governments...

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