2021 vs 2016 Housing Market Comparison Shows Striking Difference

Anyone entering today’s real estate market — either as a buyer, seller or agent — might think that generous offers over the asking price, 10 or more showings a day and very limited inventory is the norm.

A look back just five years ago paints a very different story.

According to the most recent Houston Association of Realtors (HAR) report, 9,702 units were sold this past May (a 48.2 percent increase), the average sales price rose 29.7 percent to $387,105 and sales of all property types totaled 12,100 for a total dollar volume of $4.4 billion — an increase of 100.5 percent compared to last year.

Add in the offers that are tens of thousands of dollars over asking price, and you get a clearer picture of today’s housing market. (Other Texas markets are even more competitive — homes in West Plano in the Dallas-Fort Worth area are selling for up to $120,000 over the listing amount. For comparison, just in January, modestly sized homes were selling for about $5,000 over asking price. In Austin, $100,000+ over asking is the norm, with about 1,500 homes selling for more than $100,000 over list price during the first five months of the year.)

Going back to HAR, 2020 saw a 20.2 percent drop in single-family home sales, with experts pointing a finger at the pandemic for the likely reason. The average home price in Houston stood at $298,199.

A look at HAR reports from 2016-2019 gives a more accurate snapshot of typical trends. Year-over-year sales climbed anywhere from 1 to 10 percent and the average home price was either stagnant or rose up to 4.4 percent. In 2016, sales of all property types in May totaled 8,703 for a total dollar volume of $2.4 billion. And while our months of inventory stands at 1.4 today, May 2017 reported 4.1 months of inventory, which was the highest in nearly five years at that time.

The chart below illustrates how 2021 differs from the prior five years:

The big question is will this market continue? While no one can really know for sure, right now many experts are suggesting that the market is not going to go down, but it will cool. Of course, that’s on a national level — we all know that Texas usually follows its own path, especially with so many people moving here from other parts of the country.