Single-family home sales for 2022 were down 10.9% compared to 2021’s record pace, marking the first year that Houston housing has been in the red since 2015. Despite the sales slowdown, prices reaching new highs in the $400,000s kept 2022’s total dollar volume close to last year’s record level.

According to the December/Full-Year 2022 Housing Market Update from the Houston Association of Realtors (HAR), sales of all property types totaled 117,572, down 10.7% from 2021. Total dollar volume dropped just 1.5% to $39.3 billion, compared to $40 billion in 2021.

“While disappointing, it was no surprise that 2022 ended the way it did given the economic forces that affected the market during the latter half of the year, most notably inflation, mortgage rates, and persistently low inventory,” said HAR Chair Cathy Treviño with Side, Inc.

Despite the negative impact of these factors, there are some positive signs for the market going forward. Inventory levels have been improving, with a measurable boost from an uptick in new listings. This pushed inventory levels past the 2.0-months supply level for the first time in two years, reaching a 2.7-months supply in December. Additionally, mortgage rates have been easing, which should help to make homebuying more affordable for consumers.

For consumers looking to buy a home in the Houston area, the current market conditions mean that they will likely face more competition and higher prices, but there are also opportunities to find deals as well. With the market expected to return to healthier levels later in the year, buyers may want to consider waiting until later in the year to enter the market. Additionally, buyers should be prepared to act quickly when a good opportunity arises, as competition for available homes is likely to be fierce.

Overall, the Houston real estate market experienced a slowdown in 2022 due to economic headwinds, but there are signs that the market is starting to recover. As the year progresses, buyers should expect to face more competition and higher prices, but also more opportunities to find good deals. With inventory levels improving, mortgage rates easing, and prices moderating, buyers may want to consider waiting until later in the year to enter the market. With this in mind, it’s important for buyers to be prepared, be flexible, and have a clear understanding of their budget and what they’re looking for in a home.