July 2020 vaulted Houston real estate into the record books. August 2020 proved to be a similarly healthy month for home sales despite the lingering coronavirus pandemic. However, with a decline in the number of new listings coming on the market, inventory has now fallen to its lowest level in five years, officially setting the stage for moderating sales in the weeks ahead--despite historically low interest rates. ALL SIGNS POINT TO UP (except one) The chart above, provided by the Houston Association of Realtors, shows the year-on-year changes (from Aug 2019 to Aug 2020) in several important housing categories. Total property sales – up. Total dollar volume – up. Single family home sales – up. Average and median sales price – up, up! In fact, the only thing in not up is the number of total active listings. And those are way down. We have been saying for months that low inventory has a tremendous effect on both buyers and sellers. Let’s recap: If you’re a buyer in a low inventory market, you will likely experience frustratingly few options in your price point, and more competition from other buyers for those same relative few houses. When making an offer, you should be prepared to act quickly because if you don’t, you may lose out to someone who does. If you’re a seller in a low inventory market, and assuming your home is in good condition, is in a desirable location, and/or has features popular to today’s buyers, you should be prepared for lower days than normal on market, lots of interest and showings, and possibly even multiple offers. BOTTOM LINE Of course, consumers still benefit from record low interest rates – but, and unfortunately -- reduced inventory just doesn’t afford them many housing options. The dwindling supply of homes coming on market will likely result in sales prices and volume returning to a more "normal" pace throughout the fall.