The complete set of market data for the Houston housing market was released today by the Association of Realtors. As I had anticipated, the first declines in both the median home sale price and the average home sale price were realized. After delving through historical data, the drop is at least in part thanks to the seasonal nature of Houston real estate. However, a good portion of the reduced activity and price reductions seen can be blamed at least in part on the market turmoil and perceptions of possible trouble in the near future. The one wild card that is difficult to compute, without being able to use the aggregate square footage of the homes sold during the period, is how much of the drop in the average and median home sale price is simply due to a massive drop in the number of luxury homes sold. Drops in the number of expensive homes tend to heavily influence the accuracy of the median and average home sale price as an indicator of appreciation rates. And we have had a large change in the number of sales realized in the high end luxury market; thanks to difficulties in obtaining a jumbo mortgage (a jumbo mortgage is a loan that exceeds $417,000). This drop in high-end home sales has been very apparent from the monthly inventory reports over the last two months. Below you will find the complete report released by the Houston Association of Realtors.
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The ailing U.S. economy sent ripples across the greater Houston area in November as fewer properties were bought and sold versus one year earlier. According to new monthly data compiled by the Houston Association of REALTORS® (HAR), overall property sales fell 33.7 percent last month when compared to November 2007, with sales of single-family homes down 31.7 percent. Rental properties remained in demand for the month, with leases of single-family homes up 16.0 percent and townhouses/condominiums up 2.8 percent on a year-over-year basis. The average price of a single-family home dropped 7.0 percent last month to $187,766 from $201,862 in November 2007. At $137,500, the median price of a single-family home in November fell 7.7 percent year-over-year. The median price represents the figure at which half of the homes sold for more and half sold for less. However, on a year-to-date basis, home prices are 2.0 percent above 2007 levels, continuing to place Houston on more solid footing than markets throughout California, Florida and Nevada that have experienced double-digit home depreciation since the housing market downturn began more than a year ago. Sales of all property types in Houston for November 2008 totaled 3,906, off 33.7 percent compared to November 2007. Total dollar volume for properties sold during the month was $719 million versus $1.1 billion one year earlier, a 37.4 percent decline. “These are some of the toughest economic times our country has ever experienced, and Houston consumers are understandably cautious as they absorb news about layoffs, declining oil prices and other negative financial reports,” said Michael Levitin, HAR chairman and principal of HTownRealty.com. “Many are opting to rent property for the time being.” During a late November stop in Houston, National Association of REALTORS® Chief Economist Lawrence Yun praised the stability of Houston home prices and predicted that Houston and Denver would be the nation’s top performers in 2009. Yun forecast at least a five percent increase in Houston home pricing, also noting that local month’s inventory has held around six months while the national rate has been approximately 10 months, another positive indicator. He stated that despite weakness in the oil patch, overall local job growth would help Houston maintain its healthier performance relative to the nation. “We are encouraged by Dr. Yun’s outlook for our market and hope that as Congress and the Obama administration iron out details of the federal financial bailout plan, local consumers realize that 2009 promises to be a sound time to buy or sell a home in Houston,” added Levitin. November Monthly Market Comparison The number of available properties, or active listings, at the end of November fell 9.3 percent from November 2007 to 47,354. That’s 1,662 fewer active listings than October 2008, and is seen as an indication that inventory levels are balanced and that home prices should remain stable. Month-end pending sales – those listings expected to close within the next 30 days – totaled 3,144, which was 24.4 percent lower than last year and suggests another likely sales decline next month. The month’s inventory of single-family homes for November came in at 6.1 months, unchanged from one year earlier and the lowest level since February of this year. |
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| * Months inventory estimates the number of months it will take to deplete current active inventory based on the prior 12 months sales activity. This figure is representative of the single-family homes market. | ||||||||||||||||||||||||||||||||
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Single-Family Homes Update At $187,766, the average sales price for single-family homes dropped 7.0 percent from November 2007 when it was $201,862. The median price of single-family homes in November was $137,500, off 7.7 percent from one year earlier. That compares to the national single-family median price of $181,800 reported by the National Association of REALTORS®. These data continue to demonstrate the higher value and lower cost of living that prevail in the Houston market.  Single Family Median And Average Home Sale Price
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Additionally, total November sales of single-family homes in Houston came in at 3,401, down 31.7 percent from November 2007 and the fifteenth straight monthly drop.
Monthly Single Family Homes Sales
HAR also reports existing home statistics for the single-family home segment of the real estate market. In November 2008, existing single-family home sales totaled 2,833, a 28.3 percent decrease from November 2007. At $164,694, the average sales price for existing homes in the Houston area fell 12.1 percent compared to last year. The median sales price of $125,200 for the month was also down 8.7 percent from one year earlier.
Townhouse/Condo Update
The number of townhouses and condominiums sold in October fell compared to one year earlier. In the greater Houston area, 421 units were sold last month versus 534 properties in October 2007, translating to a 21.2 percent decrease in year-over-year sales.
Townhome And Condominium Sales
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The average price of a townhouse/condominium dipped to $155,235, down 4.2 percent from one year earlier. The median price fell 9.8 percent to $118,250 from November 2007 to 2008. Lease Property Update Demand for single-family and townhouse/condominium rentals increased again in November. Single-family home rentals rose 16.0 percent in November compared to a year earlier, while year-over-year townhouse/condominium rentals were up 2.8 percent. Houston Real Estate Milestones in November Lowest month’s inventory of single-family homes since February 2008 (6.1 months); Fewest active listings since December 2006 (30,167). |
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| The computerized Multiple Listing Service of the Houston Association of Realtors® includes residential properties and new homes listed by 26,000 Realtors throughout Harris, Fort Bend and Montgomery counties, as well as parts of Brazoria, Galveston, Waller and Wharton counties. Residential home sales statistics as well as listing information for more than 53,000 properties may be found on the Internet at http://www.har.com.The information published and disseminated to the HAR Multiple Listing Services is communicated verbatim, without change by Multiple Listing Services, as filed by MLS participants.
The MLS does not verify the information provided and disclaims any responsibility for its accuracy. All data is preliminary and subject to change. Monthly sales figures reported since November 1998 includes a statistical estimation to account for late entries. Twelve-month totals may vary from actual end-of-year figures. (Single-family detached homes were broken out separately in monthly figures beginning February 1988.) |
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December 22nd, 2008 at 11:35 pm
The rental market is taking off here in the Dallas-Fort Worth area. I just wonder what the low oil prices will do to your and my market in the near future
December 24th, 2008 at 7:34 am
@Mike Pannell: I agree Mike if oil stays under $40 a barrel for very long we will see layoffs in both of our markets.