Yesterday, the HAR (Houston Association of Realtors) complete Houston housing market report was released. I have found HAR’s discussion and explanation of the Houston housing numbers for February to be less than adequate. It over-expressed foreclosures’ roles in the recent trend of drops in the median and average home sale prices. Foreclosures have played a role in this new trend, but from following the inventory report as of recent here on the Houston housing market blog, it is obvious that there has been a huge fall off in sales in the high end portion of the market place along with notable price reductions on those high end homes that have closed. The weakening of the Houston luxury home market has been at least as large of a culprit in the recent drops in the median and average home sale price, if not the ring leader. This has left me a bit disappointed in HAR’s release to the public. In the end, what we are seeing here in Houston is a situation where the majority of the market place is stable but then has the luxury market in a deep buyers market with excessive inventory that will continue to see softening until we have a run off the excess in the inventory. In other words, the Houston luxury market is in nearly as much trouble as the National situation, but homes under $700,000 are merely seeing a slowdown caused by credit troubles at the National level.
In addition to this, I recently took the time to watch the NAR (National Association of Realtors) president’s podcast covering the expected impacts of the recently implemented stimulus bill. I felt like it painted an overly positive picture of the effects we would see from the stimulus bill. The stimulus bill will likely only have a small impact on the market place and will not be its savor. I would have much rather have seen the government offer loans in the 4-4.5% range. Most households are experiencing troubles with being over-stretched by their monthly obligations. By reducing the interest rates, this would allow for assistance not only to new purchasers of homes, but also to every other household that is creditworthy. The reduction in these household’s monthly obligations would make more money available for saving and discretionary-spending. Increases in savings would assist in thawing the current freeze on the credit markets, and the additional funds for households to spend would cause a stimulus to the overall economy. In the end, if we want to make our way out of these troubling times, it will have to be through stabilizing the housing market and increasing demand for housing. Far too many of our manufacturing and service positions have been sent overseas. This means that housing is a huge portion of today’s U.S. job market. Whether it be construction jobs, shipping jobs, or even a large portion of the manufacturing positions that remain are tied in part to housing, and then you top this off with all the job losses that have been seen in supporting fields to the housing market.
I have included the official February 2009 HAR report below:
February marked another month of sagging real estate sales and pricing for the greater Houston area, following to a milder degree the trends that have played out around the country since the recession began more than a year ago. Overall February property sales fell 25.9 percent compared to February 2008, and sales of single-family homes declined by 24.6 percent, according to new monthly data prepared by the Houston Association of REALTORS® (HAR).
The average price of a single-family home in Houston dropped 10.5 percent last month to $182,316 compared to February 2008. At $138,970, the February single-family home median price – the figure at which half of the homes sold for more and half sold for less – fell 8.0 percent year-over-year. February marked the fifth consecutive month of price declines.
Sales of foreclosure properties, which typically sell below market prices, continued to place a drag on home prices last month. In February 2009, foreclosures made up 28.0 percent of all single-family home sales in the Houston area compared to 22.6 percent one year earlier. However that is an improvement from January’s 34.0 percent share of single-family homes sales consisting of foreclosures. Part of that is attributed to a 23.0 percent month-over-month increase in overall property sales.
The median price of foreclosure sales reported in the MLS tumbled 15.0 percent from $94,000 to $79,900 on a year-over-year basis. The median price of traditional, non-foreclosure single-family homes dropped just 1.2 percent from $167,000 to $165,000.
Sales of all property types in Houston for January totaled 3,995, off 25.9 percent compared to February 2008. Total dollar volume for properties sold during the month was $710 million versus $1.0 billion one year earlier, a 33.4 percent decline.
Demand for rental properties rose again in February, with leases of single-family homes up 4.3 percent on a year-over-year basis and leases of high rise units up 192.0 percent. The latter figure tends to be more variable because of the comparatively small number of units involved.
“Rentals remain a very attractive option for would-be home buyers throughout the Houston area who may be reluctant or unable to commit to the purchase of a home at this time,” said Vicki Fullerton, HAR chair and broker of record at RE/MAX of The Woodlands & Spring. “Consumers want to see signs that economic recovery is taking hold, and despite the recent progress made in Washington, we know that’s not going to happen overnight.”
February Monthly Market Comparison
The month of February brought Houston’s overall housing market negative results when all listing categories are compared to February of 2008. Total property sales and total dollar volume fell, as did average and median single-family home sales prices.
However, the number of available properties, or active listings, at the end of February fell 12.8 percent from February 2008 to 44,747. That is 569 more active listings than January 2009 and considered an indication that inventory levels remain balanced.
Month-end pending sales – those listings expected to close within the next 30 days – totaled 3,227, which was 25.4 percent lower than last year and suggests the likelihood of a further decline in sales for March. The month’s inventory of single-family homes for February came in at 5.9 months, down 2.8 percent from one year earlier. The national month’s inventory of single-family homes is approximately 10 months, according to the National Association of REALTORS® (NAR).
CATEGORIES February 2008 February 2009 PERCENT CHANGE
Total property sales 5,388 3,995 -25.9%
Total dollar volume $1,065,425,047 $709,907,442 -33.4%
Average single-family sales price $203,797 $182,316 -10.5%
Median single-family sales price $151,000 $138,970 -8.0%
Total active listings 51,308 44,747 -12.8%
Total pending sales 4,323 3,227 -25.4%
Months inventory* 6.1 5.9 -2.8%
* 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.
Single-Family Homes Update
At $182,316, the average sales price for single-family homes dropped 10.5 percent from February 2008, when it was $203,797. However, the figure is up $18,000 from January of this year. The median price of single-family homes in February was $138,970, off 8.0 percent from one year earlier, but up about $10,000 from January. The national single-family median price reported by NAR is $169,900, illustrating the continued higher value and lower cost of living that prevail in the Houston market.
February sales of single-family homes in Houston totaled 3,424, down 24.6 percent from February 2008 and accounting for the 18th consecutive monthly drop. Year-over-year sales of single-family homes priced at $80,000 and below rose 35.4 percent in February, largely the result of foreclosure-related transactions.
HAR also reports existing home statistics for the single-family home segment of the real estate market. In February 2009, existing single-family home sales totaled 2,829, a 22.9 percent decrease from February 2008. At $165,897, the average sales price for existing homes in the Houston area fell 11.6 percent compared to last year. The median sales price of $128,000 for the month was also down 8.5 percent from one year earlier.
Townhouse/Condo Update
The number of townhouses and condominiums sold in February fell compared to one year earlier. In the greater Houston area, 305 units were sold last month versus 448 properties in February 2008, translating to a 31.9 percent decrease in year-over-year sales.
The average price of a townhouse/condominium dropped to $149,498, down 7.8 percent from one year earlier. The median price dipped 5.9 percent to $122,300 from February 2008 to February 2009.
Lease Property Update
Demand for single-family rentals increased again in February. Single-family home rentals rose 4.3 percent in February compared to a year earlier. While year-over-year townhouse/condominium rentals declined 7.0 percent, rentals of high rise properties jumped by 192.0 percent. The latter figure has a tendency to be more variable because of the comparatively small number of transactions in that housing category.
Houston Real Estate Milestones in February
Sales of single-family homes priced at or below $80,000 jumped 35.4 percent, driven largely by foreclosure activity;
Single-family home rentals rose 4.3 percent;
Rentals of high rise units increased 192.0 percent;
Month’s inventory of single-family homes fell from 6.1 to 5.7 months, remaining just above half the national average of approximately 10 months;
Active listings fell 12.8 percent, representing a generally balanced supply of housing inventory.
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.)
