Houston Housing Market

The overall Houston housing market inventory is up to 6.2 months from 6.0 months, which may be partially because of the seasonal uptick seen in inventory levels just before the market moves into the selling season. However, I feel that the increase is more correlated to continued acceleration in the Houston housing inventory for the luxury home market. We saw a substantial jump in the inventory level of homes above the $700,000 price point which was fueled by a decline in home sales and an increase in active listings. We also saw inventory levels for the $300,000-$700,000 price point exceed 9 months, which suggests that we may see price declines in that market as well. Despite the negative news for the high end market, the below $300,000 price point continues to remain stable and the under $80,000 market continues to become an even stronger sellers’ market.

Total Breakdown of Activity For The Houston Housing Market

As of April 7, 2009, the $80,000 and below price point had just 3.5 months of inventory, down from the 3.6 months of inventory posted last month. This was coupled with an increase in total sales for the price range and the total number of active listings declined for the period. This pattern has been continual over the last four months and with oil having made its way back to the high 40s and low 50s, there does not seem to be a good reason for it to change.
The $80,000 to $150,000 price range saw a small uptick in housing inventory, posting 5.1 months of inventory as of April 7th 2009, up from 5.0 noted last month. With a nearly equal number of sales in comparison to last month, I would say that this small increase in inventory is due to the listing totals ramping up for the selling season. In addition, 5.1 months of inventory is nearing the inventory levels seen during a sellers’ market.
Inventory for the $150,000 to $300,000 price range was up again this month posting 6.2 months of inventory in comparison to the 6,0 months of inventory seen last month. Again, we only saw a slight reduction in total sales in comparison to last month, so it is very likely that this increase in inventory is due to the seasonal increase in homes for sale. We will know whether this is the case by June, as we should see it flatten out or move down once households make their move while school is out. All in all, even 6.2 months of inventory shows a rather stable market place and is a major improvement over the 10.8 months of inventory recorded for the national average.
Now the Houston housing inventory for the $300,000 to $700,000 was up a great deal, and it posted 133% of the increase seen last month. This price range posted 9.3 months of inventory up from the 8.5 months of inventory seen last month. Inventory levels having moved above the 9 month mark and the inventory increase showing a continued acceleration leads me to call a major buyers’ market, where we will likely see a drop in price for this portion of the Houston housing market. The fact that this increase was in excess of that seen last month and it moved us into an inventory range where most markets have had price declines when reached in the past leads me to believe that it could not have been simply a seasonal increase in inventory.
The $700,000 and above price range had another huge increase in inventory and saw both total sales decrease and total active listings increase. The inventory for this price range came in at 18.8 months, up more than two months from the 16.7 months posted last month. Just like the $300,000 to $700,000 price range, the $700,000 price point has seen accelerating increases in inventory, however, the situation is graver for this price range since it was already sitting in a range where markets tend to post declines in pricing. This trend is reinforced both by the average price of homes sold in this price range and the average list price of new homes being less than what was posted last month. Without a doubt, over the last couple of months we have seen a drop in value for this end of the market place, and I do not expect it to change any time in the immediate future.

Houston Homes Market Breakdown For 80,000 And Below

Houston Homes Market Breakdown For 80,000-150,000 Price Range

Houston Homes Market Breakdown For 150,000-300,000 Price Range

Houston Homes Market Breakdown For 300,000-700,000 Price Range

Houston Homes Market Breakdown For 700,000 And Above

In many ways, this month’s inventory report was nothing more than a repeat of the trends that were set back in January. We have a stable market below the $300,000 price point including a very hot market place for homes priced below $80,000. Then we see continued accelerating weakness in the luxury market suggesting more declines in valuation for the luxury market in the near future. Here in Houston, it truly is a tale of two markets. As I said last month, a stable or strong market place in the lower price ranges and a soft real estate market in the higher price ranges brings excellent opportunities for those home owners that are looking to make a move up to a larger home. Add to this market segregation very low interest rates and you have one of the very best markets for someone to make a move into a larger home than we will likely see in a long time. Another group of buyers that a purchase makes sense for is first time home buyers. First time home buyers have a great opportunity to make a purchase with very low interest rates that flirt with the lowest ever posted, and the federal government has implemented an $8,000 tax credit. So, if you are a first time home buyer or a move up buyer, it makes sense for you to make a purchase in this market. Now if you are looking to downsize, it is best that you do not do so in the current market place unless you are willing to take a hit on your bottom line, or you have to sell for financial reasons.

Information contained in this post was acquired from the Houston Association of Realtors via the multiple listing service database and archive. Data should be considered reliable, but is not guaranteed to be accurate.

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This entry was posted on Thursday, April 9th, 2009 at 10:52 am and is filed under Houston Housing Market. You can follow any responses to this entry through the RSS 2.0 feed. You can skip to the end and leave a response. Pinging is currently not allowed.