Houston Housing Market

Lately the national real estate market has been getting a lot of positive press as things in many of the markets covered by the Case-Shiller index have turned around and shown small increases in appreciation. Even though the Houston housing market is not included in the Case-Shiller index this press will likely have positive impact on the Houston market. In many markets it looks as though the lower price points have reversed course and properties are seeing multiple offers. Both of the founders of the Case-Shiller index have been quoted recently discussing the likelyhood that the real estate market has found a bottom.

“My guess would be that home prices are going to level off — they’re not going to keep falling,” Shiller said in a separate interview with Bloomberg Television. Still, it’s “hard to predict” a speculative market, and “I am not optimistic that we’re going to see any sharp rebound.”

“These numbers are really showing that there’s been a change in mood,” said Karl Case, a professor at Wellesley College and another co-founder of the index. “For these numbers to go up in eight states, I was quite taken aback.”

Shiller is infamous when it comes to the accuracy that he has been able to predict the direction and at times the extent of the real estate markets appreciation rates. In his Bloomberg interview he noted that he is skeptical that we will see a strong rebound in home pricing and I am for one in whole hearted agreement. I feel like by next spring if not sooner the overall economy will begin to expand once again but that the recovery will be very anemic. My rationale for this is simply the high levels of unemployment across the country. I believe it will take some time for us to absorb the levels of unemployment we currently have and I expect it to creep slightly higher over the next couple of months. With this being the case I cannot see how the debt ladened American consumer will be able to flood back into the market place and not only absorb the high levels of inventory but also stir up a frouth of rapid appreciation.

Not only do I doubt we will see aggressive price appreciation I also would not be surprised if the Case-Shiller index turned South again over this winter. Now I do not expect that this will be across the boards but driven by price drops in the luxury market. From conversations I have had with agents in other markets and statements made by agents on this blog the entire country has just far too much luxury home inventory. I cannot see how this inventory level will continue to exist without price drops. If you have been following the blog here you likely already know that the Houston housing market is most definitively a tale of two markets. We never really had any issues with price declines within the FHA loan maximum (FHA loan max for the Houston housing market is $271,050). In fact inventory throughout the entire down turn in the economy has stayed at a very reasonable and stable level. However, our luxury market started to turn South in a hurry around the end of the summer in 2008. Inventory ballooned at a rapid rate and in many luxury areas we have seen price declines.

HAR recently released data for the entire Houston real estate market and many indicators looked promising for a return to strength, however they continue to neglect the troubles the luxury market is experiencing and choose to plug only the positives. Even with the curbing of the drop in total sales volume throughout the Houston metro area we are still seeing the number of active listings increase over the past 3 months despite it being the peak selling season. The good news is despite the increased number of listings and the excessive inventory in the luxury market overall inventory levels have not gotten worse.

Houston Homes Market Breakdown For 80,000 And Below

May 8^th 2009

Months of Inventory	Sold Data – Prev. 1 Year		Current Active Data
	Number Sold	Average Price	Number Active	Average Price
3.3	7,731	$54,040	2,131	$60,944

 

July 8^th 2009 

Months of Inventory	Sold Data – Prev. 1 Year		Current Active Data
	Number Sold	Average Price	Number Active	Average Price
3.3	7,587	$54,009	2,057	$61,387

 

August 24^th 2009

Months of Inventory	Sold Data – Prev. 1 Year		Current Active Data
	Number Sold	Average Price	Number Active	Average Price
3.6	7,579	$53,926	2,275	$60,813

 

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

May 8^th 2009

Months of Inventory	Sold Data – Prev. 1 Year		Current Active Data
	Number Sold	Average Price	Number Active	Average Price
5.0	18,437	$114,812	7,723	$118,528

 

July 8^th 2009

Months of Inventory	Sold Data – Prev. 1 Year		Current Active Data
	Number Sold	Average Price	Number Active	Average Price
5.4	17,635	$114,768	8,003	$118,365

 

August 24^th 2009 

Months of Inventory	Sold Data – Prev. 1 Year		Current Active Data
	Number Sold	Average Price	Number Active	Average Price
5.7	17,340	$114,840	8,207	$118,140

 

 

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

May 8^th 2009

Months of Inventory	Sold Data – Prev. 1 Year		Current Active Data
	Number Sold	Average Price	Number Active	Average Price
6.2	18,910	$200,369	9,825	$214,009

 

July 8^th 2009

Months of Inventory	Sold Data – Prev. 1 Year		Current Active Data
	Number Sold	Average Price	Number Active	Average Price
6.6	18,284	$200,837	10,040	$214,716

 

August 24^th 2009

Months of Inventory	Sold Data – Prev. 1 Year		Current Active Data
	Number Sold	Average Price	Number Active	Average Price
6.6	18,162	$201,034	10,057	$214,894

 

 

Houston Homes Market Breakdown For 300,000-500,000 Price Range

May 8^th 2009

Months of Inventory	Sold Data – Prev. 1 Year		Current Active Data
	Number Sold	Average Price	Number Active	Average Price
8.6	6,067	$361,370	4,352	$388,742

 

July 8^th 2009

Months of Inventory	Sold Data – Prev. 1 Year		Current Active Data
	Number Sold	Average Price	Number Active	Average Price
9.1	5,758	$360,046	4,349	$388,686

 

August 24^th 2009

Months of Inventory	Sold Data – Prev. 1 Year		Current Active Data
	Number Sold	Average Price	Number Active	Average Price
8.9	5,704	$359,074	4,239	$388,862

 

 

Houston Homes Market Breakdown For 500,000-700,000 Price Range

May 8^th 2009

Months of Inventory	Sold Data – Prev. 1 Year		Current Active Data
	Number Sold	Average Price	Number Active	Average Price
12.8	1,538	$560,614	1,635	$600,202

 

July 8^th 2009

Months of Inventory	Sold Data – Prev. 1 Year		Current Active Data
	Number Sold	Average Price	Number Active	Average Price
12.5	1,486	$557,866	1,551	$599,454

 

August 24^th 2009

Months of Inventory	Sold Data – Prev. 1 Year		Current Active Data
	Number Sold	Average Price	Number Active	Average Price
12.5	1,444	$556,409	1,510	$598,770

 

 

Houston Homes Market Breakdown For 700,000 And Above

May 8^th 2009

Months of Inventory	Sold Data – Prev. 1 Year		Current Active Data
	Number Sold	Average Price	Number Active	Average Price
19.4	1,435	$1,162,407	2,315	$1,383,125

 

July 8^th 2009

Months of Inventory	Sold Data – Prev. 1 Year		Current Active Data
	Number Sold	Average Price	Number Active	Average Price
20.5	1,345	$1,143,808	2,297	$1,400,177

 

August 24^th 2009

Months of Inventory	Sold Data – Prev. 1 Year		Current Active Data
	Number Sold	Average Price	Number Active	Average Price
20.3	1,317	$1,106,389	2,223	$1,418,827

In conclusion I believe that the majority of the country’s real estate markets have seen the bottom reach on homes priced within the FHA loan limits. But, I still feel that the jury is out as to how long it will be before we will see the same stabilization in the luxury market. It is my assumption that the luxury market was far over built thanks to the excessively easy credit we saw during the boom times. Many of the homes that were purchased should never have been built. This fact still leaves some sestemic risk to the rest of the market as price declines in the luxury market will assure at minimum that homes within the FHA loan limits will have a price cieling. Therefore holding off in this market is not likely to cause you to pay a substantial amount more for a home in terms of price. However, I expect with all of the liquidity that every federal bank has pumped into the market place will cause interest rates to rise when the economy turns around. This can leave those that must finance a property paying significantly more for holding costs of a property. If you would like to read the HAR numbers the press release is posted below.

HAR Official Real Estate Market Report For July 2009:

Seasonal summer home buying and continued activity among first-time homebuyers translated to a significant improvement in single-family home sales across greater Houston in July, with the highest volume since July 2008 and the second highest median price in history. This comes despite year-over-year declines in overall property sales of 5.1 percent and 4.4 percent for single-family homes, according to new monthly data compiled by the Houston Association of REALTORS® (HAR). However, those declines are the smallest recorded since the economic downturn began in the fall of 2007.At $163,000, the July single-family home median price—the figure at which half of the homes sold for more and half sold for less—rose 1.5 percent from one year earlier to the second highest price ever. The highest median of all time, $164,500, was reached in June 2009. The average price of a single-family home in Houston dipped 1.8 percent last month to $220,030 compared to July 2008. That represents the second highest average price since August 2008.Foreclosure property sales continued to slow in July, making up 16.6 percent of all single-family home sales in the Houston area compared to 18.0 percent in July 2008 and 34.0 percent in January of this year. The median price of July foreclosure sales reported in the Multiple Listing Service (MLS) declined 2.8 percent from $92,664 to $90,000 on a year-over-year basis.Sales of all property types in Houston for July totaled 6,744, off 5.1 percent compared to July 2008. Total dollar volume for properties sold during the month was $1.4 billion versus $1.5 billion one year earlier, representing a decline of 6.2 percent—the smallest since November 2007.“Strong pricing performance, an easing decline in sales volume and the slowdown of foreclosure sales make for very positive indicators about the state of Houston’s real estate market,” said Vicki Fullerton, HAR chair and broker of record at RE/MAX of The Woodlands & Spring. “We look forward to further improvement as the tax credit incentive, historically low interest rates and an attractive variety of housing inventory continue to draw buyers to the marketplace.”July Monthly Market Comparison The month of July brought Houston’s overall housing market mixed results when all listing categories are compared to July of 2008. Total property sales, total dollar volume and average single-family home sales prices were down on a year-over-year basis while median single-family home sales prices rose to the second highest level ever. The number of available properties, or active listings, at the end of July fell 13.4 percent from July 2008 to 46,598. That is 609 more active listings than one month earlier, in June 2009, and continues to reflect balanced housing inventory levels. Month-end pending sales—those listings expected to close within the next 30 days—totaled 3,909, which was 17.8 percent lower than last year and portends another decline in sales when the August numbers are tallied. The month’s inventory of single-family homes for July came in at 6.5 months, down from 6.7 months one year earlier. The national month’s inventory of single-family homes fell slightly to 9.4 months, according to the National Association of REALTORS® (NAR).

CATEGORIES JULY 2008 JULY 2009 PERCENT CHANGE Total property sales 7,108 6,744 -5.1% Total dollar volume $1,532,595,492 $1,437,300,889 -6.2% Average single-family sales price $224,104 $220,030 -1.8% Median single-family sales price $160,550 $163,000 1.5% Total active listings 53,779 46,598 -13.4% Total pending sales 4,758 3,909 -17.8% Months inventory* 6.7 6.5 -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 UpdateAt $163,000, the median sales price for single-family homes reached the second highest level ever, up 1.5 percent from July 2008, when it was $160,550. The national single-family median price reported by NAR is $181,600, illustrating the continued higher value and lower cost of living that the Houston market offers consumers. The average price of single-family homes in July was $220,030, slipping 1.8 percent from one year earlier.

July sales of single-family homes in Houston totaled 5,788, down 4.4 percent from July 2008, and accounted for the 23rd consecutive monthly drop. However, that volume is the highest since July 2008, and the 4.4 percent decline is the smallest fluctuation since the market downturn started in late 2007. Year-over-year sales of single-family homes priced between $150,000 and $250,000—the second busiest segment of the housing market—rose 1.2 percent in July.

HAR also reports existing home statistics for the single-family home segment of the real estate market. In July 2009, existing single-family home sales totaled 4,928, a 2.5 percent decrease from July 2008. At $155,000, the median sales price for existing homes in the Houston area rose 3.3 percent compared to last year. The average sales price of $206,401 for the month was flat compared to one year earlier.

 

Townhouse/Condo Update

The number of townhouses and condominiums sold in July fell compared to one year earlier. In the greater Houston area, 550 units were sold last month versus 586 properties in July 2008, translating to a 6.1 percent decrease in year-over-year sales. However, that still represents the highest sales volume since August 2008.

 

The median price of a townhouse/condominium dipped 1.5 percent year-over-year to $133,000. The average price rose 2.6 percent to $169,838 from July 2008 to July 2009.

Lease Property UpdateDemand for single-family home rentals rose slightly in July, up 6.7 percent compared to a year earlier. Year-over-year townhouse/condominium rentals were unchanged. Houston Real Estate Milestones in July At $163,000, the median price of a single-family home was the second highest of all time; Sales of single-family homes priced between $150,000 and $250,000—the second busiest segment of the housing market—rose     1.2 percent; Volume of single-family home sales reached the highest level since July 2008; Volume of single-family home sales reached the highest level since August 2008; Month’s inventory of single-family homes dipped from 6.7 to 6.5 months compared to the national average of 9.4 months; Active listings fell 13.4 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 23,000 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.)

This entry was posted on Tuesday, August 25th, 2009 at 7:08 am and is filed under Get The Facts On The National 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.