September 2009’s numbers versus those posted in September 2008 are up substantially, but really only brings a very small amount of improvement when you take the time to analyze the numbers deeper. Even the leaders at HAR said that it is unfair to compare this month’s numbers with those seen in September 2008 because of the disruption the market place received due to Hurricane Ike. With this being the case, I dug back to 2007 to have a fairer comparison.
I will start off by saying that I am pleasantly surprised with the numbers. First of all, the total dollar volume of real estate sales for September 2009 was actually up from that seen just the previous month. August 2009’s total dollar volume was 1,079,356,968 while September 2009’s number was 1,102,879,419. Having the total dollar volume of sales up in September from that of August is really something to note, since historically September’s sales are worse than that of August as we move into the slow season.
Looking back at the 2007 numbers for total sales, I found it to be good news as well. In September of 2009, we had 5,654 total transactions and in September of 2007 we had 5,944. This amounts to a difference of just -4.8%. If you take a look at how far off the total sales numbers were off in August of this year compared to August of 2007, you come up with a number of -11.1%. Looking at the raw numbers, I would say that we are heading for positive territory. This means that we have likely finished our correction in number of transactions, which has been the single most worrisome market statistics for the Houston area.
Reinforcing this point are the total dollar volume for September 2009 and September 2007. September 2009 posted 1,102,879,417 in total dollar volume, and September of 2007 posted a total dollar volume of 1,200,845,359. This is a difference of just -8.2%. Now if you compare this number to the difference seen in total dollar volume for August 2009 and August 2007; August of 2007 had a total dollar volume of 1,726,573,670, and August of 2009 had a total dollar volume of 1,079,356,968, which amounts to a difference of -37.5%. This reversal in decline in dollar volume is substantial whether you look at it from a raw dollar stand point or a percentage point difference. I believe that it says things market wide are showing substantial improvement. Add to this that new unemployment claims are declining for the area, and you have the ground work for us to see a recovery. Below you will find the entire HAR report for September 2009.
HAR Full Report For September 2009:
Hurricane Ike sidelined Houston’s real estate business for several weeks after tearing through the region in September 2008, so it comes as no surprise that property sales one year later surged into positive territory.
According to the latest monthly data compiled by the Houston Association of REALTORS® (HAR), September volume of single-family home sales across the greater Houston area rose 32.0 percent compared to September 2008. Total property sales climbed 30.4 percent in September on a year-over-year basis. The increases come on the heels of gradual improvements to the local housing market resulting from an influx of first-time home buyers who have taken advantage of the federal government’s $8,000 tax credit that expires at midnight on November 30.
At $156,200, the September single-family home median price—the figure at which half of the homes sold for more and half sold for less—edged up 0.2 percent from one year earlier, representing the fifth straight monthly increase in median price. The average price of a single-family home in Houston dipped 1.6 percent last month to $205,925 compared to September 2008.
Foreclosure property sales continued to slow in September, making up 18.6 percent of all single-family home sales in the Houston area compared to 19.3 percent in September 2008 and the 12-month peak of 34.0 percent in January of this year. The median price of September foreclosure sales reported in the Multiple Listing Service (MLS) declined 1.0 percent from $88,950 to $88,000 on a year-over-year basis.
Sales of all property types in Houston for August totaled 5,654, up 30.4 percent compared to September 2008. Total dollar volume for properties sold during the month was $1.1 billion versus $877 million one year earlier, representing an increase of 25.7 percent.
“It is wonderful to see such a positive monthly report for the Houston real estate market, but stacking these numbers up against a month in which Hurricane Ike devastated the local real estate industry and many other businesses is a bit unfair,” said Vicki Fullerton, HAR chair and broker of record at RE/MAX of The Woodlands & Spring. “Nonetheless, we had recently begun to see indicators suggesting that we are working our way out of the market downturn and we expect to see continued improvement.”
September Monthly Market Comparison
The month of September brought Houston’s overall housing market positive results when all listing categories are compared to September of 2008. Total property sales, total dollar volume and median single-family home sales prices were all up on a year-over-year basis while average single-family home sales prices dipped.
The number of available properties, or active listings, at the end of September fell 9.2 percent from September 2008 to 45,520. That is 503 less active listings than one month earlier, in August 2009, and considered an indicator of balanced housing inventory levels.
September’s month-end pending sales—those listings expected to close within the next 30 days—totaled 3,650, which was 41.3 percent higher than last year. Because this compares to the month in which Hurricane Ike interrupted many Houston real estate transactions, it’s hard to determine if this figure portends improving sales for October. The months inventory of single-family homes for September came in at 6.2 months, down from 6.4 months one year earlier, and remains healthier than the national months inventory of single-family homes of 8.5 months, reported by the National Association of REALTORS®.
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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. | ||||||||||||||||||||||||||||||||
Single-Family Homes Update
At $156,200, the median sales price for single-family homes rose for the fifth consecutive month, up 0.2 percent from September 2008. That represents the highest median price ever recorded in a September in Houston. The national single-family median price reported by NAR is $177,500, illustrating the continued higher value and lower cost of living that consumers enjoy in the Houston market. The average price of single-family homes in September was $205,925, slipping 1.6 percent from one year earlier. That represents the second highest average price ever recorded in a September in Houston.
September sales of single-family homes in Houston totaled 4,792, up 32.0 percent from September 2008. This effectively ends 24 consecutive months of declining sales volume.
HAR also reports existing home statistics for the single-family home segment of the real estate market. In September 2009, existing single-family home sales totaled 4,074, a 35.6 percent increase from September 2008. At $149,000, the median sales price for existing homes in the Houston area was flat compared to last year. The average sales price of $192,487 for the month slid 2.7 percent from its September 2008 level.
Townhouse/Condo Update
The number of townhouses and condominiums sold in September rose compared to one year earlier. In the greater Houston area, 472 units were sold last month versus 392 properties in September 2008, translating to a 20.4 percent boost in year-over-year sales.
The median price of a townhouse/condominium edged down 0.8 percent year-over-year to $126,000. The average price dipped 2.1 percent to $157,776 from September 2008 to September 2009.
Lease Property Update
Demand for single-family home rentals rose 3.5 percent in September compared to a year earlier. Year-over-year townhouse/condominium rentals increased 2.2 percent.
Houston Real Estate Milestones in September
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Single-family homes sales rose 32.0 percent, ending 24 consecutive months of declining volume;
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The median price of a single-family home rose for the fifth straight month to the highest level ever recorded in a September ($156,200);
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The average price of a single-family home reached the second highest level ever recorded in a September ($205,925);
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Month’s inventory of single-family homes dropped from 6.4 to 6.2 months compared to the national average of 8.5 months.
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.)
October 30th, 2009 at 12:28 am
Very promising – especially the local unemployment decline which is the wildcard, but I do wonder how much the tax credit is artificially affecting the data. Thanks for the insight!
November 12th, 2009 at 12:13 pm
Jeff,
I think the tax credit is likely affecting the numbers but it is really hard to say since we will be seeing an extension rather than having a chance to notice what happens without it. My biggest concern about the tax credit is that we are pulling buyers into the market now from the future thereby promoting a substantial double dip in the market. This could be an ugly one unless unemployment has already reversed. I say this because at some point we will have eaten up all the ready, willing and able buyers for near future transactions. Having the tax credit expire prior to unemployment numbers improving would leave us with no new potential buyers. Obviously that would be bad for the market place.
November 14th, 2009 at 4:48 am
Houston’s home resale inventories decreased slightly, with a 3 percent decreased since October 2009. The median listing price in Houston stayed pretty much the same from October to November. Sales number were barely affected by unemployment rate though, which is somewhat surprising according to AOL Money: http://money.aol.com/article/houston-real-estate-market-recovered/740086
December 27th, 2009 at 4:37 am
I’ve done some analysis regarding upside residential opportunities in Texas. Statistically, it appears Houston is just as good of a bet as Dallas or Austin. Recent reports like this one only confirm the theory. Thanks for sharing.