Monthly Housing Update

Single-family home median price rises for the fourth straight month

HOUSTON — (September 15, 2009) — The Houston real estate market showed continued signs in August of attempting to break free from the downward trend in property sales that first began in September 2007.

Boosted by seasonal summer home buying, including an influx of first-time home buyers taking advantage of the federal government’s soon-to-expire $8,000 tax credit, the August volume of single-family home sales across the greater Houston area slid 10.1 percent compared to August 2008, according to new monthly data compiled by the Houston Association of REALTORS® (HAR). That follows July’s 6.1 percent (corrected) drop, which was the smallest decline since the market downturn began in September 2007. Total property sales tumbled 11.0 percent in August on a year-over-year basis following last month’s 5.1 percent drop, which was the smallest rate of decline since November 2007 when it was off by 10.2 percent.

At $160,880, the August single-family home median price—the figure at which half of the homes sold for more and half sold for less—rose 0.6 percent from one year earlier to the third highest level of 2009. That’s the fourth straight monthly increase in the median price. The average price of a single-family home in Houston dipped 4.2 percent last month to $213,396 compared to August 2008. That represents the third highest average price of the year.

Foreclosure property sales slowed again in August, making up 16.7 percent of all single-family home sales in the Houston area compared to 18.3 percent in August 2008 and the 12-month peak of 34.0 percent in January of this year. The median price of August foreclosure sales reported in the Multiple Listing Service (MLS) declined 7.5 percent from $93,000 to $86,000 on a year-over-year basis.

Sales of all property types in Houston for August totaled 5,904, off 11.0 percent compared to August 2008. Total dollar volume for properties sold during the month was $1.0 billion versus $1.2 billion one year earlier, representing a decline of 13.9 percent.

“We knew going in that recovery would be a gradual process, however overall indications continue to show the Houston real estate market on strong footing, particularly when it comes to price appreciation,” said Vicki Fullerton, HAR chair and broker of record at RE/MAX of The Woodlands & Spring.  “Our REALTOR® members report that many first-time homebuyers have been taking advantage of the $8,000 tax credit, but time is running out with that incentive set to expire on November 30.”

August Monthly Market Comparison
The month of August brought Houston’s overall housing mostly negative results when all listing categories are compared to August 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 slightly.

The number of available properties, or active listings, at the end of August fell 12.9 percent from August 2008 to 46,023. That is 575 less active listings than one month earlier, in July 2009, and considered an indicator of balanced housing inventory levels.

Month-end pending sales—those listings expected to close within the next 30 days—totaled 3,901, which was 9.3 percent lower than last year. While that most likely means sales will be down again in September, the effects of Hurricane Ike on the local real estate business one year ago make it difficult to forecast. The month’s inventory of single-family homes for August came in at 6.5 months, down from 6.7 months one year earlier, and remains much healthier than the national month’s inventory of single-family homes of 9.4 months, reported by the National Association of REALTORS® (NAR).

Single-Family Homes Update
At $160,880, the median sales price for single-family homes reached the third highest level of 2009, up 0.6 percent from August 2008, when it was $159,900. August also marked the fourth consecutive monthly increase in the median price. The national single-family median price reported by NAR is $178,300, illustrating the continued higher value and lower cost of living that the Houston market offers consumers. The average price of single-family homes in August was $213,396, slipping 4.2 percent from one year earlier.

August sales of single-family homes in Houston totaled 5,058, down 10.1 percent from August 2008, and accounted for the 24th consecutive monthly drop. However, on a month-over-month basis, that volume is the third highest of 2009, and the 10.1 percent decline is the second smallest fluctuation of the year following July’s 6.1 percent (corrected) slide.

HAR also reports existing home statistics for the single-family home segment of the real estate market. In August 2009, existing single-family home sales totaled 4,328, an 8.3 percent decrease from August 2008. At $155,000, the median sales price for existing homes in the Houston area rose 4.0 percent compared to last year. The average sales price of $202,477 for the month dipped 1.6 percent from its August 2008 level.

Townhouse/Condo Update
The number of townhouses and condominiums sold in August fell compared to one year earlier. In the greater Houston area, 452 units were sold last month versus 555 properties in August 2008, translating to an 18.6 percent decrease in year-over-year sales. However, that still represents the third highest month-over-month sales volume of 2009.

The median price of a townhouse/condominium fell 10.3 percent year-over-year to $122,000. The average price dropped 9.7 percent to $153,184 from August 2008 to August 2009.

Lease Property Update
Demand for single-family home rentals rose slightly in August, up 1.2 percent compared to a year earlier. Year-over-year townhouse/condominium rentals climbed 5.9 percent.

Houston Real Estate Milestones in August