Comparison to hurricane-battered market and 2009 homebuyer tax credit are factors

HOUSTON — (November 19, 2009) — The lingering effects of Hurricane Ike back in October 2008 combined with recent homebuying activity spurred by the federal government’s $8,000 first-time homebuyer tax credit produced positive numbers for the Houston real estate market in October.

For the second month in a row, both property sales volume and pricing recorded gains. According to the latest monthly data compiled by the Houston Association of REALTORS® (HAR), October volume of single-family home sales across the greater Houston area rose 13.8 percent compared to October 2008. Total property sales climbed 14.1 percent in October on a year-over-year basis.

At $149,000, the October single-family home median price—the figure at which half of the homes sold for more and half sold for less—rose 5.0 percent from one year earlier, representing the sixth straight monthly increase in median price. The average price of a single-family home in Houston was $198,639, up 3.2 percent last month versus October 2008. Both figures reached the highest levels ever for a month of October in Houston.

Foreclosure property sales were flat month-over-month in October, making up 18.6 percent of all single-family home sales in the Houston area, but down compared to 25.8 percent in October 2008 and the 12-month peak of 34.0 percent in January of this year. The median price of October foreclosure sales reported in the Multiple Listing Service (MLS) rose 3.8 percent to $88,293 on a year-over-year basis.

Sales of all property types in Houston for August totaled 5,716, up 14.1 percent compared to October 2008. Total dollar volume for properties sold during the month was $1.0 billion versus $942 million one year earlier, representing an increase of 15.9 percent.

“Hurricane Ike had a lasting effect on the greater Houston real estate market last fall, so it’s no surprise to have the kind of year-over-year improvement we’ve now seen for two months in a row,” said Vicki Fullerton, HAR chair and broker of record at RE/MAX of The Woodlands & Spring. “Many Houston REALTORS® have reported that the first-time homebuyer tax credit was extremely effective at drawing consumers to the marketplace, and we believe momentum will build with the federal government’s extended and expanded incentive program.”

October Monthly Market Comparison
The month of October brought Houston’s overall housing market positive results when all listing categories are compared to October of 2008. Total property sales, total dollar volume and both median and average single-family home sales prices were all up on a year-over-year basis.

The number of available properties, or active listings, at the end of October fell 7.3 percent from October 2008 to 45,424. That housing inventory represents 96 fewer active listings than one month earlier, in September 2009.

October’s month-end pending sales—those listings expected to close within the next 30 days—totaled 3,673, which was 2.6 percent higher than last year. An increase typically signals that the next month’s sales will improve further, however because this data compares to a period in which Hurricane Ike interrupted many local real estate transactions, that signal is unclear. The months inventory of single-family homes for October came in at 6.1 months, down from 6.3 months one year earlier, and remains healthier than the national months inventory of single-family homes of 7.8 months, reported by the National Association of REALTORS® (NAR).

Single-Family Homes Update

At $149,000, the median sales price for single-family homes rose for the sixth consecutive month, up 5.0 percent from October 2008. That represents the highest median price ever recorded in a month of October in Houston. The national single-family median price reported by NAR is $174,900, 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 October was $198,639, an increase of 3.2 percent from one year earlier. That represents the highest average price ever recorded in an October in Houston.

October sales of single-family homes in Houston totaled 4,834, up 13.8 percent from October 2008. This is the second consecutive monthly increase in sales volume.

HAR also reports existing home statistics for the single-family home segment of the real estate market. In October 2009, existing single-family home sales totaled 4,049, a 15.6 percent increase from October 2008. At $140,000, the median sales price for existing homes in the Houston area rose 7.7 percent compared to last year. The average sales price of $185,117 climbed 7.0 percent from its October 2008 level.

Townhouse/Condo Update

The number of townhouses and condominiums sold in October rose compared to one year earlier. In the greater Houston area, 514 units were sold last month versus 418 properties in October 2008, translating to a 23.0 percent boost in year-over-year sales.

The median price of a townhouse/condominium rose 1.1 percent year-over-year to $126,340. The average price edged up 0.6 percent to $159,853 from October 2008 to October 2009.

Lease Property Update

Demand for single-family home rentals fell 12.4 percent in October compared to a year earlier. Year-over-year townhouse/condominium rentals declined by 5.6 percent.

Houston Real Estate Milestones in October