Houston Real Estate Market On Pace For Second Best Year On Record
Recent declines in home sales slow in October; Prices continue to hold up
HOUSTON — (November 20, 2007) — Prospective home sellers and buyers throughout greater Houston may experience a more meaningful Thanksgiving this week, as recent declines in the real estate market slowed in October. New monthly figures continue to reflect a healthier housing environment locally compared to the rest of the country, with sales and pricing performance still outpacing that of 2005.
Total property sales for October registered 6,244, representing an 8.6 percent decrease compared to October 2006. That is half the 16.7 (revised) percent decline in September 2007 property sales. Properties sold during the month totaled $1.21 billion, a 3.3 percent decrease compared to last year’s $1.25 billion in October sales. Additionally, the average single-family home price for October rose 5.7 percent from last October to $199,397, while the median home price for a single-family home remained relatively flat at $145,390.
“The Houston real estate market is likely to experience continued weakness as the residual effects of the mortgage industry credit crunch filter through the system through the end of the year,” said Rob Cook, HAR Chairman and broker/owner of Robert D. Cook Properties. “We’re encouraged that sales prices are holding up and, that as a whole, the local numbers show us on firmer footing than other parts of the country. If you look at the overall year picture, we’re only modestly behind the absolute record year of 2006 and are ahead of 2005, which was a banner year.”
All listing categories combined, Houston’s overall housing market in October saw continued mixed results, with an increase in average sales price and fractional decrease
in median sales price. Both total property sales and total dollar value declined, but at a significantly lower rate than in the previous month. Total year-to-date property sales were down 2.6 percent.
The number of available homes (active listings) at the end of October was 53,407 properties, which was an increase of 14.4 percent versus last October and the 16th month with a year-over-year increase, after 10 consecutive previous declines. It was the first month to mark a monthly decline in active listings since December 2006. The figure was a decrease of 311 properties from last month, reflecting a continued slowdown in the pace of new listings. This is a positive indicator for the market, as lower inventories will help maintain pricing levels.
Month-end pending sales – those listings expected to close within the next 30 days – reached 4,562, which was down 6.6 percent from last year and signals another likely decline in sales next month after recent volatility in sales figures. The month’s inventory of single-family homes for October came in at 6.2 months, a slight drop from September’s 6.3-month figure and a return to the figure Houston recorded from June through August. This compares to the October 2006 single-family homes inventory of 5.5 months.
The overall median price of single-family homes in October was $145,390, a fractional decrease of 0.5 percent compared to October 2006. The figure represents a 3.1 percent drop from September. The average sales price for single-family homes was
$199,397 during October, which was up 5.7 percent versus the same period last year but the lowest figure in 2007 since February.
Houston’s current median price of $145,390 is 30.8 percent less than the national median price, which reached $210,200 in September, according to statistics released by the National Association of REALTORSâ. These data continue to demonstrate the tremendous value and lower cost of living afforded to Houstonians.
Additionally, total sales of single-family homes in Houston in October came in at 5,171, which was 7.9 percent lower than October 2006 but half the 16.4 percent (revised) decline observed between September 2006 and September 2007. Year-to-date sales of single-family homes remain negative this month, down 2.6 percent versus the first 10 months of 2006. The National Association of REALTORSâ’ currently forecasts a 12.5 percent decline in national home sales in 2007 versus 2006, however the Houston market is expected to fare significantly better.
HAR also reports existing home statistics for the single-family home segment of the real estate market. For the month of October 2007, existing single-family home sales totaled 4,323, which was a 7.2 percent decline from October 2006. The median sales price for existing homes in the Houston area was $136,000, a 1.4 percent drop compared to the same period last year. The average sales price of $187,300 for the month represented an increase of 6.4 percent from last year’s level. The most dramatic sales activity in October was observed for those homes priced at less than $80,000 and more than $500,000 – increases of 29.4 percent and 28.9 percent, respectively.
The Days on Market statistic for October was 81 days, which was higher than the 75 days in October 2006, but remains historically low and indicates that the homes that are selling are doing so fairly quickly.
The median price in the townhouse/condo segment in Houston increased to
$132,000 in October compared to $125,000 last month as well as in October 2006. The average sales price for which a townhouse or condo sold in the greater Houston area was $160,351 in October 2007, which was a 6.5 percent increase from the same month last year.