Foreclosures Pull Houston Home Prices Down Again In February
Month brings declining sales volume and continued demand for rental properties
HOUSTON (March 17, 2009) February marked another month of sagging real estate sales and pricing for the greater Houston area, following to a milder degree the trends that have played out around the country since the recession began more than a year ago. Overall February property sales fell 25.9 percent compared to February 2008, and sales of single-family homes declined by 24.6 percent, according to new monthly data prepared by the Houston Association of REALTORS® (HAR).
The average price of a single-family home in Houston dropped 10.5 percent last month to $182,316 compared to February 2008. At $138,970, the February single-family home median price the figure at which half of the homes sold for more and half sold for less fell 8.0 percent year-over-year. February marked the fifth consecutive month of price declines.
Sales of foreclosure properties, which typically sell below market prices, continued to place a drag on home prices last month. In February 2009, foreclosures made up 28.0 percent of all single-family home sales in the Houston area compared to 22.6 percent one year earlier. However that is an improvement from Januarys 34.0 percent share of single-family homes sales consisting of foreclosures. Part of that is attributed to a 23.0 percent month-over-month increase in overall property sales.
The median price of foreclosure sales reported in the MLS tumbled 15.0 percent from $94,000 to $79,900 on a year-over-year basis. The median price of traditional, non-foreclosure single-family homes dropped just 1.2 percent from $167,000 to $165,000.
Sales of all property types in Houston for January totaled 3,995, off 25.9 percent compared to February 2008. Total dollar volume for properties sold during the month was $710 million versus $1.0 billion one year earlier, a 33.4 percent decline.
Demand for rental properties rose again in February, with leases of single-family homes up 4.3 percent on a year-over-year basis and leases of high rise units up 192.0 percent. The latter figure tends to be more variable because of the comparatively small number of units involved.
Rentals remain a very attractive option for would-be home buyers throughout the Houston area who may be reluctant or unable to commit to the purchase of a home at this time, said Vicki Fullerton, HAR chair and broker of record at RE/MAX of The Woodlands & Spring. Consumers want to see signs that economic recovery is taking hold, and despite the recent progress made in Washington, we know thats not going to happen overnight.
February Monthly Market Comparison
The month of February brought Houstons overall housing market negative results when all listing categories are compared to February of 2008. Total property sales and total dollar volume fell, as did average and median single-family home sales prices.
However, the number of available properties, or active listings, at the end of February fell 12.8 percent from February 2008 to 44,747. That is 569 more active listings than January 2009 and considered an indication that inventory levels remain balanced.
Month-end pending sales those listings expected to close within the next 30 days totaled 3,227, which was 25.4 percent lower than last year and suggests the likelihood of a further decline in sales for March. The months inventory of single-family homes for February came in at 5.9 months, down 2.8 percent from one year earlier. The national months inventory of single-family homes is approximately 10 months, according to the National Association of REALTORS® (NAR).
Single-Family Homes Update
At $182,316, the average sales price for single-family homes dropped 10.5 percent from February 2008, when it was $203,797. However, the figure is up $18,000 from January of this year. The median price of single-family homes in February was $138,970, off 8.0 percent from one year earlier, but up about $10,000 from January. The national single-family median price reported by NAR is $169,900, illustrating the continued higher value and lower cost of living that prevail in the Houston market.
February sales of single-family homes in Houston totaled 3,424, down 24.6 percent from February 2008 and accounting for the 18th consecutive monthly drop. Year-over-year sales of single-family homes priced at $80,000 and below rose 35.4 percent in February, largely the result of foreclosure-related transactions.
HAR also reports existing home statistics for the single-family home segment of the real estate market. In February 2009, existing single-family home sales totaled 2,829, a 22.9 percent decrease from February 2008. At $165,897, the average sales price for existing homes in the Houston area fell 11.6 percent compared to last year. The median sales price of $128,000 for the month was also down 8.5 percent from one year earlier.
The number of townhouses and condominiums sold in February fell compared to one year earlier. In the greater Houston area, 305 units were sold last month versus 448 properties in February 2008, translating to a 31.9 percent decrease in year-over-year sales.
The average price of a townhouse/condominium dropped to $149,498, down 7.8 percent from one year earlier. The median price dipped 5.9 percent to $122,300 from February 2008 to February 2009.
Lease Property Update
Demand for single-family rentals increased again in February. Single-family home rentals rose 4.3 percent in February compared to a year earlier. While year-over-year townhouse/condominium rentals declined 7.0 percent, rentals of high rise properties jumped by 192.0 percent. The latter figure has a tendency to be more variable because of the comparatively small number of transactions in that housing category.
Houston Real Estate Milestones in February
Sales of single-family homes priced at or below $80,000 jumped 35.4 percent, driven largely by foreclosure activity;
Single-family home rentals rose 4.3 percent;
Rentals of high rise units increased 192.0 percent;
Months inventory of single-family homes fell from 6.1 to 5.7 months, remaining just above half the national average of approximately 10 months;
Active listings fell 12.8 percent, representing a generally balanced supply of housing inventory.