Houston’s current inventory is down 21% from this time last year, with 27,857 single-family homes on the market. Even more interesting, current inventory for April is down from last month by 1% and with each month that passes in 2009, the percentage decline in home sales from the year before assuages. This is contrary to the national scene depicting an overabundance of homes on the market and record foreclosures.
Over the last year, Houston home price classes have changed in hotness. Last year, homes on the market priced $900,000 and above experienced a 21% increase in demand. All other price classes’ year-to-date April 2008 experienced a decline in demand in comparison to 2007 except for homes priced $79,999 and below. The year 2008 was a year of price demand at the lowest and highest extremities of the price class spectrum. In addition, the 21% increase in demand in the $900,000 and up price class last year skewed the statistics to reflect a higher average sales price that did not reflect reality. Today, homes priced $900,000-$999,999 are down 31% and homes priced over $1,000,000 are down 44%. These factors help more clearly explain how average sales prices are highly affected by extremes, and the median sales price is the best barometer for a markets health. The median price is the mid point price in the market where half the homes sold above and half sold below. It is not affected by price ranges at the extremes of the price class spectrum.
The graph depicted below displays the top ten hottest selling home prices for April year-to-date 2009 based on number of home sales by price class.
The Top Ten Hottest Selling Price Classes of single-family homes in Houston year-to-date are:

As you can see, most of the top 10 selling price classes have healthy months of inventory and many will enjoy single digit appreciation. Also, it can be observed in the graph that the higher the price class, the higher the number of listings and the higher the months of inventory. Price classes that made the above Top Ten Selling Price Classes April year-to-date 2009 will most likely continue to see a healthy buyer demand throughout the spring and summer months.
In comparison to April year-to-date last year, single family homes are experiencing the following:
• Sales are down 21% with 14,799 sales
• Dollar volume is down 28% with $2,735,391,577
• Average sales price is $184,836 or 9% lower than last year, up by 1% from last month.
• Median sales price is $140,500 or 6% lower than last year, up by 1% from last month.
• Pending sales are 11,969 or 22% lower than last year
• Active listings are 27,857 or 21% lower than last year.
There are two things to keep in mind when reviewing the above April YTD Comparison:
1. We are comparing this year to the third best year in Houston residential history.
2. Every metric noted above is an improvement from February year-to-date, so with each month that passes, Houston real estate is improving.
Houston home buyers can capitalize on an $8,000 tax credit for first-time home buyers through the economic stimulus package, and interest rates are at record lows. These factors together with Houston’s positive employment base and affordable housing should stimulate an increase in home sales in the months to come. Prudential Gary Greene, Realtors® experienced a record sales month in April – one of the best since Hurricane Ike. As the economy continues to recover and people begin to feel more confident about the future and a greater sense of job security, Houston real estate will rise to the occasion

Houston was named by Fast Company Magazine as one of the 13 most creative cities in the world.  To view the full article and find out why, go to:

13 Most Creative Cities in the World

Another milestone for Houston in the real estate arena came from the Texas A & M Real Estate Center quoting Mike Inselmann, President of MetroStudy about new home sales in Houston: ”

“Despite sharp cuts in new home production, Houston still ranks as the nation’s top home-building market from March 2008 to March 2009, when builders started 22,502 homes and closed 28,326.”

Houstonians are fortunate to be living in a city where the number of  single-family homes on the market [inventory] has declined more than the number of home sales or for that matter, the amount of buyer-demand.

In a nutshell, May YTD single family home sales in Houston according to the Houston Multiple Listing Service:

1. Sales have reached 19,597 through May 2009, a 21% decline over year-to-date 2008.
2. Dollar volume sold YTD as recorded in Houston Real Estate Informaton Services is $3,754,771,410, a 26% drop in volume found year-to-date in 2008.
3. The average sales price of Houston single-family homes is $191,599 or 7% less than last year.
4. The median price is $145,000 and that is only 3% less than last year.  Median is the mid-point price where half the homes sold above and half sold below.
5. Pending sales recorded year-to-date are 15,072 or down by 22%.
6. The most positive note in the market is that new listings are down by 24%, a decline greater than sales and also key to retaining home value.  Active listings reached 27,769 and that figure is down by 22% from this time last year.

All real estate is local and with the land mass of Houston, one of the nation’s largest cities geographically and in population, the overall market appears much different than subsets of the whole.  Some areas of Houston are in an appreciating mode, while others are not as favorable.

The top 5 residential areas ranked by hotness for May 2009 are:

1. Katy - the south area with a hotness ratio of 22.5%, meaning 22.5% of all listings in the area received a contract in the month of May.
2. Pasadena area - hotness ratio of 17.9%
3. Fort Bend West - hotness ratio of 17.3%
4. Near North - hotness ratio of 16.5%
5. Southeast - hotness ratio of 16.3%

As you can see, these areas as well as others in Houston are experiencing the highest buyer demand in the city and differ quite substantially from the overall market expressed above.  For a complete list of areas ranked by hotness, please follow the link:   

Houston Hotness Index for May YTD 2009                                                  

For a complete review of the market by area, please visit:

Houston Area Market Update for May 2009

One of the interesting anomalies found in Houston real estate over the last year has been the change in buyer demand by price class.  Below are the hottest selling price classes for Houston real estate year-to-date 2009 and differ substantially from last year:

It appears that Houston has returned to its normal price class ranges that have been in demand historically.  Last year, the increases in homes sold over $1 million distorted overall average sales price and dollar volume  making the market appear healthier in appreciation than actual.  Hence, the average sales price and dollar volume declines seen this year are a comparison to last year making the market appear less robust than actual.

As the summer approaches, Houston real estate always surges ahead.  With interest rates at an all time low, the First-Time home buyer tax credit as a stimulus and one of the most positive economic climates in America, Houston will enjoy one of the best real estate markets the nation has to offer.

The Brookings Institute ranked Houston the #1 housing market in the nation  according to an article in the Dallas Morning News,” the Brookings researchers  make these claims based on the Federal Housing Finance Agency’s quarterly house price index, which tracks values of homes mortgaged by Fannie Mae and Freddie Mac.”  To get the full story, click here…

While the national news paints a bleak economic outlook, news about Houston’s economic future continues to look positive.  Most recently, the 2014 completion of the Panama Canal is predicted to triple freight tonnage at the Port of Houston, according to Moody’s Economy.com. In addition, the Canal’s expansion will make way for larger vessels that will increase not only cargo traffic along the Houston Ship Channel, but also the need for improved logistics and rail. 

When it comes to housing, according to Mike Inselmann, President of MetroStudy, “Houston still ranks as the nation’s top home building market, from March 2008 to March 2009, when builders started 25,502 homes and closed 28,326.”

Good news in hand, with every month that passes in 2009, the market indicators improve in comparison to the previous months’.  The table below shows the difference between the market experienced in February YTD 2009 and June.  

YTD 2009 and all of the metrics have improved this year.  The only metric that has continued to decline is active listings. A decline in active listings is very good news for market stability, especially during the high demand summer months. 

 The current market indicators for Houston overall are as follows:

• Sales are down from June YTD 2008 by 20% with 24,994 single-family homes.
• Dollar volume sold is down from June YTD 2008 by 24% with $4,946,350,671.
• Average sales price is currently $197,902, down by 6%
• Median sales price is $149,500, down by 2% [ median is the mid-point where half of the homes sold above and half below.
• # of pending sales are 18,389 and that represents 21% fewer than found last year.
• Active listings, a metric that is good if on a decline, are currently 27,826 or 22% less than last year.  This is also a metric that is the exact opposite heard frequently in the national news.

While these are not upbeat statistics, they are very upbeat in comparison to California, Arizona, Nevada and Florida, where foreclosures and rising inventory have left little hope of a bounce back any time soon.  Houston homeowners are very fortunate to live in the best housing market in the nation.

What home prices are the hottest selling in Houston right now?  The following table displays by price class the hottest selling price ranges in Houston in 2009:

As you can see, the top 10 selling price classes in Houston range from a low of $90,000 to a high of $399,000, and therein lies the largest demand for single-family homes. 

Houston buyers can capitalize on an $8,000 tax credit for first-time home buyers and use as a down payment under certain circumstances.  To find out more about the qualifications for an $8,000 tax credit, go to www.GaryGreene.com and select an agent for advice and cousel.  Prudential Gary Greene, Realtors® anticipates that the 2009 summer sales will far exceed the dismal first quarter, which was wrought with economic uncertainty and a barrage of bad news. 

More than any other factors, Houston has suffered from a loss of confidence and uncertainty of the future, especially during the months following Hurricane Ike.  The market improvement comparison table above indicates that our market is recovering from these psychological factors and moving toward more normal market conditions.

Houston was among the top U.S. cities in which to earn a living according to Forbes Magazine [article written September 3, 2009].  View the article by clicking here .

Forbes Magazine Summary:

“Among the best reasons to take up residence in Houston or Dallas, according to Forbes, is the number of top-ranked companies headquartered in each city: 38 and 15, respectively.”

The rankings were determined by median income, cost of living, job growth and the quality of the business environment. 

Most importantly, the magazine stated that ”if you are worried about the economic situation changing in Houston, Dallas or Austin, in the next few years, don’t be.  As health care, technology and energy take more employees into their ranks, cities that specialize in these core industries will continue to draw skilled workers and dole out attractive compensation.”

The Houston Market:

Each month that passes in 2009 brings more positive news about the Houston real estate market and its buoyancy.  The percentage declines we experienced in the first quarter of 2009 are declining.  Slowly but surely we are climbing back to a more normal market and with a bright employment picture ahead, real estate is destined for better days.

The table above displays how the Houston area market appeared to reach bottom in February with almost one fourth of the number of units and one third of the dollar volume dissolving from the previous year-to-date.  However, as time marches through 2009, those declines have declined.  See the column above “% Change from 02/09 to 08/09” to see the market improvement.  The only market indicator that is not in a positive position is the number of active listings, which  are down by 22% over this time last year and down 2% from February 2009.  Reduced inventory is a positive indicator and prevents real estate values from declining.

Here is a summary of Houston Single-Family Real Estate Market statistics for August 2009 year over year comparison:

• Sales reached 35,792 units sold, a 16% decline over August YTD 2008.
• Dollar volume sales reached $7,272,385,965, a 20% decline during the same time frame.
• Average sales price is $203,185, a 5% decline over August YTD 2008.
• Median sales price [half of the homes sold above the median and half below, and not subject to extreme fluctuations like average sales price] is $153,500 and that figure is down by only 1% from this time last year.
• # of pending sales or homes that have gone under contract year-to-date are 24,985 or a 19% decline over August YTD 2008.
• Active listings are 27,882 or 22% below those found in August YTD 2008.

While these statistics are not glowing, # of sales, dollar volume sold and pending sales have even improved from July, so the market continues to return with every month that passes. The Brookings Institute ranked Houston the #1 housing market in the nation; see our July 10, 2009 blog for details.  Houstonians are fortunate to have weathered this economic downturn better than any in the nation.

What home prices are the hottest selling in Houston right now?  The following table displays by price class the hottest selling price ranges in Houston in 2009:

According to a nationwide forecast by IHS Global Insight, four major Texas metros will be among the first in the nation to recover from the recession.  San Antonio and Austin are expected to bounce back to prerecession job levels sometime next year, predicts the Lexington, Mass.-based economic forecasting firm.

Houston and Dallas-Fort Worth are among eight other Metropolitan areas predicted to recover by 2011.  At Prudential Gary Greene Realtors, we believe that the best time to capitalize on a bounce back is before it bounces back!  With interest rates at an all-time low and only a few months left to receive the $8,000 IRS Tax Credit for First-Time Homebuyers[expires December 1, 2009], there has never been a better time to invest in a home, particularly in Houston.

The Houston Market for Third Quarter Year-to-Date 2009:

The trend is continuing.  With each month that passes in 2009, the Houston real estate market shows a marked improvement from the previous months:

February YTD is used as a comparison as it appears to be the month when Houston hit bottom in residential real estate.  June YTD is mid-year, and displays an improved market from February YTD.   The best YTD month in terms of  market improvement is September YTD.  Granted, last September statistics were marred by Hurricane Ike and has been a factor in making these current statistics look far better.  However, the last quarter of 2008 was also plagued with the mortgage meltdown, destabilization of our financial markets and a barrage of bad economic news.  The author believes 2009 will end much smoother than  the year began.  The New Year should experience a continuuance of the market trends seen herein and it will pave the way for a 2011 economic bounce back to pre-recession levels as predicted by IHS Global Insight. 

Here’s a quick synopsis of the above market indicators for September YTD 2009:

• Single-family home sales reached 40,558, which is down by 13% from Sept. YTD 2008.
• Dollar volume sold reached $8,247,700,781 or 17% less than found this same time last year.
• Average sales price is currently $203,356 and that is down by 4% over Third Quarter YTD 2008.
• Median sales price is $154,000 and that is down by 1%.
• Pending sales [contracts written] reached 28,042 and that figure is down by 15% over this time last year.
• There are currently 27,824 active listings in the Houston area, 21% fewer than found a year ago.

The market continues to strengthen due to two factors:

1. the current decline in sales [-13%]is not nearly as steep as
2. the decline in inventory, a.k.a. listings [-21%]. 

What price of homes are hot in Houston currently?  The table below shows the top ten price classes and they represent the hottest number of sales.

From an investment standpoint, now is the time to purchase a home in Houston, Texas and purchasing in the hottest selling price classes minimizes that risk. 

*Statistics derived from data received from Houston Realtors® Information Services and The Real Estate Center at Texas A & M University and compiled by Toni C. Nelson, Director of Strategic Initiatives for Prudential Gary Greene, Realtors®.