Houston Home Sales Rise Again in July

The second consecutive monthly increase is still attributed to slower than usual home sales in 2010 following expiration of the tax credit

What do you get when you compare seasonal summer home buying in a single month to the same month a year earlier shortly after a home buyer tax credit expired? If it’s July 2011 in Houston, Texas, it’s a nearly 17 percent increase in home sales. Last year’s third quarter slowdown in home sales continues to make this year’s generally “typical” real estate activity appear slightly more positive than it otherwise would be considered. July marked the third time in 2011 that sales volume entered positive territory. It also saw the average price of a single-family home reach its highest level for a July in Houston.

According to the latest monthly data compiled by the Houston Association of REALTORS® (HAR), July sales of single-family homes rose 16.7 percent versus one year earlier. That third increase of the year followed gains in January and June. All segments of the housing market, from the sub-$80,000 to the $500,000 and above, experienced positive sales. On a year-to-date basis, sales declined 2.2 percent. Compared to July of 2009, a year with no unusual market factors like Hurricane Ike in 2008 and the 2010 tax credit, single-family home sales were down 12.2 percent.

“It is still premature to label this latest increase in home sales a true positive indicator, but with the effects of last year’s tax credit fading and local employment figures strengthening, we should soon have an accurate reading on the Houston real estate market,” said Carlos P. Bujosa, HAR chairman and VP at Transwestern. “I believe the year-to-date and July 2009 comparisons probably yield the most realistic picture of what’s happening locally, and that places Houston in an enviable position when you see how other real estate markets around the country continue to struggle.

The average price of a single-family home rose 0.7 percent from July 2010 to $224,110, an all-time high for a July in Houston and the second highest average price of 2011. The July single-family home median price—the figure at which half of the homes sold for more and half sold for less—increased 0.3 percent year-over-year to $160,000. That is unchanged from June and remains the highest that the median price has been this year.

Foreclosure property sales reported in the Multiple Listing Service (MLS) increased 13.5 percent in July compared to one year earlier. Foreclosures comprised 19.6 percent of all property sales, up slightly from the June level but lower than the first five months of the year. The median price of July foreclosures was unchanged at $84,000 on a year-over-year basis.

July sales of all property types in Houston totaled 5,962, up 17.1 percent compared to July 2010. Total dollar volume for properties sold during the month increased 18.7 percent to $1.27 billion versus $1.07 billion one year earlier.

July Monthly Market Comparison
The month of July brought Houston’s overall housing market largely positive results when all sales categories are compared to July of 2010. However, as has been noted for the past few months, sales volume gains were skewed by the 2010 tax credit that resulted in a decline in home sales after it expired. Total property sales and total dollar volume rose on a year-over-year basis. The average price reached a record high for a July in Houston and the median price edged up year-over-year.

Month-end pending sales for July totaled 3,659, up 12.0 percent from last year. The rate is moving more in line with levels typically seen during the summer home sales months, but still reflects the rapid pace at which 2010 sales went under contract in advance of the tax credit closing deadline.

The number of available properties, or active listings, at the end of July declined 9.5 percent from July 2010 to 50,022. The inventory of single-family homes dipped to 7.6 months compared to 7.7 months one year earlier. That means that it would take 7.6 months to sell all the single-family homes on the market based on sales activity over the past year. The figure is significantly better than the national inventory of single-family homes of 9.5 months reported by the National Association of REALTORS® (NAR).

* Months inventory estimates the number of months it will take to deplete current active inventory based on the prior 12 months sales activity. This figure is representative of the single-family homes market.

 

Single-Family Homes Update
July sales of single-family homes in Houston totaled 5,034, up 16.7 percent from July 2010. This marks the third increase of the year after an 8.4 percent gain in January and 0.5 percent bump in June. The July number represents the second highest sales volume month of the year. June was higher with 5,570 homes sold.

On a year-to-date basis, sales are down 2.2 percent. When compared to July of 2009, a year in which there were no unusual real estate market influences such as Hurricane Ike in 2008 and the 2010 home buyer tax credit, single-family home sales were down 12.2 percent.

Broken out by segment, July sales of homes priced below $80,000 rose 15.8 percent; sales of homes in the $80,000-$150,000 range climbed 17.7 percent; sales of homes between $150,000 and $250,000 increased 18.5 percent; sales of homes ranging from $250,000-$500,000 advanced 13.7 percent; and sales of homes that make up the luxury market—priced from $500,000 and up—soared 25.7 percent.

The average price achieved the highest level for a July in Houston. At $224,110, the average price of single-family homes rose 0.7 percent compared to last July. At $160,000, the median sales price for single-family homes edged up 0.3 percent versus July 2010, remaining flat from June at $160,000, the highest median price of 2011 and the highest level in two years. The national single-family median price reported by NAR is $184,600, illustrating the continued higher value and lower cost of living available to consumers in Houston.

HAR also breaks out the sales performance of existing single-family homes throughout the Houston market. In July 2011, existing home sales totaled 4,341, a 22.0 percent increase from July 2010. The average sales price climbed 3.3 percent to $212,895 compared to last year and the median sales price of $150,000 was unchanged.

Townhouse/Condominium Update
The number of townhouses and condominiums that sold in July jumped 26.7 percent compared to one year earlier, marking the second sales increase of the year. The first was a 14.7 percent hike in January. In the greater Houston area, 460 units were sold last month versus 363 properties in July 2010.

The average price rose 3.8 percent to $156,754 from July 2010 to July 2011. The median price of a townhouse/condominium ticked up 1.7 percent to $121,000.

Lease Property Update
The Houston market experienced continued high demand for lease properties in the month of July. Single-family home rentals jumped 21.6 percent compared to one year earlier and year-over-year townhouse/condominium rentals rose 7.7 percent. This demand has been largely driven by steady improvement in local employment numbers, with REALTORS® observing a surge in consumers relocating to Houston from around the country.

Houston Real Estate Milestones in July

• Volume of single-family home sales rose for the third time in 2011;
• Volume of townhouse/condominium sales rose for the second time in 2011;
• At $224,110, the average price of a single-family home reached the highest level for a July in Houston;
• At $160,000, the median price of a single-family home remained flat from June, maintaining the highest level of 2011 and the highest level in two years;
• Townhouse/condominium sales rose for the second time in 2011;
• Single-family home rentals rose 21.6 percent;
• Townhouse/condominium rentals increased 7.7 percent;
• 7.6 months inventory of single-family homes compares favorably to the national average of 9.5 months.

 

The computerized Multiple Listing Service of the Houston Association of REALTORS® includes residential properties and new homes listed by 24,000 REALTORS® throughout Harris, Fort Bend and Montgomery counties, as well as parts of Brazoria, Galveston, Waller and Wharton counties. Residential home sales statistics as well as listing information for more than 50,000 properties may be found on the Internet at http://www.har.com.

The information published and disseminated to the HAR Multiple Listing Services is communicated verbatim, without change by Multiple Listing Services, as filed by MLS participants.

The MLS does not verify the information provided and disclaims any responsibility for its accuracy. All data is preliminary and subject to change. Monthly sales figures reported since November 1998 includes a statistical estimation to account for late entries. Twelve-month totals may vary from actual end-of-year figures. (Single-family detached homes were broken out separately in monthly figures beginning February 1988.)

Founded in 1918, the Houston Association of REALTORS® (HAR) is a 24,000-member organization of real estate professionals engaged in every aspect of the industry, including residential and commercial sales and leasing, appraisal, property management and counseling. It is the largest individual dues-paying membership trade association in Houston as well as the second largest local association/board of REALTORS® in the United States.