Houston Lifestyles and Homes Magazine Feb 2010: Houston Property Sales and Prices Maintain Third Straight Month in the Black in November

The effects of Hurricane Ike and simultaneous economic downturn affecting Houston’s real estate market in November 2008 continue to distort year-over-year comparisons, which reflect yet another month of double-digit increases. However, longer-term analysis aimed at gleaning a more realistic view of market conditions shows November 2009 real estate activity to be comparable to that seen at the cusp of the recession, in the fall of 2007.

November marked the third straight month in which property sales volume and pricing recorded gains. According to the latest monthly data compiled by the Houston Association of REALTORS ®, November volume of single-family home sales across the greater Houston area rose 32.8 percent compared to November 2008. Total property sales climbed 37.1 percent in November on a year-over-year basis.

In addition to the comparative affects on sales data from last year’s natural disaster and economic recession, HAR member REALTORS® report that at least some of the month’s homebuying activity can be attributed to consumers scurrying to beat the original Nov. 30 homebuyer tax credit deadline before Congress voted to extend and expand the program.

At $150,000, the November single-family home median price—the figure at which half of the homes sold for more and half sold for less—rose 8.7 percent from one year earlier, representing the seventh straight monthly increase in median price. The average price of a single-family home in Houston was $198,948, up 6.7 percent last month versus November 2008. The median price reached the highest level ever for a month of November in Houston.

Foreclosure property sales continued to decline in November, making up 15.8 percent of all single-family home sales in the Houston area compared to 27.4 percent in November 2008 and the 12-month peak of 34.0 percent in January of this year. The median price of November foreclosure sales reported in the Multiple Listing Service rose 9.5 percent to $93,000 on a year-over-year basis.

Sales of all property types in Houston for November totaled 5,353, up 37.1 percent compared to November 2008. Total dollar volume for properties sold during the month was $1.0 billion versus $714 million one year earlier, representing an increase of 44.5 percent.

“This is the third month in a row in which a year-over-year comparison exaggerates the local housing landscape because Hurricane Ike continued to hurt the Houston real estate market last November, ” said Vicki Fullerton, HAR chair and broker of record at RE/MAX of The Woodlands and Spring. “We are very encouraged that property sales activity appears to be close to levels reached right before the recession took hold, and expect more realistic year-over-year data in the months ahead so we can again compare apples to apples. ”

November Monthly Market Comparison

The month of November brought Houston’s overall housing market positive results when all listing categories are compared to November 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 November fell 4.0 percent from November 2008 to 45,452. That housing inventory represents 28 more active listings than one month earlier, in October 2009.

November’s month-end pending sales—those listings expected to close within the next 30 days—totaled 2,741, which was 12.8 percent lower than last year. While such a decrease typically portends

a decline in sales volume for the following month, the Hurricane Ike effect and interest in the homebuyer tax credit make it tricky to forecast. The months inventory of single-family homes for November came in at 6.0 months, down from 6.1 months one year earlier, and remains healthier than the national months inventory of single-family homes of 7.0 months, reported by the National Association of REALTORS ®.

Single-Family Homes Update

At $150,000, the median sales price for single-family homes rose for the seventh consecutive month, up 8.7 percent from November 2008. That represents the highest median price ever recorded in a month of November in Houston. The national single-family median price reported by NAR is $173,100, 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 $198,948, an increase of 6.7 percent from one year earlier.

November sales of single-family homes in Houston totaled 4,519, up 32.8 percent from November 2008. This is the third consecutive monthly increase in sales volume and, again, is considered an anomaly because of Hurricane Ike ’s disruption of thousands of real estate transactions last fall.

HAR also reports existing home statistics for the single-family home segment of the real estate market. In November 2009, existing single-family home sales totaled 3,721, a 34.8 percent increase from November 2008. At $142,000, the median sales price for existing homes in the Houston area rose 13.6 percent compared to last year. The average sales price of $182,883 climbed 12.3 percent from its November 2008 level.

Townhouse/Condo Update

The number of townhouses and condominiums sold in November rose dramatically compared to one year earlier — again, the product of the market interruption caused by Hurricane Ike. In the greater Houston area, 502 units were sold last month versus 286 properties in November 2008, translating to a 75.5 percent boost in year-over-year sales.

The median price of a townhouse/ condominium rose 13.7 percent year-over-year to $134,500. The average price climbed 5.3 percent to $162,708 from November 2008 to November 2009.

Lease Property Update

Demand for single-family home rentals fell 9.0 percent in November compared to a year earlier. Year-over-year townhouse/condominium rentals declined by 2.9 percent.

Houston Real Estate Milestones

in November

•Single-family homes sales increased for a third consecutive month, by 32.8 percent;

•Existing single-family home sales increased for a third consecutive month, by 34.8 percent;

•Total property sales increased for a third consecutive month, by 37.1 percent;

•The median price of a single-family home was up for the seventh straight month, reaching the highest level ever recorded in a November ($150,000);

•Month’s inventory of single-family homes dropped from 6.1 to 6.0 months compared to the national average of 7.0 months. l

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