Houston Real Estate Market Shows Signs of Improvement

Over the past several months the Houston real estate market has showed various signs of improvement. Sales of single-family homes for the greater Houston area have achieved new highs for the year; the average single-family home price has increased from a year ago; the median home price made history; and foreclosure sales are down.

The month of April started a slow but steady turn in the Houston real estate market. Many downward trends have showed signs of improvement and a gradual upturn. Single-family home sales across the greater Houston area have significantly improved since the beginning of the year. Houston continues to demonstrate the strength of its home values compared to other communities around the country.

April had the second highest single-family sales volume so far for 2009 at 4,898, although, this volume was still down from April 2008 it showed much improvement for the year.

Average and median homes prices in April were the highest levels since September 2008. At $149,050, the median single-family home price held steady from one year earlier. The national single-family median price reported by the National Association of Realtors was $175,200, illustrating the continued higher value and lower cost of living that prevail in the Houston real estate market. The average price for a single-family home was $194,222 which increased from September 2008 but was still down from the average of $206,239 in April 2008.

Sales of foreclosure properties continued to drop and made up only 23.6 percent of all single-family home sales in the Houston area. This compares to 34.0 percent in January, 28.0 percent in February, and 24.5 percent in March.

Demand for rental property rose, with leases of single-family homes up 8.0 percent and townhome/condominiums up 12.2 percent on a year-over-year basis.

May brought even higher single-family sales numbers achieving the highest volume so far for 2009 at 5,539. The average and median sales prices continued to climb from previous levels and one year ago. The single-family median sales price of $157,450 increased by 1.6 percent from May 2008 which was at $155,000 and the average sales price increased .3 percent to $213,474 from May 2008 price of $212,872.

Foreclosure property sales dropped further for the year making up only 19.9 percent of all single-family home sales in the Houston area in May. However, the median price of May foreclosure sales reported dropped 5.3 percent from $89,900 to $85,108 on a year-over-year basis.

The rental market in May eased slightly. This may be an indication that consumers are considering purchasing rather than leasing.

June became a historic month in Houston real estate. The highest single-family median price of $164,500 made Houston real estate history. This was up 2.8 percent from June 2008 ($160,050) to reach an all-time high. Sales of single-family homes for the greater Houston area continued to improve with the highest volume recorded (6,306) for the year and since August 2008. The single-family average sales price also continue to increase in June at $221,783 but wasn’t able to reach last years $227,340 average.

Once again foreclosure property sales declined in June, making up only 16.8 percent of all single-family homes sales in the Houston real estate market. With each passing month this year this market has declined, yet, the foreclosure median price continues to drop.

The leasing market continues to slow possibly reflecting a growing readiness for renters to purchase a home.

“The Houston real estate market has shown incremental improvement each month this year, both in terms of sales volume and the pricing stability that others around the country envy,” said Vicki Fullerton, HAR chair.

There were no surprises when the Houston real estate market continued to improve in July with the highest single-family sales volume (6,744) since July 2008 and the second highest median price in history. These improvements come despite year-over-year declines in overall property sales according to the Houston Association of Realtors (HAR). With July’s improvements the declines are the smallest recorded since the economic downturn began in late 2007.

The single family home median price rose 1.5 percent from one year ago. The average single family sales price, $220,030, represented the second highest average price since August 2008.

Foreclosure property sales dropped even farther in July to 16.6 percent of all single family home sales in the Houston real estate market. This continued a downward trend since the beginning of the year; 34.0 percent in January, 28.0 percent in February, 24.5 percent in March, 23.6 percent in April, 19.9 percent in May and 16.8 percent in June. The foreclosure median prices continued to decline from $92,664 to $90,000 on a year-over-year basis.

Sales of single family homes priced between $150,000 and $250,000, the second busiest segment of the housing market, rose 1.2 percent in July.

Townhouse and condominium sales fell in July by 6.1 percent compared to one year ago. However, that still represented the highest sales volume since August 2008. The median price for a townhouse/condominium dropped 1.5 percent to $133,000 on a year-over-year basis, yet, the average price rose 2.6 percent to $169,838 from July 2008.

The number of active listings has fallen each month this year from the same time last year which continues to reflect balanced housing inventory levels.

With each passing month the Houston real estate market has shown improvement and an upward trend. Houston real estate is on the move. As for the future who knows. According to Vicki Fullerton, HAR chair, the future looks positive. She recently stated, “Strong pricing performance, an easing decline in sales volume and the slowdown of foreclosure sales make for very positive indicators about the state of the Houston’s real estate market. We look forward to further improvement as the tax credit incentive; historically low interest rates and an attractive variety of housing inventory continue to draw buyers to the marketplace.”