March 11th Houston Market Update....

The Houston single-family residential real estate market is experiencing some unusual statistics as it marches into 2010.  With 8% fewer home sales and 11% fewer contracts written, how do average and median sales prices of homes go up in comparison to 2009? The answer is in the price classes of homes that have closed this year.  Homes priced above $250,000, for the most part, experienced an overall sales decline in 2009.

Now comes closed sales in the first two months of 2010, and all price classes above $250,000 have experienced increases.  The two price class exceptions were the $700,000-$799,999 and $900,000-$999,999.  These two price classes are at the same level of demand as found in 2009.

What’s also unusual?  Home price classes below $250,000 have all experienced single to double digit declines in the first two months. These price classes were in highest demand this time last year.

At least for the two months of 2010, there has been resurgence in higher end housing demand and a decline in price classes below $250,000.

Most notable of all price classes is the $800,000-$899,999 range which has experienced a 93% increase over last year.  The second highest demand increase [53%] has been in the $400,000-$499,000 range and the third highest increase [50%] in demand is $1,000,000 or above.  

 Houston real estate sales February YTD 2010 experienced:

1. An 8% decline in single-family homes or a total of 5,792 sales. This is a decline which has improved from January’s 12% decline.
2. A 5% increase in dollar volume sales for a total of $1,149,747,831.  This is an increase from January’s 4% increase.
3. A 15% increase in average sales price which is currently $198,506.  In January the increase was 18%.  February may be the first month in a trend toward Houston’s move to more normal market conditions in terms of where price class demand has historically been. 
4. Days on the Market [DOM] – the time it takes on average to sell a single-family home in Houston declined 15% and is currently 82 DOM.  Hence, homes are selling faster than last year.
5. Pending sales dropped 11% [an improvement from January’s 17%] for a total of 4,981 contracts written.
6. Current listings are up 1% for a total single-family listing count of 27,978.

Prudential Gary Greene, Realtors® believes the housing market will pick up steam in March for 2 reasons:

1. The IRS Home Buyer Tax Credit benefits both current homeowners as well as first-time home buyers and expires on April 30.  To see if you qualify, go to

 https://www.realtor.org/home_buyers_and_sellers/2009_first_time_home_buyer_tax_credit

   2.  Interest rates are at an all-time low and when these two benefits coincide, the result is a flurry of buying activity that will culminate before April comes to a close.

This will spark demand through April, but what about the rest of the year?  While Houston lost jobs in 2008-2009, most economic experts anticipate the job growth to return to pre-recession levels beginning this year and extending into the entire 2011.  Jobs, more so than tax credits and low interest rates are the biggest driver of home sales.

Previously, we mentioned the rise in upscale homes as a rationale for a rise in average and median price in the overall Houston market for January 2010.  These were attributable to only 22.15% of all sales in Houston.

What home price classes were the hottest selling in Houston through 2/ 2010? 

The following table indicates by price class the most homes that have sold year-to-date in Houston in 2010:         

 As you can see from the Top Ten Selling Price Classes in Houston for 2010 range from $80,000-$399,000. These price classes and homes priced up to $800,000 are expected to be hot in Houston at least through April 30.  Why?  The 2010 IRS Home Buyer Tax Credit expanded to include houses priced up to $800,000.
Buying or selling?  Call me 832.797.3092