April 2008 Sales Houston's Real Estate Market Shows Continued Pricing Strength In April Despite A Lingering Sales Slowdown

The average single-family home sales price increases for a third straight month to the highest level ever for the month of April.

HOUSTON — (May 20, 2008) — Sales of single-family homes across greater Houston slid in April, but the average price of those homes increased for a third straight month to the highest level ever for the month of April and 2008, according to statistics released by the Houston Association of REALTORS® (HAR). The average price surpassed its level in April of 2007, the second best year on record. Single-family home sales fell 11.0 percent on a year over year basis.

The average price of a single-family home rose by 0.9 percent last month to $207,270 from $205,490 in April 2007. The median price of a single-family home was stable at $150,000. Sales of all property types for April 2008 totaled 6,432, which represents a 12.8 percent drop compared to April 2007. Total dollar volume for properties sold during the month was recorded at $1.3 billion versus $1.4 billion one year earlier, a 9.9 percent decline.

“Coming off of two consecutive record years, the Houston real estate market is demonstrating relative stability while other cities continue to suffer dramatic declines in both sales and pricing,” said Michael Levitin, HAR chairman and principal of HTownRealty.com. “We avoided a bubble thanks to Houston’s history of moderate growth in home values. The healthy local job market and diverse economy have created dynamics that are conducive to a faster recovery and we anticipate conditions to improve in the second half of the year.”

April Monthly Market Comparison
All listing categories combined, Houston’s overall housing market in April saw mixed results. The average single-family home sales price rose on a year-over-year basis while the median price held steady; total property sales and total dollar volume dropped.

The number of available homes, or active listings, at the end of April was 53,080 properties, a 6.3 percent increase over April 2007. The figure was up 810 properties from March 2008.

Single-Family Homes Update
The average sales price for single-family homes was $207,270 in April, up 0.9 percent versus the same period last year when it was $205,490. The overall median price of single-family homes in April was $150,000 compared to the national single- family median price of $193,900, according to statistics released by the National Association of REALTORS. These data continue to illustrate the higher value and lower cost of living prevalent in the Houston market.

Additionally, total April sales of single-family homes in Houston came in at 5,388, which was 11.0 percent lower than April 2007 but an improvement from the 15.9 percent slide in March. Brisk year-over-year sales activity continued in Houston’s low-end single-family home markets, with a 27.3 percent increase among homes priced below $80,000.

HAR also reports existing home statistics for the single-family home segment of the real estate market. In April 2008, existing single-family home sales totaled 4,565, which was a 9.6 percent drop from April 2007. At $189,514, the average sales price for existing homes in the Houston area dipped 1.4 percent compared to the same period last year. The median sales price of $140,610 for the month was unchanged from last year’s level.

The Days on Market statistic for April dropped to 84 from 87 a month earlier but exceeded the 75 days registered in April 2007.

Townhouse/Condo Update
At $130,000, the median price in the townhouse/condominium segment in Houston rose 5.1 percent from April 2007 to 2008. The average sales price for which a townhouse or condominium sold in the greater Houston area was $169,646 last month, up 5.7 percent compared to April 2007. Both median and average prices were the highest ever for the month of April.

April sales of townhouses and condominiums reached the highest level since August 2007 but were down from one year earlier. In the greater Houston area, 564 units were sold last month versus 704 properties in April 2007, translating to a 19.9 percent decrease in year-over-year sales.

Houston Real Estate Milestones in April
~Largest number of single-family home sales of 2008;
~Highest average single-family home sales price for the month of April;
~Average single-family home price increased by 0.9 percent to $207,270, the highest level of the year, while median single-family home price remained flat at $150,000;
~Sales of single-family homes below $80,000 continued to rise by 27.3 percent;
~Sales of townhouses and condominiums reached highest level since last August with the highest median and average prices ever for the month of April.

Single-Family Home Sales in Houston February Year-to-Date 2008

Single-Family home sales in Houston are down by 11% from year-to-date February 2007, with 8,058 recorded MLS sales, according to the Houston Association of Realtors Multiple Listing Service. While the Houston market has yet to catch up to the stellar years of 2006 and 2007, it is still ahead of 2005 sales by ironically, 11%.

The year 2005 was one of the greatest real estate years in Houston history and in 2006, it was referred to as the second best year. Then in 2007, 2005 became the third best year. I believe 2007 will be the third greatest year in residential history and will push 2005 to fourth place.

As sales go, so go the dollar volume sales and while Houston has experienced over $1.6 billion in dollar volume sales year-to-date, that is still 6% less than the second greatest year on record, 2007. Average sales price, on the other hand, is up 5% and is currently $198,396, one of the highest average sales prices on record. Average sales prices are affected by extremes and closing sales prices in Houston are undergoing some interesting dynamics. While numbers of sales are down in most price classes below $400,000, the following sales price classes are up in number of units closed YTD in Houston:

~ Homes priced $600,000-699,999 are up 21%
~ Homes priced $700,000-799,999 are up 19%
~ Homes priced $800,000-899,999 are up 4%
~ Homes priced $900,000-999,999 are up 24%
~ Homes priced $1,000,000 and up are up 37%

Homes priced below $200,000 have been most effected by the sub-prime mortgage meltdown and even more so by stringent credit requirements. This is a market that is most likely to receive a positive impact from Congress passing the Economic Stimulus Package, which among many things, increases the loan limit of FHA . It is too soon to see what impact the Economic Stimulus Package will have on the Houston economy and real estate market, however NAR economists believe it will have a positive national impact.

The median sales price in Houston year-to-date is $145,940 and that figure is up by 1% from this time last year. It takes an average of 92 days to sell a home in Houston and that figure is up by 12%, which happens to be the same percentage increase of current listings on the market. Active single-family homes on the market [listings] are up by 12% over this time last year with 34,725 homes listed in the HAR Multiple Listing Service.

Pending sales recorded year-to-date are 7,231, which is down by 9% over this time last year.

Houston is experiencing a great market; it is just not experiencing the record market seen over the previous two years. To put this into perspective,

~ Average sales prices are up in Houston over 2005 by 13%
~ Median sales prices in Houston are up over 2005 by 8.18%
~ Pending sales [buyer demand] are up over 2005 by 18.4%
~ Sales are up in Houston over 2005 by 11% as mentioned previously.

The real estate market is all relative. In 2005, we thought real estate could not get any better and yet, year after year, we saw it get better. This year will be better than 2005, however, it is difficult to exceed a record year every year. We are all fortunate to live, work and play in Houston, where real estate is healthy and home values are stable and in many cases, rising. California and Florida would give anything for a market like this!

Statistics provided by the Houston Association of Realtors Multiple Listing Service and provided by Prudential Gary Greene, Realtors

Houston Overall Statistics YTD January 2008

~ Single-family home sales are down by 12% in sold units over January YTD 2007 sales with 3,620 MLS recorded sold units, In January 2005, a great year for real estate and now viewed as the 3^rd greatest year on record [behind 2006 and 2007], 3,139 homes sold which is clearly 15% fewer homes than this year.

~ Dollar volume sold in MLS through January YTD 2008 is $688,607,260 which is an 8% decline in dollar volume sold over last year. The current dollar volume is 27.5% above January 2005 figures and clearly shows how far real estate values have come in 3 short years.

~ Average sales price YTD is $190,223 or 5% greater than this time last year. The current average sales price is 10% higher than found in January 2005.

~ Active listings are up by 12% with 34,570 single-family homes on the market. This increase is the one figure that shows the primary difference in the market between the two years, 2005 and 2008 as there were 20% fewer listings in 2005 than currently.

~ Contracts written, which represent January YTD buyer demand in Houston is down 10% over this time last year with 3,583 homes that have gone under contract. And yet in 2005, we saw 2,957 contracts written. In other words, demand today is 21% greater than demand found in January 2005.

~ Average sales price per square foot is $84, which is 3% greater than last year.

~ Days on the Market, a statistic that is good if it is declining has gone up by 14% since last year and the average time to sell a home in Houston is 92 days. Days on the Market in January 2005 was 91 days and when one considers the current increase in inventory, the Days on the Market to sell a home in Houston is in great shape because it is so similar to 2005.

~ Sales and contracts pending in the first month of the year have cooled somewhat but not in comparison to 2005. The year has started to trend towards becoming the third best year in real estate, next to 2006 and 2007.

~ The single most striking difference in the Houston market that has taken place over a short period of time is the sales occurring by price ranges. With few exceptions, homes priced below $600,000 have declined in number over this time last year, whereas homes priced $600,000 and above experienced double digit increases in units sold over this time last year. It is clear that lower priced homes have been affected by the subprime mortgage debacle, but this points to a changing demographic and dynamic for Houston real estate. Jobs created in the energy and medical sectors are key players in changing the price range demand in Houston housing.

Information from Toni Nelson – Reporter
Prudential Gary Greene, Realtors Monthly Market Update

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