In the First Quarter of 2011, the Houston residential single-family market is 1% below the same number of sales in comparison to First Quarter last year.  It has exceeded the 2010 First Quarter in dollar volume sold, average sales price and # of homes on the market.  The First Quarter of last year had the advantage of an economic stimulus, the Homebuyers’ Tax Credit.  Lacking the same incentive, a 1% decline in number of sales for the First Quarter 2011 is a much better performance than expected.

Recent news about the economy indicates the current lag is on its way out in Houston.

 

  • The situation in the Middle East has raised safety concerns for energy companies with a presence there, prompting some to move employees back to Houston; according to HoustonRealEstateObserver.com.  This means many employees will be returning to Houston.
  • Houston commercial Realtors® have experienced an increase in Houston leasing activity — spurred not only by events in the Middle East, but by the recent resumption of Gulf drilling.  It has caused CBRE to rework its office vacancy projections for downtown Houston. Last year, the company projected the vacancy rate could go as high as 16 percent. “We’re optimistic that things won’t get as bad as we predicted,” Charles Gordon, executive vice president of CB Richard Ellis in Houston, said. “We are revising those numbers based on a lot of deals that are happening right now.”
  • Finally, more good news. Texas housing markets are among the healthiest for home building, according to Hanley Wood Market Intelligence. The firm’s Builder Market Health Index gives many Texas MSAs a market health indicator well above 50 out of 100 (50 being the minimum to be considered healthy). Austin-Round Rock had a score of 86.5.  Houston-Sugar Land-Baytown scored a 77.3; the second highest in Texas.

First Quarter Single-Family Houston Home Sales Year-to-date through March, homes sales are down in Houston by 1% with 10,675 home sales; yet contracts written are equal to First Quarter 2010 and Houston has experienced 8,556 contracts written year-to-date. Contracts written are contracts scheduled to close in the future and indicate current buyer demand. Since the number of contracts written First Quarter of this year and last are the same amount, the number of closings this year could catch up or even surpass 2010.     

 

Houstons’ average sales price is up 3% year-to-date; yet median sales price [where half the homes sell above and half sell below the midpoint] is down 1%. Almost any city in the nation would envy Houston’s ability to retain home values and while this quarter is the first to experience a 1% decline in median since 2008 – it’s not a trend likely to continue.  In one months’ time, from February to March, there has been a 2% decline in active listings.  This indicates no additional inventory has crept into the market that would inordinately hold housing values down.

 

Houston Home Values Are Likely to Hold