Each month that passes in 2009 brings more positive news about the Houston real estate market and its buoyancy.  The percentage declines we experienced in the first quarter of 2009 are declining.  Slowly but surely we are climbing back to a more normal market.

The table above displays how the Houston area market appeared to reach bottom in February with almost one fourth of the number of units and one third of the dollar volume dissolving from the previous year-to-date.  However, as time marches through 2009, those declines have declined.  See the column above “% Change from 02/09 to 07/09” to see the market improvement.  The only market indicator that is not in a positive position is the number of active listings, which  are down by 22% over this time last year and down 2% from February 2009.  Reduced inventory is a positive indicator and prevents real estate values from declining.

Here is a summary of Houston Single-Family Real Estate Market statistics for July 2009 year over year comparison:

• Sales reached 30,790 units sold, a 17% decline over July YTD 2008.
• Dollar volume sales reached $6,212,573,724, a 21% decline during the same time frame.
• Average sales price is $201,772, a 5% decline over July YTD 2008.
• Median sales price [half of the homes sold above the median and half below, and not subject to extreme fluctuations like average sales price] is $152,000 and that figure is down by only 1% from this time last year.
• # of pending sales or homes that have gone under contract year-to-date are 21,701 or a 20% decline over July YTD 2008.
• Active listings are 27,898 or 22% below those found in July YTD 2008.

The Brookings Institute ranked Houston the #1 housing market in the nation; see July 10, 2009 blog for details.  Houstonians are fortunate to have weathered this economic downturn better than any in the nation.

What home prices are the hottest selling in Houston right now?  The following table displays by price class the hottest selling price ranges in Houston in 2009:

 As you can see, the top selling homes by price class in Houston year-to-date range from a low of $90,000 to a high of $399,999, and these price classes represent the highest buyer demand for single-family homes.

First-time home buyers are encouraged to capitalize on the 2009 First-Time Homebuyers IRS Tax Credit as it stands a good possibility of expiring on December 1.  See if you qualify by taking the quiz located on the lower left hand corner of http://media.garygreene.com/.  For more information on the First-Time Homebuyers Tax Credit, please be sure to visit: http://www.realtor.org/home_buyers_and_sellers/2009_first_time_home_buyer_tax_credit_how_to

America's 10 Best Undervalued Places to Live

Houston was recently listed as one of America's 10 Best Under-valued cities to live in.  Please see the excerts below concerning our great city! 

The real estate bust has created some attractive bargain opportunities in certain housing markets

The Cinco Ranch team is pleased to report that new-home sales increased during the first six months of 2009 over the previous year. Cinco Ranch had 467 new-home sales during this time, compared to 446 sales for the same period in 2008. The 21-unit increase represents a 4.7% increase for the first six months of 2009 over the previous year. 

“While the increase might appear modest, it takes on significance when contrasted with the overall Houston market, where new-home sales are generally down by double digits in 2009,” said Jennifer Taylor.

Strong relocation sales to out-of-town buyers have helped Cinco Ranch improve upon the sales momentum it achieved in 2008, when it was ranked as the number one community for new-home sales in Texas (and number two in the nation) by RCLCO, a national real estate advisory company.

“Out-of-town buyers accounted for fully one-third of new-home sales at Cinco Ranch for the first half of 2009, a good indicator that Houston is still adding jobs, especially in the Energy Corridor which is near the community,” Jennifer said. 

Nearly half of Cinco Ranch sales for the first six months of 2009 have been “spec” homes (homes that were started by builders in anticipation of buyers). “The high percentage of spec sales at Cinco Ranch so far this year offers further evidence of strong relocation demand, since relo buyers typically want homes available for quick occupancy,” she added.

Houston was named by Fast Company Magazine as one of the 13 most creative cities in the world.  To view the full article and find out why, go to:

13 Most Creative Cities in the World

Another milestone for Houston in the real estate arena came from the Texas A & M Real Estate Center quoting Mike Inselmann, President of MetroStudy about new home sales in Houston: ”

“Despite sharp cuts in new home production, Houston still ranks as the nation’s top home-building market from March 2008 to March 2009, when builders started 22,502 homes and closed 28,326.”

Houstonians are fortunate to be living in a city where the number of  single-family homes on the market [inventory] has declined more than the number of home sales or for that matter, the amount of buyer-demand.

In a nutshell, May YTD single family home sales in Houston according to the Houston Multiple Listing Service:

1. Sales have reached 19,597 through May 2009, a 21% decline over year-to-date 2008.
2. Dollar volume sold YTD as recorded in Houston Real Estate Informaton Services is $3,754,771,410, a 26% drop in volume found year-to-date in 2008.
3. The average sales price of Houston single-family homes is $191,599 or 7% less than last year.
4. The median price is $145,000 and that is only 3% less than last year.  Median is the mid-point price where half the homes sold above and half sold below.
5. Pending sales recorded year-to-date are 15,072 or down by 22%.
6. The most positive note in the market is that new listings are down by 24%, a decline greater than sales and also key to retaining home value.  Active listings reached 27,769 and that figure is down by 22% from this time last year.

All real estate is local and with the land mass of Houston, one of the nation’s largest cities geographically and in population, the overall market appears much different than subsets of the whole.  Some areas of Houston are in an appreciating mode, while others are not as favorable.

The top 5 residential areas ranked by hotness for May 2009 are:

1. Katy - the south area with a hotness ratio of 22.5%, meaning 22.5% of all listings in the area received a contract in the month of May.
2. Pasadena area - hotness ratio of 17.9%
3. Fort Bend West - hotness ratio of 17.3%
4. Near North - hotness ratio of 16.5%
5. Southeast - hotness ratio of 16.3%

As you can see, these areas as well as others in Houston are experiencing the highest buyer demand in the city and differ quite substantially from the overall market expressed above. 

The Brookings Institute ranked Houston the #1 housing market in the nation  according to an article in the Dallas Morning News,” the Brookings researchers  make these claims based on the Federal Housing Finance Agency’s quarterly house price index, which tracks values of homes mortgaged by Fannie Mae and Freddie Mac.”  To get the full story, click here…

While the national news paints a bleak economic outlook, news about Houston’s economic future continues to look positive.  Most recently, the 2014 completion of the Panama Canal is predicted to triple freight tonnage at the Port of Houston, according to Moody’s Economy.com. In addition, the Canal’s expansion will make way for larger vessels that will increase not only cargo traffic along the Houston Ship Channel, but also the need for improved logistics and rail. 

When it comes to housing, according to Mike Inselmann, President of MetroStudy, “Houston still ranks as the nation’s top home building market, from March 2008 to March 2009, when builders started 25,502 homes and closed 28,326.”

Good news in hand, with every month that passes in 2009, the market indicators improve in comparison to the previous months’.  The table below shows the difference between the market experienced in February YTD 2009 and June.  

YTD 2009 and all of the metrics have improved this year.  The only metric that has continued to decline is active listings. A decline in active listings is very good news for market stability, especially during the high demand summer months. 

The current market indicators for Houston overall are as follows:

• Sales are down from June YTD 2008 by 20% with 24,994 single-family homes.
• Dollar volume sold is down from June YTD 2008 by 24% with $4,946,350,671.
• Average sales price is currently $197,902, down by 6%
• Median sales price is $149,500, down by 2% [ median is the mid-point where half of the homes sold above and half below.
• # of pending sales are 18,389 and that represents 21% fewer than found last year.
• Active listings, a metric that is good if on a decline, are currently 27,826 or 22% less than last year.  This is also a metric that is the exact opposite heard frequently in the national news.

While these are not upbeat statistics, they are very upbeat in comparison to California, Arizona, Nevada and Florida, where foreclosures and rising inventory have left little hope of a bounce back any time soon.  Houston homeowners are very fortunate to live in the best housing market in the nation.

Dateline:  June 18, 2009--The Brookings Institute has named Houston as the top housing market in the nation.  According to an article in the Dallas Morning News,   “Brookings researchers make these claims based on the Federal Housing Finance Agency's quarterly House Price Index, which tracks values of homes mortgaged by Fannie Mae and Freddie Mac.”

Brookings Institute ranked the following Best U.S. Housing Markets as follows:

1. Houston

2. Buffalo

3. Dallas-Fort Worth

4. Wichita

5. Greenville, S.C.

Another milestone for Houston real estate came from the Texas A & M Real Estate Center quoting Mike Inselmann, President of MetroStudy about new home sales in Houston: “Despite sharp cuts in new home production, Houston still ranks as the nation’s top home-building market from March 2008 to March 2009, when builders started 22,502 homes and closed 28,326.”

Bottom line, Houston is the best place to have a housing investment or to acquire one.

Houston was named by Fast Company Magazine as one of the 13 most creative cities in the world.  To view the full article and find out why, go to:

13 Most Creative Cities in the World

Another milestone for Houston in the real estate arena came from the Texas A & M Real Estate Center quoting Mike Inselmann, President of MetroStudy about new home sales in Houston: ”

“Despite sharp cuts in new home production, Houston still ranks as the nation’s top home-building market from March 2008 to March 2009, when builders started 22,502 homes and closed 28,326.”

Houstonians are fortunate to be living in a city where the number of  single-family homes on the market [inventory] has declined more than the number of home sales or for that matter, the amount of buyer-demand.

In a nutshell, May YTD single family home sales in Houston according to the Houston Multiple Listing Service:

1. Sales have reached 19,597 through May 2009, a 21% decline over year-to-date 2008.
2. Dollar volume sold YTD as recorded in Houston Real Estate Informaton Services is $3,754,771,410, a 26% drop in volume found year-to-date in 2008.
3. The average sales price of Houston single-family homes is $191,599 or 7% less than last year.
4. The median price is $145,000 and that is only 3% less than last year.  Median is the mid-point price where half the homes sold above and half sold below.
5. Pending sales recorded year-to-date are 15,072 or down by 22%.
6. The most positive note in the market is that new listings are down by 24%, a decline greater than sales and also key to retaining home value.  Active listings reached 27,769 and that figure is down by 22% from this time last year.

All real estate is local and with the land mass of Houston, one of the nation’s largest cities geographically and in population, the overall market appears much different than subsets of the whole.  Some areas of Houston are in an appreciating mode, while others are not as favorable.

The top 5 residential areas ranked by hotness for May 2009 are:

1. Katy - the south area with a hotness ratio of 22.5%, meaning 22.5% of all listings in the area received a contract in the month of May.
2. Pasadena area - hotness ratio of 17.9%
3. Fort Bend West - hotness ratio of 17.3%
4. Near North - hotness ratio of 16.5%
5. Southeast - hotness ratio of 16.3%

As you can see, these areas as well as others in Houston are experiencing the highest buyer demand in the city and differ quite substantially from the overall market expressed above. 

I'm often asked if this is a good time to buy a home. Some clients are concerned that home prices may fall further than they have already. They are assuming that the best course of action is to wait for the bottom in the market and then buy. The problem with this approach is that you don't know where the bottom is until you see it in the rear view mirror, meaning until you've missed it!

Home prices are one factor in determining your cost of ownership, but so are interest rates and financing availability. Even though interest rates have gone up in the last six months, they are still near historic lows. Since your monthly mortgage payment is a combination of paying down your principal and paying the interest owed, if home prices come down a little further but interest rates go up, it could cost you even more to service a mortgage on an identical home!

While a home is a major investment, it is also the center of your personal life. It's important to live in a home that reflects your taste and values, yet is within your financial "comfort zone." To that end, it may be more important to lock in today's relatively low interest rates and low home prices, rather than to hope for a further break in prices in the future.

Please give me a call if I can be of any assistance in determining how much home you can afford in today's market.