WASHINGTON (AP) -- The average rate on a 30-year fixed mortgage has fallen to its lowest level on records dating to 1971.

The rate on the most popular mortgage dipped to 4.15 percent from 4.32 percent a week ago, Freddie Mac said Thursday. Its previous low of 4.17 percent was reached in November.

The last time long-term rates were lower was in the 1950s, when 30-year loans weren't widely available. Most long-term home loans lasted 20 or 25 years.

Few expect record-low rates to energize the depressed home market. Over the past year, the average rate on the 30-year fixed mortgage has been below 5 percent for all but two weeks. Yet prices and sales remain unhealthy and are holding back the overall economy.

Five years ago, the average 30-year fixed rate was near 6.5 percent. In 2000, it exceeded 8 percent.

[Click here to check home loan rates in your area.]

Most homeowners are paying rates more than a full percentage point higher than the current average. The average rate on all outstanding mortgages is 5.3 percent, Freddie Mac said, citing data from the Bureau of Economic Analysis.

After previous recessions, housing accounted for 15 percent to 20 percent of overall economic growth. This time, in 2009 and 2010, housing contributed just 4 percent to the economy.

"The housing market is not going to turn around because of this, because it isn't the mortgage rate that matters," said Joel Naroff, head of Naroff Economic Advisors. Naroff blamed the "horrendous" process of qualifying for a mortgage despite tougher lending standards. He said trying to sell a home in many markets is just as difficult.

Many would-be buyers can't take advantage of the low rates. The unemployment rate is 9.1 percent, few Americans are getting raises and many are struggling to shrink their debt loads.

Banks are also insisting on higher credit scores and larger down payments for first-time buyers. Many repeat buyers have too little equity invested in their homes to qualify for loans. Others are too nervous about the economy or their job security to invest in a home.

The average rate on a 15-year fixed mortgage, which is popular for refinancing, fell to 3.36 percent, also a record low. It's the third straight week of record lows for the popular refinancing option. Freddie Mac's records date to 1991, but analysts believe the new low on the 15-year mortgage is the lowest ever.

Borrowers who qualify have rushed to refinance and take advantage of the low rates. Refinancing accounted for 70 percent of mortgage applications in the first half of the year, Freddie Mac said. Refinancings tend to provide less benefit to the economy than home purchases do.

Mortgage rates typically track the yield on the 10-year Treasury note. Economic fears have drawn investors to the safety of Treasurys, driving down the yield on the 10-year note to barely above 2 percent. That helped lower mortgage rates.

The Federal Reserve offered a dim outlook of the economy last week, saying it expects growth will stay weak for two more years. As a result, the Fed said it expects to keep short-term rates near zero through mid-2013.

Roughly 14 million Americans remain unemployed. And the economy isn't creating enough jobs to rapidly trim that figure. The economy grew at an annual rate of just 0.8 percent in the first six months of this year, the slowest such pace since the recession officially ended more than two years ago. In June, consumers cut spending for the first time in 20 months.

Fewer Americans bought previously occupied homes in July for the third time in four months, the National Association of Realtors said Thursday in a separate report. It said sales fell 3.5 percent last month to a seasonally adjusted annual rate of 4.67 million homes. That's far below the 6 million that economists say must be sold to sustain a healthy housing market.

To calculate average mortgage rates, Freddie Mac surveys lenders across the country Monday through Wednesday of each week.

The average rate on a five-year adjustable-rate mortgage fell to 3.08 percent, its lowest level on records dating to January 2005. Last week's reading of 3.13 percent also was a record low. The week before was, too.

The average for one-year adjustable-rate loans fell to 2.86 percent, the lowest on records going back to 1984. Last week's average of 2.89 also set a record.

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

MIDDLE EAST UNREST BOOSTS HOUSTON OFFICE MARKET

HOUSTON (HoustonRealEstateObserver.com) – 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.

That could mean good news for the Bayou City's office market, one industry insider said on today's HoustonRealEstateObserver.com.

“With the unrest in the Middle East, we’ve had some clients pulling their people out of Oman, Yemen and Libya. It’s just a dangerous world right now,” said Charles Gordon, executive vice president of CB Richard Ellis in Houston.

Gordon said that while employee safety will likely continue to be a factor in deciding whether to relocate, it is too early to determine for how long.

But an increase in Houston leasing activity — spurred not only by events in the Middle East, but by the recent resumption of Gulf drilling — 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,” Gordon said. “We are revising those numbers based on a lot of deals that are happening right now.”

Citywide, Houston's Class-A office market had a vacancy rate of 16 percent in first quarter 2011, compared with 16.3 percent at the end of 2010, according to CBRE data. Just over 357,900 sf of empty office space was filled in first quarter 2011.

Texas is one of six states projected to grow more than 2.1% between 2010 and 2016 according to HIS Global Insight.  The expected 2.3% growth will be pushed in part by high-tech manufacturing.  Texas also leads the nation as the number one magnet state according to Allied Van Lines.  Texas had the highest net relocation gain (inbound moves performed by Allied minus outbound moves).  Manufacturers’ News Inc. reported that Houston is the No. 1 manufacturing employer in the country, with 228,226 workers in a report released December 29^th.    

With all this good news—it’s good to have a place to celebrate!  Did you know that Esquire magazine named Houston as one of the top 10 restaurant cities in the nation (ranked #7).  Maybe it’s time for you to discover Houston’s hidden haunts!  Fourteen area top chefs have created the “Where the Chefs Eat” Culinary Tours.  The tours, limited to 16 participants, are $180 per person, which includes tasting at each stop, complimentary Saint Arnold’s beverages, limo-bus transportation and a gift bag.  Ticket proceeds benefit the Houston Food Bank.  Several of the events have already sold out, but you can go to www.HoustonCulinaryTours.com  for more information.    

 If you are looking for a place to go on your own, Anvil partners are planning a new craft-beer bar that “will offer great food.”  Located at 1100 Westheimer, the new establishment called Hay Merchant will have a carefully edited 80 microbrews on tap.  They are targeting a fall opening date.  A new yogurt retailer just opened at First Colony Mall called Maiberry (pronounced my berry).  What sets Maiberry apart from other frozen yogurt shops is that it uses dextrose, agave nectar and organic sugar products instead of regular sugar—according to the owner it makes it “diabetic friendly.”  Carl’s Jr. recently opened its first Houston restaurant at 8491 Highway 6 North at West Road.  The West Coast-based company is known for its sit-down restaurant quality burgers.

For those budding chefs, Urban Harvest is partnering with Highland Village (4000 Westheimer) to manage and expand the upscale shopping center’s farmer’s market this year.  Open on Sundays from 9 a.m. to 1 p.m., the farmers market will feature a farm-to-table market brunch theme each Sunday with chef and farm-driven market menus.  It will also have a Chef’s Corner, sponsored by My Table magazine, where chefs perform live cooking demos using local products.    

Citizens for Animal Protection (CAP) has moved from 11925 Katy Freeway to 17555 Katy Freeway (near the Barker Cypress exit).  Two developers are exploring new outlet centers on the southeast side of town.  Tanger Factory Outlet Centers (owns the San Marcos Outlet Center) is considering 35 acres in League City near I-45 and FM 646.  At the same time, Simon Property Group (Katy Mills owner) is planning to build a 350,000 sq.ft. center at I-45 south of Holland Road.  We’ll keep you posted on what develops!

Recently Houston Business Journal published the wealthiest zip codes in the Houston area and gave them names.  For example 77494 (West Katy) is referred to as “Sophisticated Squires” (often married with families, good jobs, long commutes, like working on their homes & lawns; drive SUVs and minivans); 77450 (South Katy) “Boomburbs” (the new suburbanites—busy, affluent young families with median age of 34, two income families, two cars and the latest electronics).   So, where is the wealthiest ZIP code?  77094 (West Houston).  West University (77005) was listed number 2!

 On the real estate front, area 36 (South Katy) was number one on the Hotness Index.  Citywide, December statistics showed home sales were down from December 2009, but prices were up.  A total of 51,428 homes were sold in 2010 as compared to 54,531 in 2009; however the average price of a single-family home increased 4% last year to $211,765 in 2010 as compared to $203,626 in 2009.  The Houston inventory rate is currently at 7.2 months as compared to a national rate of 9.5 months supply.  6-7 months is considered a “normal market” whereas 9 months is considered a “buyer’s market” and under 5 months a “seller’s market.”     

As a reminder, if you want to know what is happening in your neighborhood Prudential has a service where we can enter your name & e-mail address.  You will receive a monthly activity report on your area.  If you are interested in receiving this, please e-mail or call me and I will sign you up.  Sometimes it is nice to just see the pulse of a neighborhood—especially if you are considering selling and have the flexibility of timing.

What was the hottest single-family transaction in 2010?

In one word – it was rentals.  In 2010, there were 21,633 single-family rentals, which is up by 13% from 2009.  The average single-family rental price was $1472 [the same average rental price as last year] and the median single-family rental price was $1300 [the same median rental price as last year].  This clearly indicates there is plenty of pent-up demand in Houston for home buying. The housing market is poised for growth when tenants feel more certainty in their jobs, have built a good credit rating and interest rates continue to rise.

Positive Single-Family Home Sales in 2010

Upscale homes have been least affected by the current market.  Home sales priced $400,000 and above have experienced increases in sales over last year. Homes priced $600,000-$699,999 experienced a 23% increase in sales; $900,000-$999,999 experienced a whopping 36% increase since last year.  Homes priced $1,000,000 and more are up 12% in sales over this time last year. What home price classes were the hottest selling in Houston for the year 2010? 

The following table indicates by price class the hottest selling price ranges in Houston:

In conclusion, based on the projections by Veros Real Estate Solutions and the statistics herein that support their findings, Houston is the strongest market in the nation in terms of home price appreciation.  It is expected to see a 3.8% increase in home prices over the next year, more than any other U.S. city.  When it comes to investing in real estate, the Houston-Sugar Land-Baytown market is the first market to consider.

Data provided by the Houston Association of Realtors® Multiple Listing Service, and The Real Estate Center for Texas A&M.

Houston Tops Nation in Home Price Appreciation

According to a new report by Veros Real Estate Solutions, Houston is expected to post the nation’s strongest home price appreciation over the next year.  VeroFORECAST states that Houston’s relatively low unemployment – 8.7% in August-contributed to the city showing an increase in home prices in the third quarter and that trend should only continue.  Houston will help Texas lead the nation in terms of home price appreciation over the next 12 months.

September single-family statistics supports that the study has merit.  Even with the current multi-faceted national economic uncertainty, and the lackluster sales month Houston experienced in September, the region seems to possess remarkable resilience in retaining median sales price and raising the average sales price.  If the country can move to more certain times for business and consumers, Houston home sales will rise first, if the historic low interest rates remain, even temporarily.   The statistics below aren’t pretty but we forget how lucky we are to be in Houston, where it doesn’t get any better than this.

Here is a table depiction overview of the month and year-to-date:

  Houston has the second largest land mass in the United States.  It has many submarkets that look entirely different from the above overall market.  

Upscale homes have been least affected by the current market.  Home sales priced $400,000 and above have experienced double digit increases in sales over last year.  The exception to this rule is the $700,000-$799,999 price class and the $800,000-$899,999.  These price classes have increased 1% and 7% respectively.  The largest increase in upscale price class has been $900,000-$999,999.  This price class has experienced a whopping 49% increase since last year.

What home price classes were the hottest selling in Houston through Third Quarter? 

The following table indicates by price class the hottest selling price classes in Houston through September 30, 2010:

 As you can see from the Top Ten Selling Price Classes in Houston for 2010, hot selling prices ranged from $80,000-$399,000. Months of Inventory have gone up in Houston with every month since April 30^th; the last date of the Homebuyer Tax Credit .

COLLEGE STATION (Real Estate Center) – When it comes to home price appreciation, Texas is standing strong, said Real Estate Center Chief Economist Dr. Mark Dotzour.

Dotzour was responding to the Federal Housing Finance Agency's (FHFA) second quarter 2010 home price index, which ranked Texas third in the nation in home price appreciation for the year ending June 30, 2010.

FHFA reported a 1.43 percent increase in Texas home prices during that period versus 1.6 percent nationally.

"The strong price trends in Texas are because we didn't have a price bubble in the previous decade," Dotzour said. "For several years, Texans were asking why their homes were increasing only 3 to 5 percent per year, when Arizona was going up 30 percent."

In addition, Dotzour said the credit crisis virtually ended new home construction lending all over the country, abruptly shutting off the pipeline of new supply in 2008 and reducing any chance of heavy overbuilding in the single-family market.

Research Economist Dr. Jim Gaines noted that Texas was one of only ten states that reported increases in home prices during the past year, and it was one of only five states where prices had more than a 15 percent increase over the past five years.

Prices in Texas increased by 15.88 percent since 2005, landing it fourth on FHFA's ranking of states based on five-year price appreciation.

"What that means is that Texas home values fared better than all of the high-appreciation states over the five-year period that included the recession," Gaines said.

Among Metropolitan Statistical Areas (MSAs), Amarillo came out smelling like a yellow rose. It was the only Texas MSA to land on FHFA's list of 20 MSAs with the highest rates of home price appreciation.

That’s great, but who wants to live in Amarillo?

Amarillo ranked 16th with a one-year price increase of 0.42 percent.

The annual 2009 Census Household survey showed that the Houston-Sugar Land-Baytown area added over 140,000 to its total population, a 2.5 percent increase over one year.

“The continued arrival of people in Texas fuels demand for housing markets,” said David Jarvis, director of Metrostudy’s Houston division. “This, coupled with a more optimistic employment outlook, signals continued stability in the Houston housing market.”

For the 12 months ending in June 2010, the Houston region lost 17,100 jobs. As recently as December, the 12-month loss exceeded 100,000 jobs. By year’s end, year-over-year comparisons are expected to show moderate gains.

Houston ranked tenth among major U.S. metros for high-salary jobs, according to employment website TheLadders.com.

“We’re seeing hiring in the energy (oil and gas) sector,” said TheLadders.com Editor-in-Chief Matthew Rothenberg. “Considering the makeup of the local economy, it is not a surprise that there are a large number of engineering and consulting positions opening in Houston as well."

The Houston housing market has continued to show stability through 2nd quarter 2010. Home starts for the quarter were at 5,942, a more than 12 percent increase over the first quarter. And home closings have outpaced new supply, indicating a higher housing demand and reducing total inventories of homes. At current absorption rates, the level of housing supply stands at 6.1 months.

However, the New Home Buyer Tax Credit should be taken into consideration (see "Weak Home Sales Numbers Not Whole Story" in today's RECON).

WEAK HOME SALES NUMBERS NOT WHOLE STORY

COLLEGE STATION (Real Estate Center) – Home sales statistics are likely to paint a picture of a weakening market through the end of 2010 and the first half of 2011. While it’s tempting to attribute the bleak numbers to a deteriorating housing market, an economist with the Real Estate Center at Texas A&M University said that doesn’t tell the whole story.

“The year-over-year decline in existing home sales will be the result of comparing months when there was no tax credit with those from a year earlier, when the tax credit was artificially increasing sales,” said Dr. Mark Dotzour, the Center’s chief economist.

The $8,000 tax credit for first-time homebuyers went into effect in January 2009 and was planned to expire in November 2009. Home sales gradually started to increase after the tax credit was announced, after bottoming out in January at an annual rate just above 4.5 million sales.

Existing home sales gradually increased in 2009 as buyers and real estate agents became more familiar with the program. Sales topped an annual rate of five million in July 2009 for the first time since September 2008.

As the tax credit deadline approached, home sales spiked in September, October and November 2009. November 2009 was the peak at an annual rate of almost 6.5 million.

The tax credit was extended late in 2009 to include sales with contracts written until April 30, 2010, and closed by June 30 (extended to September 30). Initial homebuyer response to this extension was tepid, but sales picked up substantially in March, April and May 2010, when sales were up 18 percent, 28 percent and 18 percent, respectively, over the same months in 2009.

Then the process reversed itself. Pending home sales fell dramatically in May 2010, the month after the tax credits expired. This was followed by a significant drop in home sales in June and July. In Texas, July 2010 sales were down approximately 25 percent from July 2009.

Dotzour said August figures may not be much better since many buyers purchased homes before the tax incentive expired.

“When you ‘bring forward’ sales through tax incentives, sales will be lower after the tax credit ends,” he said.

Unless Congress creates a new tax credit this fall, Dotzour said monthly sales for 2010 will likely exhibit significant variance from 2009, and a true reading of housing market conditions may not be possible until June or July 2011.

HOUSTON - (August 17, 2010) - An anticipated property sales slowdown set into the Houston real estate market in July following the expiration of the federal homebuyer tax credit. The credit had propelled local home sales for four straight months beginning in March, however home sales suffered a double-digit decline in July. Despite the drop, the average price of a single-family home still managed to climb to a two-year high.

According to the latest monthly data compiled by the Houston Association of REALTORS® (HAR), July sales of single-family homes throughout the Houston market fell 25.1 percent compared to July 2009. Sales volume faltered in all single-family home pricing segments except among properties under $80,000, which were flat. Sales of all property types combined slid 24.4 percent in July on a year-over-year basis.

The average price of a single-family home rose 2.7 percent from July 2009 to $224,764, the highest price since June 2008. The July single-family home median price—the figure at which half of the homes sold for more and half sold for less—dipped 0.7 percent from one year earlier to $160,880, but still recorded its highest level since July 2009.

Foreclosure property sales reported in the Multiple Listing Service (MLS) tumbled 13.5 percent in July compared to one year earlier. The median price of July foreclosure sales declined 6.1 percent to $84,000 on a year-over-year basis.

Sales of all property types in Houston for July totaled 5,056, down 24.4 percent compared to July 2009. Total dollar volume for properties sold during the month was $1.0 billion versus $1.4 billion one year earlier, representing a 23.9 percent drop.

"Homebuying came earlier and at a heftier pace than we would normally have seen in Houston during the spring and summer months because of the tax credit, but indicators showed that sales would decline once the credit expired, so this comes as no surprise," said Margie Dorrance, HAR chair and principal at Keller Williams Realty Metropolitan. "It is encouraging that pricing has remained strong and that on a year-to-date basis home sales are actually slightly ahead of 2009 levels."


July Monthly Market Comparison
The month of July brought Houston's overall housing market largely negative results when all listing categories are compared to July of 2009. Total property sales and total dollar volume fell on a year-over-year basis while the average single-family home sales price rose to a two-year high and the median price dipped.

The number of available properties, or active listings, at the end of July rose 18.6 percent from July 2009 to 55,247. That represents 1,313 more active listings than one month earlier, in June 2010, and reflects additional housing inventory that is remaining on the market as a result of reduced consumer interest following the expiration of the homebuyer tax credit.

Month-end pending sales for July totaled 3,267, down 16.4 percent from last year, suggesting that sales will be down again in August. The months inventory of single-family homes for June extended to 7.7 months compared to 6.5 months one year earlier, but remains healthier than the national months inventory of single-family homes of 8.9 months, reported by the National Association of REALTORSâ (NAR).

Single-Family Homes Update

July sales of single-family homes in Houston totaled 4,297, down 25.1 percent from July 2009. This concludes four consecutive months of accelerated sales activity. Broken out by segment, July sales of homes priced from $80,000 and below were flat; homes priced between $80,000 and $150,000 fell 29.2 percent; those in the $150,000 to $250,000 dropped 35.0 percent; homes priced between $250,000 and $500,000 declined 19.8 percent; sales of luxury homes—those priced from $500,000 to the millions—tumbled 22.7 percent. On a year-to-date basis, however, single-family home sales are up 2.7 percent over 2009 levels.

The average price of single-family homes in July was $224,764, up 2.7 percent compared to one year earlier. That is the highest pricing level since June 2008. At $160,880, the median sales price for single-family homes slid 0.7 percent versus July 2009. That is the highest price since July 2009. The national single-family median price reported by NAR is $184,200, illustrating the continued higher value and lower cost of living that consumers enjoy in the Houston market.

HAR also breaks out the sales performance of existing single-family homes throughout the Houston market. In July 2010, existing home sales totaled 3,626, a 24.6 percent decline from July 2009. The average sales price edged up 1.4 percent to $207,644 compared to last year while the median sales price of $150,000 declined 3.2 percent from its July 2009 level.

The following table indicates by price class the top ten hottest selling price ranges in Houston in 2010:

As you can see from the table above, Houston’s hottest selling home prices range from $80,000-$399,999.  What is also interesting to note is that the months of inventory, on even the hottest selling price classes has risen slightly from last month. This is once more an indication that sellers should stay tuned to activity in their market area, and consider price adjustments to stay competitive.

Who would have known?  Immediately following the buying flurry before the April 30^th deadline, interest rates dropped dramatically in May, giving home buyers that were too late for the tax credit thousands of saved dollars over the life of a loan and dwarfing the tax credit incentive.  The Houston real estate market now has the best home buying opportunity not only due to lower interest rates but also, as you can see in the table below, more homes available from which to choose.  The 17% higher inventory is also a motivator for sellers’ to become more competitive in their asking price. 

Many economists agree that current positive economic indicators may cause the Fed to raise interest rates in the not too distant future.  Clearly, there is a window of opportunity in the market that savvy home buyers will capitalize on before it is too late.

1. Total number of listings – 47.5% more listings than the next highest broker!
2. Total number of listings sold in Houston
3. Total number of buyer representation sides and
4. Total number of homes sold year-to-date over any other broker.

With less than one month to go before the 2010 Homebuyers’ Tax Credit expires on April 30* –there are encouraging economic signs on the Houston home front. Buying a home would be a good investment. Why?

1.       Houston population growth in 2009 and

2.     Unemployment rates are declining and

3.     Home sales in Houston [see chart below] show value retention and ample supply.

Houston Population Growth:

Houston and Dallas–Fort Worth received the largest influx of residents in the country in 2009, according to the U.S. Census Bureau.

Houston had the second-highest population growth last year, with 140,784 people pouring into the metro area, a 2.5 percent increase that pushed the region’s total population to 5.86 million.  Dallas – Fort Worth [two large metros combined] have 6.45 million people as of July 1, 2009 and added 146,530 people. It marked a 2.3 percent increase from 2008.

Houston and Dallas-Fort Worth grew in population in 2009 more than any other region in the nation. Population growth plays a large factor in homes sales and home value retention.

Houston has the sixth-highest population in the United States, according to the U.S. Census Bureau.

Houston Employment and Unemployment:

The Houston-Sugar Land-Baytown Metropolitan Statistical Area gained 10,300 jobs from January to February, according to estimates released today by the Texas Workforce Commission. That’s the largest one-month gain since November ’08.

Unemployment receded from 8.8 percent in January to 8.5 percent in February—not a statistically significant movement, but encouraging nonetheless. Unemployment here remained well below the 10.4 percent national rate. (Rates are not seasonally adjusted.)

The number of initial unemployment insurance claims in the 13-county Gulf Coast Workforce Development Area in February was 17 percent less than in February ’09, Workforce Solutions reports. While we’ve seen month-to-month ups and downs, the moving three-month average for initial claims has declined every month since May ’09, and now stands 19 percent below that peak—definitely a movement in the right direction.

Employment is the single most important factor to rising home sales and we see Houston getter stronger as we move through 2010.

Houston compared to other Texas Cities:

Houston experienced more home sales than any other city in Texas including Dallas-Fort Worth combined, Houston experienced 370 more sales than Dallas-Fort Worth. The chart below gives a year-over-year comparison of Texas cities. Houston has a balanced supply of homes on the market, value retention and sales have been trending toward positive territory since February 2009.

Here is how select Texas cities fared in February (data current as of March 25, 2010):

 Summary:

These encouraging economic indicators, along with the 2010 Homebuyers Tax Credit and favorable interest rates make the next 30 days a prime time to invest in a home in the Houston Metropolitan area. 
*2010 Homebuyers Tax Credit – home buyers must have a binding written contract in place by April 30, 2010 with a closing date no later than June 30, 2010.- go to http://www.realtor.org/home_buyers_and_sellers/extended_home_buyer_tax_credit_how_to for details], 

Last year in February 2009, Houston experienced a 24% decline in year-to-date sales over 2008.  Every month following February, sales declines began to decline and the year ended with 7% fewer home sales than 2008. 

1. First Quarter 2010 sales are equal to those found in First Quarter 2009 however,
2. Dollar volume sales are up by 13% for a total of $2,183,412,127. 
3. The average sales price is up 13% at $204,191 and the median sales price is up 8% at $149,900. 
4. The average price per square foot is up 10% and now stands at $87. 
5. Homes on the market are up by 3% with 28,793 listings, certainly not a supply that would impact home values.  The best news of all is that
6. Days-on-Market, the average number of days it takes to sell a Houston home is down by 16%. Days-on-Market are 81.

Previously, we mentioned the rise in upscale homes as a rationale for a rise in average and median price in the overall Houston market during the First Quarter.  These were attributable to only 23% of all sales in Houston.

What home price classes were the hottest selling in Houston through First Quarter?  

The following table indicates by price class the hottest selling price ranges in Houston in 2010:

 As you can see from the Top Ten Selling Price Classes in Houston for 2010, hot selling prices ranged from $80,000-$399,000. These price classes are expected to be hot in Houston at least through June 30^th because of the time-contingent 2010 IRS Home Buyer Tax Credit.  Setting aside this temporary demand incentive, these price classes are also more aligned with historical price class demand in Houston.

These attributes will spark demand through June, but what about the rest of the year?  While no one has an accurate crystal ball, Dr. Barton Smith of the UH Center for Public Policy remarked,” A year ago, I thought we’d be dragging behind the parade but we’re just not doing that.”

The Just for the Kids list is compiled annually by the NCEA. The analysis included student test results from spring 2007, 2008, and 2009.

The list is based on two factors: academic growth and college and career readiness. Schools recognized for growth achieved better improvement rates for their students compared with other schools with similar demographics.

Schools recognized for college and career readiness are the top 5 percent of schools in the state, based on the percentage of students scoring at or above NCEA’s career readiness targets.

Katy ISD Higher Performing Schools include:

• Taylor, Seven Lakes and Cinco Ranch high schools;
• Beck, Beckendorff and McMeans junior high schools; and
• Alexander, Rylander, Kilpatrick, Nottingham Country, McRoberts, Mayde Creek, Katy, Exley, Hayes, Schmalz, Williams, Pattison, Griffin, Fielder and Winborn elementary schools.

Every market indicator for the month was positive, except pending sales which dipped 15% below last November.

Houston Milestone: 

November YTD 2009 was the first month in 2009 where sales improved from double-digit declines to single-digit decline.  Single-family home sales year-to-date are now only 8% below last year – quite an improvement from YTD February sales which were 24% below 2008.