Below is an article written by Toni Nelson who is an executive in the Prudential Gary Greene Corporate offices. It is an excellent piece of work and that is why I am posting here..
Houston single-family home sales in June increased by 3% with 5,584 homes sold. While that is a nice increase over June of last year, contracts written [a measure of current demand] are lagging somewhat. There were 2,686 contracts written in June, which is down 19% from last year. The 2010 Tax Credit, [eligibility required a fully executed contract in place by April 30th] brought home buying demand forward and it is difficult to measure how much influence this will have throughout the summer. Year-to-date, the Houston real estate market is 9% ahead of last year.
Houston - Best Homebuying Opportunity is Now.
Who would have known? Immediately following the buying flurry up until the April 30th Tax Credit deadline, interest rates dropped dramatically in May and June, giving home buyers that were too late for the tax credit thousands of saved dollars over the life of a loan. These savings dwarfed the tax credit incentive. The Houston real estate market now has the best home buying opportunity due to lower interest rates and more homes available from which to choose. The 24% 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 savvy home buyers will recognize before interest rates change to a lesser advantage.
Here is a table overview of the month and year-to-date:
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Greater Houston MLS [HRIS] Single-Family Residential Real Estate |
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|
|
June 2010 |
June 2010 YTD |
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|
Metric |
Amount |
% Change From 6/09 |
Amount |
% Change From 6/09 YTD |
|
Sales |
5,584 |
3% |
27,351 |
9% |
|
Dollar Volume Sold |
$1,243,930,928 |
4% |
$5,695,171,720 |
15% |
|
Contracts written |
2,686 |
-19% |
17,608 |
-4% |
|
# of Listings |
34,625 |
24% |
30,569 |
10% |
|
Average Sales Price |
$222,767 |
1% |
$208,225 |
5% |
|
Median Sales Price |
$159,700 |
-3% |
$152,000 |
1% |
What home price classes are the hottest selling in Houston through June YTD?
The following table indicates by price class the top ten hottest selling price ranges in Houston in 2010:
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Ten Hottest Selling Price Classes Houston Single-Family Real Estate June YTD 2010 |
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|
Price Class |
Sales Year to Date |
Active Listings |
Months of Inventory |
|
1. $200,000-$249,999 |
2,683 |
3,649 |
7.6 |
|
2 $250,000-$299,999 |
1,961 |
2,766 |
8.1 |
|
3. $300,000-$399,999 |
1,933 |
3,270 |
9.5 |
|
4. $120,000-$129,999 |
1,582 |
1,835 |
6.6 |
|
5. $130,000-$139,999 |
1,504 |
1,701 |
6.3 |
|
6. $110,000-$119,999 |
1,453 |
1,656 |
6.7 |
|
7. $140,000-$149,999 |
1,307 |
1,553 |
6.7 |
|
8. $150,000-$159,999 |
1,266 |
1,590 |
7.0 |
|
9. $90,000-$99,999 |
1,263 |
1,484 |
6.9 |
|
10$80,000-$89,999 |
1,233 |
1,115 |
5.6 |
The High-End Market is Still Hot.
The 2010 paradigm in Houston's hottest selling home prices is the high-end market. Most, but not all, price classes $80,000 and above have experienced double-digit increases in sales over last year. Contrary to norm, the higher the price class, the higher the percentage increase in sales, in most categories. Homes priced $900,000-$999,999 are up in sales by 64% over last year, the highest increase in sales of any price class. Homes priced $1,000,000 or more are up 23% over last year. This represents an incredible comeback from a gloomy high-end market in 2009.
Highest % Increase in Sales by Price Class Year-to-Date
1. $900,000-$999,999 up 64% year-to-date
2. $600,000-$699,999 up 34% year-to-date
3. $400,000-$499,999 up 30% year-to-date
4. $500,000-$599,999 up 28% year-to-date
5. $800,000-$899,999 up 26% year-to-date
The Low-End Market is Not so Hot.
The other new 2010 paradigm in Houston's hottest selling prices is the low-end market. The majority of price classes $70,000 and below are experiencing double-digit declines.
Keep in mind that these statistics are sweeping generalities of a large major metropolitan market. The Houston Metropolitan Statistical area covers over 10,000 square miles. Houston is so large, it is like a mosaic. Some areas are shining brightly while others are not as lustrous. For a breakdown of activity by area with a map of the area, go to http://garygreene.mediaroom.com/index.php?s=38&cat=14.
What about Houston's future real estate prospects?
The short version is that Houston recorded 2.55 million payroll jobs in May 2009, more than the job counts of 29 U.S. states, including Arizona, Colorado and Alabama. Jobs are the biggest driver of real estate sales in any community. While there is uncertainty out there now with the future of NASA and the impact the B.P. oil spill will have on Houston, long-term future job prospects for Houston are one of the brightest in the nation. For a more detailed analysis of Houston's future in real estate, go to www.GaryGreene.com/blog and read the April 20th article entitled: Houston, Best Place to Buy Real Estate Right Now.
Data provided by the Houston Association of Realtors® Multiple Listing Service, and The Real Estate Center for Texas A&M and written by Toni Nelson, Director of Strategic Initiatives for Prudential Gary Greene, Realtors®
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