Houston Real Estate Market Positive for Sixth Straight Month

Consumers kept the Houston real estate market humming, accounting for the sixth consecutive month of positive home sales for 2011. The year-over-year increase in single-family homes sales, along with another rise in pending sales and further decline in inventory, reflects a market that continues to benefit from a healthy absorption of housing inventory.

November sales of single-family homes rose 11.4 percent versus one year earlier, according to the latest monthly data prepared by the Houston Association of REALTORS® (HAR). On a year-to-date basis, sales were up 4.1 percent. All segments of the housing market experienced growth except for the luxury segment—those homes priced from $500,000 and above—whose decline pulled down the overall average price.

The Greater Houston Partnership has forecast that our region will add more than 84,000 jobs this year, and as long as that’s the case, we would hope to see further strengthening of the local economy, including real estate. The single-family home median price—the figure at which half of the homes sold for more and half sold for less—reached the highest level for a November in Houston, climbing 2.6 percent to $154,950. November sales of all property types in Houston totaled 4,676, up 10.6 percent compared to November 2010. Total dollar volume for properties sold during the month rose 4.4 percent to $942 million versus $903 million one year earlier.

The inventory of single-family homes dropped to its lowest level since January 2010—6.2 months, compared to 7.6 months one year earlier. That means it would take 6.2 months to sell all the single-family homes on the market based on sales activity over the past year. The figure is significantly better than the national inventory of single-family homes of 8.0 months reported by the National Association of REALTORS® (NAR). These indicators all continue to reflect a balanced real estate marketplace for Houston.

November sales of single-family homes in Houston totaled 3,973, up 11.4 percent from November 2010. This marks the sixth consecutive increase of the year. On a year-to-date basis, sales are ahead 4.1 percent.

At $206,969, the average price of single-family homes declined 4.8 percent compared to last November. It nonetheless achieved the second highest pricing level for a November in Houston. The depreciation resulted from the lower volume of luxury home sales. At $154,950, the median sales price for single-family homes reached a November high, rising 2.6 percent year-over-year, its biggest increase since February 2011. The national single-family median price reported by NAR is $161,600, illustrating the continued higher value and lower cost of living available to consumers in Houston.

Heightened demand for Houston lease properties persists. Single-family home rentals rose 13.5 percent compared to one year earlier and year-over-year townhouse/condominium rentals climbed 4.1 percent. HAR has reported throughout much of 2011 that this demand has been largely driven by hiring gains that have drawn consumers to Houston from around the country. These consumers may not be ready or able to purchase a home for various reasons, among them more stringent mortgage lending requirements. According to the Greater Houston Partnership, as of October 2011, the Houston metropolitan area gained 153,000 jobs, or 101.1 percent of what it lost during the recession.