National Real Estate Market

Pending Home Sales Ease in Post-Tax Credit Market

Pending home sales edged down with near-term sales expected to be notably lower in contrast to the spring surge when buyers rushed to take advantage of the home buyer tax credit, according to the National Association of Realtors®.  The Pending Home Sales Index,* a forward-looking indicator, declined 2.6 percent to 75.7 based on contracts signed in June from an upwardly revised level of 77.7 in May, and is 18.6 percent below June 2009 when it was 93.0. The data reflects contracts and not closings, which normally occur with a lag time of one or two months.

Lawrence Yun, NAR chief economist, said lower home sales are expected in the short term. “There could be a couple of additional months of slow home-sales activity before picking up later in the year, provided the job market continues to improve,” he said. “Over the short term, inventory will look high relative to home sales. However, since home prices have come down to fundamentally justifiable levels, there isn’t likely to be any meaningful change to national home values. Some local markets continue to show strengthening prices.”

Yun expects mortgage interest rates to remain historically low for the balance of the year, with very modest growth in employment. “We really need to see stronger job creation to have a meaningful recovery in the housing markets,” he added.

Houston Real Estate Market

June sales up on Homebuyer Tax Credit

According to the latest monthly data compiled by the Houston Association of Realtors® (HAR), June sales of single-family homes throughout the Houston market rose 2.9 percent compared to June 2009. That follows increases of 11.3 percent in March, 27.8 percent in April and 18.2 percent in May. Sales volume showed gains in all single-family home pricing segments except the $150,000 to $250,000 market. The largest increase took place among homes priced from $500,000 and above. Sales of all property types combined climbed 4.1 percent in June on a year-over-year basis.

The average price of a single-family home edged up 0.9 percent from June 2009 to $222,767, the highest price since July 2008. The June single-family home median price-the figure at which half of the homes sold for more and half sold for less-dipped 2.9 percent from one year earlier to $159,700, but still reached the highest level since August 2009.  Foreclosure property sales reported in the Multiple Listing Service (MLS) rose 9.3 percent in June compared to one year earlier. The median price of June foreclosure sales increased 2.4 percent to $88,000 on a year-over-year basis.  Sales of all property types in Houston for June totaled 6,593, up 4.1 percent compared to June 2009. Total dollar volume for properties sold during the month was $1.4 billion versus $1.3 billion one year earlier, representing a 4.9 percent increase.

Houston Real Estate Milestones in June

-Single-family home sales rose 2.9 percent;
-Total property sales increased 4.1 percent;
- At $222,767, the average price of a single-family home reached the highest level since July 2008
-At $159,700, the median price of a single-family home reached the highest level since August 2009
-7.3 months inventory of single-family homes compares favorably to the national average of 8.3 months
-Townhouse/condominium sales rose 4.6 percent
-Total dollar volume climbed 4.9 percent, reaching $1.4 billion.

• Update on Tuscan Lakes in League City: 592 homes are now built; the master plan calls for 1,659 single-family homes. The 870-acre development is at FM 270 and the League City Parkway (SH 96). Four new builders were recently added to the mix with home prices ranging from the $130′s to $300′s.
• First residents at the Voyager Apartment Homes at the Space Center are moving in. The 313-unit complex is the first development to be completed at the new Nassau Bay Town Square. Sizes range from 670 – 1,422 SF, one, two and three-bedroom homes. Location is 18101 Point Lookout Drive, directly across from the Johnson Space Center.
• Fifteen more lots have been purchased by K. Hovnanian in Bentwood at Bay Colony, a Dickinson subdivision.
• The engineering phase is underway for Section 3 of Bayou Lakes on FM 517 in Dickinson.
• Two million dollar renovation and repair is underway on the Clear Lake-waterfront Endeavour condominiums in Pasadena. Available units will be marketed this spring.
• A new builder, Highland Homes, has been added at Creekside in Friendswood’s West Ranch. The south side of FM 518 will be under development sometime this year. Plans include lakes, a community clubhouse and larger swimming pool, parks, greenbelt trails and commercial development.
• Rolling Meadows is a new 124-unit apartment community planned in Kemah on FM 518 near Wal-Mart. It’s affordable housing for active people 55+ — high quality units and monthly rents that are below the market rate. One and two bedroom units will be
  available; amenities include a swimming pool, computer center, perimeter fencing and controlled gate access.

The San Antonio Business Journal reported that IHS Global Insight is forecasting that major Texas cities will lead the economic recovery in 2010 & 2011. The firm is forecasting San Antonio and Austin to return to pre-recession job levels by 2010, Houston and Dallas by 2011.  An interesting side note, the report predicts some areas like Detroit and Cleveland will not fully recover until after 2015.  The report focuses on a full recovery, obviously to get to those levels Texas would need to start gaining jobs quickly in 2010. Below is a break down from the SABJ Article.

2010

• Austin
• San Antonio

2011

• Houston
• Dallas-Fort Worth
• Kansas City
• Oklahoma City
• Raleigh
• Salt Lake City
• Virginia Beach-Norfolk
• Washington

2012

• Atlanta
• Baltimore
• Boston
• Charlotte
• Columbus
• Denver
• Indianapolis
• Jacksonville
• Memphis
• Nashville
• New Orleans
• New York City
• Orlando
• Philadelphia
• Richmond
• San Diego
• San Francisco-Oakland
• San Jose
• Seattle

2013

• Birmingham
• Las Vegas
• Louisville
• Miami-Fort Lauderdale
• Minneapolis-St. Paul
• Pittsburgh
• Portland, Ore.
• Riverside-San Bernardino, Calif.
• Sacramento
• Tampa-St. Petersburg

2014

• Buffalo
• Chicago
• Cincinnati
• Los Angeles
• Phoenix
• St. Louis

After 2015

• Cleveland
• Detroit
• Hartford
• Milwaukee
• Providence

An article from the Houston Chronicle reported today that home prices and sales are down. Unfortunately this is all most people will read. What the article fails to point out it that sales are down when compared to 2006 and 2007 the two best years in Houston real estate, ever. The market is a little softer this Feb. from last, with that said it all depends on where you are. In  the League City area we only have four months of inventory. That means if no other properties were listed after today every home would be sold in four months. The average days on market is 78 which is great. That’s a sellers, not buyers market. Also the waterfront market is very strong attracting national buyers because of our low prices.  As we always say in real estate its all location, location, location.  Your appreciation and how long it will take your home will sell depends on your local area (1 mile from your home) not what a home sold for in Katy or Dallas. Here are our January Stats for League City Homes.

Clear Lake Area

• Clear Lake single-family home sales have declined by 22 units over January YTD 2007 with 89 homes sold in 2008 as compared to 111 last year.
• Contracts written and pending to close year-to-date have also declined from last year by 14% for a total of 94 MLS recorded pending sales.
• Homes listed and on the market in Clear Lake area are up slightly by 1.37% from this time last year with 742 single-family homes on the market today as compared to 732 last year.
• Clear Lake’s Average sales price is down by 1.85% and currently stands at $173,564, as compared to $176,831 last year during the same time frame. The median sales price for January 2008 was $142,260 or 5.16% lower than the median sales price in January 2007. The median is where half the homes sold above and half sold below the median sales price during a given time frame.
• Days on the market register at 78, which represents a decline of 10-days less on the market to sell a home than last year.
• Clear Lake was ranked #6 on the January Houston Hotness Index because 12.7% of all listings went under contract during that one month! The market has only 4 months of inventory which puts the market clearly in a sellers market.

As a personal note 2007 was an outstanding year for me. I was able to sell 28 properties this year with production over $5 Million. I sincerely appreciate the support and referrals I received from my clients. I want to be your real estate resource and I will always treat your referrals like family.

2007 was the second best year on record for Houston residential real estate. All market indicators were positive except the amount of inventory currently on the market. Our market did suffer somewhat in the third quarter because of the issues in the mortgage industry. The mortgage industry is not as bad as the media portrays. There are still 100% loan options available to buyers and FHA loans only require 3% down. Mortgage and real estate professionals are lobbying congress to increase FHA loan limits and make more loan options available to homeowners. Buyers with stated (W-2) income and decent credit do not have a problem getting a loan. Rates as I type this are below 6%. For buyers putting down 20% rates are available from 4.9% to 5.6%. Those are outstanding rates for a 30 year mortgage.

The Clear Lake area is the 2nd hottest real estate market statistically in Houston. There is only a 3.3 month supply of homes. That means if no other homes were listed in 3.3 months every home for sale in area 7 (Clear Lake) would be sold. That is a very strong sellers market.New development in Houston is still an issue. This is added inventory that is not needed. Economist have encouraged developers to slow building but few have listened. Fortune has predicted that our market will see an 8% increase in appreciation in 2008. This past year homeowners received an appreciation increase of 4%. Below is a break down of different categories.

• Before 2007, the second best year was 2005, which recorded 64,821 sales or 7.13% fewer sales than 2007.
• Dollar volume sold in MLS in 2007 is $14,332,157,821 which represents no change in dollar volume sold over last year. In 2005, $12.2 billion were sold. Dollar volume sold in 2007 is 17.7% more dollar volume than was experienced in 2005.
• Average sales price YTD is $206,393 or 4% greater than this time last year. Average sales price in 2005 was $188,221, so in the last two years, Houston has experienced a 9.65% increase in average sales price.
• Active listings are up by 14% with 35,243 single-family homes on the market and a full 16% higher than found in 2005.
• Contracts written, which represent buyer demand in Houston, are up 2% over this time last year with 49,717 homes that have gone under contract. This says there are more people that want to purchase but for whatever reason did not close. The most likely cause was the mortgage meltdown when many would-be buyers saw their loans and mortgage companies evaporate. This pent-up demand may resurface in 2008, if the mortgage industry returns to normalcy.
• Average sales price per square foot is $90, which is 3% greater than last year.
• Days on the Market have remained the same since last year and the average time to sell a home in Houston is 77 days. This is an improvement from 2005, where it took an average of 82 days to sell a home.
• This year was not as robust as 2006, the first peak home sales year in the new Millennium, yet the Houston market is out-performing 2005, which was also a robust year for real estate in Houston.
  § 4,620 more units have sold this year than in 2005
  § $2.1 billion more in dollar volume sold than in 2005
  § Average sales price is 9.65% higher than in 2005
  § 7.04% higher median sales price than in 2005
  § Average Days-on-Market [DOM] have declined since 2005 by 5 days
  § Average price per square foot has increased 8.43%
  § Active listings are up over 2005 by 16%.
• The only metric that is not more positive than 2005 is an increase in homes on the market.
• Due to the rise in inventory, homes that sell will be staged to optimum condition and priced according to the most recent market comparables.

Overall homes in Clear Lake and Galveston continue to appreciate over last year. One average the appreciation is 4.7% to 8.3% which is a great sign. There are more houses on the market in both Clear Lake and Galveston when compared to last year. Last year was a record year for our area so it will be hard to match the 2006 numbers. With the number of properties on the market its important to price properties correctly when they are listed in order to sell them within 90 days.

Clear Lake Area
§ Clear Lake was ranked #3 out of 46 areas listed on the September 2007 Houston Hotness Index because 13.4% of all listings went under contract during that one month!
§ Clear Lake single-family home sales are down by 135 units or 7.03% over September YTD 2006 with 1,785 homes sold in 2007 as compared to 1,920 last year.
§ Contracts written and pending to close year-to-date are 61 units below last year for a total of 1,183 MLS recorded pending sales.
§ Homes listed and on the market in Clear Lake are down by 6.18% from this time last year with 805 single-family homes on the market today as compared to 858 last year.
§ Clear Lake’s Average sales price is up by 4.76% and currently stands at $187,996, as compared to $179,452 last year during the same time frame.
§ Days on the market register at 68, which represents one more day than it took to sell a home last year. Month’s inventory is 4.1, a very low supply in comparison to the Houston overall market and Clear Lake’s months of inventory last year, which were 4.5. Clear Lake currently enjoys one of the few areas with less supply than last year. Its’ inventory has adjusted well in relation to sales demand and therefore should play a significant role in keeping home price appreciation level or on the rise.Greater Galveston County
§ Single-family home sales in Galveston County were up 8.38% September YTD 2007 over the previous year during the same time frame with 3,324 home sales recorded in the Houston MLS year to date. There were 3,067 closed home sales last year during the same time frame.
§ Pending contracts recorded September YTD 2007 was up by 10.90% compared to last year. Pending units recorded year-to-date currently stand at 2,360 units whereas last year, pending units were 2,128 units.
§ Galveston Homes on the Market reached 2,801 units in September 2007 and are up by 16.56% over last year, when inventory was 2,403.
§ Galveston County’s average sales price is $195,936 and that figure is up by 5.31% over last year. The median sales price, where half the homes sold above and half sold below, is up by 5.14% and is currently $160,000.
§ Galveston County currently has 8 months of inventory. Last year Months of inventory were 8.6. Days on the market [DOM] to sell a home in Galveston County is currently 91 and that is longer than last year’s 80 DOM.
§ While Galveston County has experienced a great market, with an 8.38% increase in sales, a 16.56% increase in supply has created more competition for home sellers. Listings should be precision priced at its current 96% list price/sales price ratio or higher and should be in showcase condition to attract more buyers and the best offer.
§ The Houston Hotness Index for September ranked Galveston County #32 out of 46 in terms of hotness because 7.1% of all listings went under contract during that one month.