The unemployment rate in the Houston – Sugarland – Baytown statistically area increased 1.1%  in June to 8%. The unemployment rate for the state rose to 7.5% up from 7.1% in May. Overall Texas is well below the 9.5% national unemployment rate but obviously unemployment rate for Texas is increasing significantly. Employment has huge affects on commercial real estate.  The increase in the unemployment rate shows a large contraction is business activity in the Greater Houston Area.  Companies laying off employees impacts  the office sector of commercial real estate the most because there is less demand for space for employees. Overall the demand for class A office space in the 1st Quarter for 2009 was high but vacancies in class B & C space is on the rise.

Texas Workforce Press Release

Clear Lake and Galveston Real Estate is still moving at a swift pace. The issues the mortgage industry had in the previous few months have not had the affect that some in the media predicted. The number of sales are down from the record breaking year of 2006 but we are still in line with the past 3 years of sales. The important number, appreciation is far above last year with a 3 – 4% increase in our area. Forbes has predicted an 8% increase in appreciation for the Greater Houston Market. In Galveston County there is an increase in properties for sale but overall homes on average are still selling within 90 days.

One problem I am seeing is that homeowners who purchased new homes from home builders 2-5 years ago cannot afford to sell now. This year I have had numerous meetings with different home sellers that simply owed more than their home is worth. My next blog will address the trend that I see in new subdivisions and how to avoid paying to much.

9/1 – 11/19 # of Property Sales
Clear Lake Area
2004 557
2005 512
2006 557
2007 436

Galveston County
2004 776
2005 780
2006 961
2007 865

Statistics don’t lie we are still experiencing an great market. In Clear Lake and Galveston County homeowners are seeing 5-6% appreciation form last year which is outstanding. Forbes predicts the Greater Houston area will see an 8% appreciation from this year. New Construction impacts our market more than anything else. In every area in Clear Lake and Galveston homeowners are competing with builders. Because of the competition its important that properties be in good condition and priced correctly.

Clear Lake Area
§ Clear Lake was ranked #11 out of 46 listed on the October 2007 Houston Hotness Index because 12.1% of all listings went under contract during that one month!
§ Clear Lake single-family home sales are down by 168 units or 8.03% over October YTD 2006 with 1,925 homes sold in 2007 as compared to 2,093 last year.
§ Contracts written and pending to close year-to-date are 82 units below last year for a total of 1,281 MLS recorded pending sales.
§ Homes listed and on the market in Clear Lake are down by 6.17% from this time last year with 806 single-family homes on the market today as compared to 859 last year.
§ Clear Lake’s Average sales price is up by 5.14% and currently stands at $187,403, as compared to $178,247 last year during the same time frame.
§ Days on the market register at 67, which represents the same DOM it took to sell a home last year. Month’s inventory is 4, a very low supply in comparison to the Houston overall market and Clear Lake’s months of inventory last year, which was 4.4. 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 6.80% October YTD 2007 over the previous year during the same time frame with 3,610 home sales recorded in the Houston MLS year to date. There were 3,380 closed home sales last year during the same time frame.
§ Pending contracts recorded October YTD 2007 were up by 8.23% compared to last year. Pending units recorded year-to-date currently stand at 2,564 units whereas last year, pending units were 2,369 units.
§ Galveston Homes on the Market reached 2,808 units in October 2007 and are up by 15.60% over last year, when inventory was 2,429.
§ Galveston County’s average sales price is $196,399 and that figure is up by 6.43% over last year. The median sales price, where half the homes sold above and half sold below, is up by 6.67% and is currently $160,000.
§ Galveston County currently has 8 months of inventory. Last year Months of inventory were 7.8. Days on the market [DOM] to sell a home in Galveston County is currently 92 and that is longer than last year’s 80 DOM.
§ While Galveston County has experienced a great market, with a 6.8% increase in sales. Listings should be precision priced at its current 95% list price/sales price ratio or higher and should be in showcase condition to attract the best offer.

July YTD 2007 – Single-family home sales

Houston Overall Statistics July YTD 2007

• Single-family home sales are exactly the same number of sold units as found in July YTD 2006 sales with 42,152 MLS recorded sold units
• Dollar volume sold in MLS through July YTD 2007 is $8,669,472,677 which is a 3% increase in dollar volume sold over last year.
• Average sales price YTD is $205,672 or 3% greater than this time last year. The median sales price, where half the homes sold above and half the homes sold below is $152,000, and that is 2% higher than last year.
• Active listings are up by 15% with 34,493 single-family homes on the market.
• Contracts written, which represent July YTD buyer demand in Houston, are up 6% over this time last year with 31,253 homes that have gone under contract.
• Average sales price per square foot is $90, which is 3% greater than last year.
• Days on the Market, a statistic that is good if it is declining, has gone down by 4% since last year and the average time to sell a home in Houston is 76 days, down from last year’s 79 days.
• Contracts written [buyer demand] are still in a positive position in the first half of the year, and days on the market on the decline. The only metric that is causing a drag on the market is the double digit increase in homes on the market. This additional supply makes selling a home more competitive and will slow home price appreciation in areas that have experienced an increase similar to the overall Houston market.

The Top Ten Areas on the Houston Hotness Index in July 2007 are:

Katy, Area 36 Hotness Ratio – 24.6
Clear Lake, 7 Hotness Ratio – 19.7
Montgomery County, SW, 15 – 18.6
Fort Bend Central, 29 – 18.2
Far Northwest, 32 – 17.3
Hempstead West, 35 – 16.3
Montgomery County, SE, 40 – 15.1
Northeast, 1 – 14.7
Montgomery County, NE, 19 – 14
Far Northwest, 14 – 13.9

Finally after almost two months of rain we are seeing sunshine and real estate activity. This previous month we have seen interest rates stable and record rains. There has been no real motivation for buyer to move on properties or to look. When rates are volatile buyers move in order to beat raising rates. When it rains everyday people don’t stop at open houses or drive neighborhoods unless that must move. The past two weeks we have seen a large amount of traffic at open houses and showings are improving. With people getting home from summer vacations activity will continue to increase.

Whats Hot – Waterfront property is still very hot with sellers getting contracts close to list price and selling with 2-3 months. Land is also very hot. Last year on average land appreciated by 21% according to The Real Estate Center at Texas A & M.

Whats Not – Condo’s & Townhomes – While this segment of the market isn’t bad it is softer than the housing market. With affordable housing and low interest rates condos must be priced right and in good condition to move. With that said waterfront condos/townhomes are moving very quickly.

HOUSTON (Houston Chronicle) – Area home sales were back up in April after dipping in March (8.4 percent) for the first time in three years.
Sales of mostly existing single-family homes increased 3.6 percent last month, compared with the same time a year ago, according to the Houston Association of Realtors.
The median price for a single-family home reached a monthly record for April of $150,000, up 2 percent from the same time last year. Houston’s median is 30.3 percent less than the nation’s, which reached $215,300 in March, the latest number available.
Total property

Update on Friendswood’s West Ranch – Roads are being paved and sewer systems installed on this new residential development on FM 518, north and south sides. It’s expected that builders for the 1,500 homes will move sales trailers on property very soon as the opening is March, 2007. A 23-acre Village Center (fine dining and shopping) is part of the 80-acre commercial development and this will start end of 2007. Project build-out is seven to eight years.

Plans have surfaced for Seabrook’s new waterfront development – a 99-unit condominium complex on The Point. The eight-story building will be located at the intersection of Todville Road and Tenth Street on the northeast edge of the peninsula. A conditional-use permit has been approved by the City. Amenities planned are a plaza level for tennis, racquet ball, volleyball, a pool, and club house facilities (gym and media room), all above the 208-space parking garage. Gazebos and extensive landscaping will compliment the Mediterranean-designed structure. Residential units will start on the 3rd level.

Armandwilde – The second phase of the Mediterranean-style townhome project will be built on Space Center Boulevard in Pasadena. Twenty-seven units will be added to the 25 already built .. ranging in size from 2,200 SF to 3,200 SF and priced into the $400’s.

Kemah – Still under review is a project that might bring high-rise residential construction to the city’s FM 2094/waterfront area.

Borden’s Gully – 64 home sites on FM 517 and Borden’s Gully Drive in Dickinson. Price range: $180’s up.

Pasadena’s new towers! The Endeavour Clear Lake on NASA Parkway is taking shape as construction has reached the 14th floor with the top level of the 30-story building scheduled to start in December. Just down the street, demolition crews have cleared the way at the former Parkside Marina for the new Endeavour Parkside, the 34-story tower. Units for this one start at 900 SF / one bedroom to 6,400 SF / four bedroom. Prices range from the $300’s to $3 million.