Largest Decline in Home Sales in More Than a Decade; Prices Hold Up
HOUSTON — (October 16, 2007) — Houston had been hailed as one of the few markets in the country that had weathered the real estate downturn seen in most of the rest of the country—until September. It is normal to see a slowdown in real estate sales after summer has ended, but the decline in sales experienced last month was the largest in more than a decade for the greater Houston area. From a historical perspective, Houston remained ahead of 2005 in terms of sales and pricing and its inventory of homes relative to sales is still well below the past 10 year average.
Total property sales for the month registered 5,984, which was a 16.7 percent decrease versus September 2006. Properties sold during the month reached a total of more than $1.2 billion, an 11.9 percent decrease compared to last year’s nearly $1.4 billion in September sales. Additionally, the median home price for a single-family home reached $150,500 for September, and the average single-family home price came in at $202,963, a rise of 0.3 percent and 2.0 percent, respectively.
“Unfortunately, the subprime and foreclosure issues have spread beyond the boundaries of the $80,000 to $150,000 price range. As people who were relying on the sale of their home in that price range have been unable to find buyers for their homes, the sellers have been unable to move up to the next price range, which is reflected in the latest home sales figures, “ said Rob Cook, HAR Chairman and broker/owner of Robert D. Cook Properties. “As we move into the fourth quarter of 2007, the Houston real estate market is experiencing weakness, but it remains much better off that the national numbers that have been reported and are being forecast. Sales prices are holding up, and the mortgage adjustments will have to work through the system before Houston home sales likely stabilize again.”
September Monthly Market Comparison
All listing categories combined, Houston’s overall housing market in September saw mixed results, with increases in median sales price and average sales price on a year-over-year basis. A significant decline was seen in both total property sales and total dollar volume. Total year-to-date properties sales were down 2.9 percent.
The number of available homes (active listings) at the end of September was 53,718 properties, which was an increase of 15.5 percent versus last September and the 15th month with a year-over-year increase, after 10 consecutive previous declines. The figure was an increase of about 300 properties from last month, which shows the pace of new listings has slowed. It is still a figure to watch to see if inventory of available homes rises faster than sales, which could eventually place downward pressure on prices as well, especially with the foreclosures in this market.
Month-end pending sales – those listings expected to close within the next 30 days – reached 4,162, which was down 11.3 percent from last year and signals possible continued weakness in sales next month after recent volatility in sales figures. The months inventory of single-family homes for September came in at 6.3 months, which is the seventh consecutive year-over-year increase and does signal that new listings are outpacing sales, but still remains more of a seller’s market.
Single-family Homes Update
The overall median price of single-family homes of $150,500, while a scant increase of 0.3 percent versus the same month last year, is still one of the 10 highest median sales prices in Houston history, but the figure did drop 5.3 percent from August. This is a somewhat larger than typical decline, even as sales prices tend to drop after the end of summer. The average sales price for single-family homes was $202,963 during September, which was up a slight 2.0 percent versus the same period last year and was the lowest figure since February earlier this year.
Houston’s current median price of $150,500 is 32.8 percent less than the national median price, which reached $223,900 in August, according to statistics released by the National Association of REALTORS®. These data continue to show the tremendous value and lower cost of living afforded to Houstonians.
Additionally, total sales of single-family homes in Houston in September came in at 5,061, which was 15.1 percent lower than September 2006 and the largest decline since April 1995. Year-to-date sales of single-family homes remain negative this month, down 2.0 percent versus the first nine months of 2006. While we are three-quarters of the way through 2007 and still too early to tell for certain, Houston has not experienced an overall yearly decline in more than a decade so this is something to watch as we end the year. The National Association of Realtors’ current estimate for national home sales is for a 10.8 percent decline in 2007 versus 2006. Houston should continue to hold up much better than that though.
HAR also reports existing home statistics for the single-family home segment of the real estate market. For the month of September 2007, existing single-family home sales totaled 4,211, which was a 14.1 percent decrease from September 2006. The median sales price for existing homes in the Houston area was $142,500, a 0.4 percent increase compared to the same period last year. The average sales price for the month of $189,872 was an increase of 1.0 percent from last year’s level.
The Days on Market statistic for September was 79 days, which was higher than the 73 days in September 2006, but remains historically low and shows that the homes that are selling are selling fairly quickly.
Townhouse/Condo Update
The overall median price in the townhouse/condo segment in Houston was flat for September, with the median sales price for the month being $125,000. The average sales price for which a townhouse or condo sold in the greater Houston area was $162,896 in September 2007, which was a 3.5 percent increase from the same month last year.
Additionally, the number of townhouses and condos that sold in September reversed its one-month increase last month, after three consecutive monthly declines in a row compared to the previous year’s sales. In the greater Houston area, 497 units were sold in September, versus 635 properties in September 2006, or a sizable 21.7 percent decrease in year-over-year sales.
Houston Real Estate Milestones in September
One of the 10 highest months for the median single-family sales price in Houston
Largest decline in home sales in more than a decade
