At year-end, national unemployment was down from 8.5 % to 8.3%. Economists estimate the rate will stagnate in January at 8.5%. Our U.S economy now churns more production than when things started going south in 2007, however, the increased production happens with 6 million fewer workers. Because of our petroleum connection, Houston area year-end unemployment was 7.3%.
In Houston, TX, housing listing inventory is down from a year ago of 12,851 units to 9,730 houses. In the last eleven months, added new monthly listings have averaged 3,309 units per month. Seasonally, January is a blah month and this year was no exception. We added only 3,148 listings. Last March, Houston added 4,141 new listings. At the end of January, 2012, the median list price was $145,000.00, median days on the market was 89 and the median size of a listing was 1,921 SF.
In Houston subdivisions where there are high levels of foreclosures, prices are being driven down by investors. In December, 2011, 33% of the foreclosure buyers were cash buyers – a new record. 74% of investors use all cash. Cash buyers are able to bid significantly lower than prices offered by loan assisted buyers – 10% to 20% lower. Cash buyers are able to avoid the pitfalls of the mortgage loan application and appraisal process, so sellers are more willing to cooperate with cash buyers.
It is a great time to buy or sell your property. The high national debt and improved unemployment figures will bring on higher interest rates but, for now, home purchase lending interest rates are still very low, hovering in the 3 7/8% to 4 3/8% range.
All the above directly affects consumer confidence, and consumer confidence drives residential buying and selling. After having increased in November and December, 2011 to 64.8, the Consumer Confidence Index retreated to 61.1 in January – business and labor market conditions turned more downbeat and January is never a great month for housing.
Call if you have any questions or if you want to buy or sell your home. We look forward to hearing from you.
