When you first review the single-family residential market for January 2010, you might think everything you learned in Economics 101 is irrelevant. How do you have fewer home sales, fewer contracts written and higher average and median sales price in comparison to last year? The answer is in the price classes of homes that closed during the month. Homes priced above $500,000 experienced double-digit declines last year, except for the $800,000-$899,999 price class which saw a 1% increase in number of homes sold.
Now comes January 2010, and all price classes above $500,000 are in double-digit increases. There are 2 exceptions: $700,000-$799,999 price class experienced a 9% decline over last year and $800,000-$899,999 price class experienced a 117% increase, the highest increase of all price classes. That is perplexing – a price class just below a higher price class experiences a decline while the price class above breaks all records. Go figure. There were also 19 homes that sold for over a million giving that price class a 27% increase over sales the previous year.
All sales in January priced over $500,000 represented only 5% of the total units sold in Houston, however the impact these price classes sold had on average sales price and median sales price make it appear that there is home price appreciation in the Houston overall market. Houston is so large, it is like a mosaic. Some areas are shining brightly while others are not as lustrous. For a breakdown of activity by area with a map, go to http://garygreene.mediaroom.com/index.php?s=38&cat=14.
- A 12% decline in single-family homes or a total of 2,514 sales.
- A 4% increase in dollar volume sales for a total of $488,103,156.
- An 18% increase in average sales price which is currently $194,154.
- Days on the Market [DOM] – the time it takes on average to sell a single-family home in Houston declined 16% and is currently 80 DOM.
- Pending sales dropped 17% for a total of 2,301 contracts written.
- Current listings are down 1% for a total single-family listing count of 27,465.
Prudential Gary Greene, Realtors® believes the housing market will pick up steam as we approach the Spring selling season for 2 reasons:
- The IRS Home Buyer Tax Credit benefits both current homeowners as well as first-time home buyers and expires on April 1. To see if you qualify, go to
http://www.realtor.org/home_buyers_and_sellers/2009_first_time_home_buyer_tax_credit
2. Interest rates are at an all-time low and when these two benefits coincide, the result is a flurry of buying activity that will culminate before April.
This will spark demand through April, but what about the rest of the year? While Houston lost jobs in 2008-2009, most economic experts anticipate the job growth to return to pre-recession levels beginning this year and extending into the entire 2011. Jobs, more so than tax credits and low interest rates are the biggest driver of home sales.
Previously, we mentioned the rise in upscale homes as a rationale for a rise in average and median price in the overall Houston market for January 2010. These were attributable to only 5% of all sales in Houston.
What home price classes were the hottest selling in Houston in January 2010?
The following table indicates by price class the hottest selling price ranges in Houston in 2010:
|
Top Ten Selling Price Classes Houston Single-Family Real Estate The Year 2010 |
|||
|
Price Class |
Sales Year to Date |
Active Listings |
Months of Inventory |
|
1. $200,000-$249,999 |
216 |
2,708 |
5.8 |
|
2 $250,000-$299,999 |
179 |
2,171 |
6.7 |
|
3. $300,000-$399,999 |
157 |
2,429 |
7.4 |
|
4. $120,000-$129,999 |
138 |
1,409 |
5.5 |
|
5. $130,000-$139,999 |
131 |
1,281 |
4.9 |
|
6. $110,000-$119,999 |
129 |
1,362 |
5.9 |
|
7. $80,000-$89,999 |
122 |
1,082 |
5.9 |
|
8. $90,000-$99,999 |
117 |
1,195 |
5.9 |
|
9. $160,000-$169,999 |
116 |
1,073 |
5.5 |
|
10$70,000-$79,999 |
104 |
800 |
5.2 |
As you can see from the Top Ten Selling Price Classes in Houston for 2010, hot selling prices ranged from $70,000-$399,000. These price classes and homes priced up to $800,000 are expected to be hot in Houston in 2010. Why? The 2010 IRS Home Buyer Tax Credit expanded to include houses priced up to $800,000.
