Houston Single-Family Home Sales Edge Up in June as Effects of Homebuyer Tax Credit Wane

Closings of properties purchased through the federal homebuyer tax credit combined with the seasonal spring-summer uptick in consumer activity kept Houston-area single-family home sales in positive territory for a fourth straight month in June. However, expiration of the homebuyer tax credit slowed the brisk pace of sales volume that the market enjoyed in recent months.

Congress extended the time necessary to close on homes purchased with the tax credit by three months to September 30, provided the property was under contract by April 30. The May and June decline in pending sales—property listings that are expected to close within the next 30 to 60 days—was expected, as homebuyers rushed to take advantage of the tax credit and is considered an indicator that sales volume will slow in July.

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.

“The Houston real estate market has benefited all that it can from the homebuyer tax credit and now comes the return of sales trends that are more typical for this time of year,” said Margie Dorrance, HAR chair and principal at Keller Williams Realty Metropolitan. “Heavy sales activity in the high end of the housing market boosted the average price in June, but growing inventory, an increase in months inventory and a slowdown in listings under contract point to a more flattened market in the coming months.”

June Monthly Market Comparison
The month of June brought Houston’s overall housing market largely positive results when all listing categories are compared to June of 2009. Total property sales and total dollar volume increased on a year-over-year basis while the average single-family home sales price ticked up and the median price declined.

Categories June 2009 June 2010 Percent Change
Total Property Sales 6,332 6,593 4.1%
Total Dollar Volume $1,347,610,333 $1,413,393,916 4.9%
Total Active Listings 45,989 53,934 17.3%
Total Pending Sales 3,896 3,272 -16.0%
Single-Family Home Sales 5,425 5,584 2.9%
Single-Family Average Sales Price $220,802 $222,767 0.9%
Single-Family Median Sales Price $164,500 $159,700 -2.9%
Single-Family Months Inventory* 6.4 7.3 14.5%
*Months inventory estimates the number of months it will take to deplete current active inventory based on the prior 12 months sales activity. This figure is representative of the single-family homes market

The number of available properties, or active listings, at the end of June rose 17.3 percent from June 2009 to 53,934. That represents 2,749 more active listings than one month earlier, in June 2010, and reflects additional housing inventory that began hitting the market as a result of interest in the homebuyer tax credit as well as general confidence in improved market conditions.

Month-end pending sales for June totaled 3,272, down 16.0 percent from last year. This is a likely indicator that the effects of the tax credit have worn off. The months inventory of single-family homes for June extended to 7.3 months compared to 6.4 months one year earlier, but remains healthier than the national months inventory of single-family homes of 8.3 months, reported by the National Association of Realtors® (NAR).

Single-Family Homes Update
June sales of single-family homes in Houston totaled 5,584, up 2.9 percent from June 2009. This marks the fourth consecutive month of accelerated sales activity. Broken out by segment, June sales of homes priced from $80,000 and below increased 7.1 percent; homes priced between $80,000 and $150,000 rose 9.6 percent; those in the $150,000 to $250,000 fell 8.0 percent—representing the only decline in sales volume; and homes priced between $250,000 and $500,000 edged up 1.3 percent. Sales of luxury homes—those priced from $500,000 to the millions—reflected the greatest gains, increasing 20.3 percent.

Single Family Home Sales
Single Family Average Home Price & Single Family Median Home Price

The average price of single-family homes in June was $222,767, up 0.9 percent compared to one year earlier. That is the highest pricing level since July 2008. At $159,700, the median sales price for single-family homes slid 2.9 percent versus June 2009. That is the highest price since August 2009. The national single-family median price reported by NAR is $179,400, illustrating the continued higher value and lower cost of living that consumers enjoy in the Houston market.

HAR also breaks out the sales performance of existing single-family homes throughout the Houston market. In June 2010, existing home sales totaled 4,753, a 2.8 percent increase from June 2009. The average sales price edged up 1.5 percent to $209,510 compared to last year while the median sales price of $148,000 declined 4.5 percent from its June 2009 level.

Townhouse/Condominium Update
The number of townhouses and condominiums that sold in June rose 4.6 percent compared to one year earlier. In the greater Houston area, 527 units were sold last month versus 504 properties in June 2009.

Townhouse/Condominium Sales

The average price tumbled 5.0 percent to $161,809 from June 2009 to June 2010. The median price of a townhouse/condominium fell 4.7 percent year-over-year to $137,000.

Lease Property Update
Demand for single-family home rentals rose 21.0 percent in June compared to one year earlier. Year-over-year townhouse/condominium rentals increased 22.7 percent.

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.