Houston Home Prices Hit an All-Time High in June

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Houston home sales rose for the second time this year in June, with the average price reaching an all-time high and the median price achieving the highest level in nearly two years. The sales increase reflects the slowdown in home purchases that set in a year ago following expiration of the home buyer tax credit. The credit triggered a surge in home buying during the spring of 2010 that resulted in slower sales volume during the remainder of that year.

According to the latest monthly data compiled by the Houston Association of REALTORS® (HAR), June sales of single-family homes edged up 0.6 percent versus one year earlier. That represents the first increase since January when sales volume rose 8.4 percent. The under-$80,000 segment of the market as well as homes priced from $250,000 and above experienced increased sales while the popular middle range, consisting of homes priced between $80,000 and $250,000, saw declines. Compared to June of 2009, a year with no unusual market factors such as Hurricane Ike in 2008 and the 2010 tax credit, single-family home sales were up 2.7 percent.

“We see the effects of the 2010 tax credit in the June Houston real estate market report in the form of a drop-off in sales that took place a year ago once the credit expired,” said Carlos P. Bujosa, HAR chairman and VP at Transwestern. “We expect these credit-skewed readings to taper soon, providing us with a more accurate gauge of market performance, but in the meantime, we are thrilled to see sustained home price appreciation.”

The average price of a single-family home rose 3.7 percent from June 2010 to a record high of $228,650. The June single-family home median price—the figure at which half of the homes sold for more and half sold for less—increased 2.2 percent year-over-year to $161,000. That is the highest median price since July 2009. Foreclosure property sales reported in the Multiple Listing Service (MLS) decreased 3.2 percent in June compared to one year earlier.

Foreclosures comprised 18.7 percent of all property sales, down from 19.8 percent in May, 22.0 percent in April and 23.5 percent in March. The median price of June foreclosures declined 7.5 percent to $81,000 on a year-over-year basis.

June sales of all property types in Houston totaled 6,520, down 0.2 percent compared to June 2010. Total dollar volume for properties sold during the month increased 3.3 percent to $1.43 billion versus $1.38 billion one year earlier.

The month of June brought Houston’s overall housing market largely positive results when all sales categories are compared to June of 2010. However sales volume gains for the month were skewed by the 2010 tax credit that affected a decline in home sales one year ago after it expired. Total property sales declined fractionally while total dollar volume rose on a year-over-year basis. The average price reached a record high while the median price recorded its highest level since July 2009.

Month-end pending sales for June totaled 3,872, up 18.3 percent from last year. While not as high as the 35.4 percent increase recorded in May, the rate is considered higher than what is typically seen this time of year and is considered an ongoing reflection of the rapid pace at which 2010 sales went under contract in advance of the tax credit closing deadline.

The number of available properties, or active listings, at the end of June dipped 4.8 percent from June 2010 to 51,342. The inventory of single-family homes rose to 7.9 months compared to 7.3 months one year earlier. That means that it would take 7.9 months to sell all the single-family homes on the market based on sales activity over the past year. The figure still compares favorably to the national inventory of single-family homes of 9.3 months reported by the National Association of REALTORS® (NAR).

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