Houston’s Luxury Home Market Gets a Boost in January

Surge in sales of homes priced $500K and above promotes double-digit price appreciation

HOUSTON — (February 16, 2010) — The Houston real estate market opened 2010 with a mixed bag of readings, making it difficult to determine a clear direction for the months ahead.

January sales of single-family homes across the greater Houston area slid 12.3 percent compared to January 2009, according to the latest monthly data compiled by the Houston Association of REALTORS® (HAR). When broken out by segment, sales of single-family homes priced from $500,000 and above showed dramatic gains in January while sales of homes on the opposite end of the spectrum, those priced from $80,000 and below, fell. Sales of all property types declined 7.4 percent in January on a year-over-year basis.

At $144,500, the January single-family home median price—the figure at which half of the homes sold for more and half sold for less—rose 11.9 percent from one year earlier. That represents the ninth consecutive monthly increase in median price as well as the highest Houston median recorded in a January. The average price of a single-family home appreciated for the fourth straight month, reaching $194,154, up 18.4 percent versus January 2009. That figure also represents the highest for a January in Houston.

Foreclosure property sales reported in the Multiple Listing Service (MLS) fell by 30.1 percent in January compared to one year earlier. The median price of January foreclosure sales rose 4.6 percent to $84,750 on a year-over-year basis.

Sales of all property types in Houston for January totaled 3,049, down 7.4 percent compared to January 2009. Total dollar volume for properties sold during the month was $565 million versus $535 million one year earlier, representing a 5.6 percent increase.

“Several overlapping factors influenced the Houston housing market as the new year began,” said Margie Dorrance, HAR chair and principal at Keller Williams Realty Metropolitan. “These include both the first-time homebuyer tax credit and the expanded credit for existing homeowners, which may have prompted more listing activity. Strong sales activity in the higher-end single-family home segment also contributed to an overall higher average sales price for the Houston market. We hope to see both sales and pricing continue to reflect a robust real estate market as the April 30 tax credit deadline approaches and we enter the traditionally busy spring homebuying season.”

January Monthly Market Comparison

The month of January brought Houston’s overall housing market mixed results when all listing categories are compared to January of 2009. Total property sales declined while total dollar volume and both median and average single-family home sales prices rose on a year-over-year basis.

The number of available properties, or active listings, at the end of January edged up 2.3 percent from January 2009 to 45,210. That represents 2,025 more active listings than one month earlier, in December 2009, and is thought to reflect increased activity stemming from the homebuyer tax credit that expires on April 30.

January’s month-end pending sales—those listings expected to close within the next 30 days—totaled 2,783, down 13.5 percent from last year. That suggests there will likely be another sales decline when the February numbers are tallied. The months inventory of single-family homes for January inched upward to 6.1 months compared to 5.7 months one year earlier, but remains better than the national months inventory of single-family homes of 7.2 months, reported by the National Association of REALTORS® (NAR).

Single-Family Homes Update

January sales of all single-family homes in Houston totaled 2,514, down 12.3 percent from January 2009. This is the Houston market’s second consecutive monthly decline in sales. However, broken out by segment, sales of single-family homes priced between $250,000 and $500,000 jumped 21.6 percent in January while sales of luxury homes—those priced from $500,000 to the millions—surged 40.0 percent. By contrast, sales of homes in the below-$80,000 segment fell 28.9 percent and those priced between $80,000 and $150,000 slid 19.3 percent.

Heightened sales activity in the higher end of the housing market drove pricing up in January. At $144,500, the median sales price for single-family homes rose for the ninth consecutive month, up 11.9 percent from January 2009. That’s its highest median for a month of January in Houston. The national single-family median price reported by NAR is $177,500, illustrating the continued higher value and lower cost of living that consumers enjoy in the Houston market. The average price of single-family homes in January was $194,154, an increase of 18.4 percent from one year earlier. That represents the fourth straight monthly jump in the average price and the highest for a January in Houston.

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