Is Houston’s housing market resilient?

Small signs of improvement

Wendy Natt, May 01, 09.

The median sale price for single-family homes in Houston in March 2009 was $145,000, reflecting a 4.4 percent decline from prices in March 2008, according to the Houston Association of Realtors. This is the smallest decrease since last October, when the median took a negative turn, according to HAR figures. The Association noted that if sales of foreclosed homes are excluded from the calculation, the median price is “flat at $168,000,” with no decrease or increase, since last year.

Slowing home depreciation was accompanied by a slowing in the decline of home sales in March. According to the Greater Houston Partnership (GHP) publication Economy at a Glance (pdf), which reported on these updated figures, “HAR attributes this year’s boost in March sales to record low interest rates, the $8,000 credit for first-time buyers and an increase in consumer confidence.”

Single-family home sales were a major topic of discussion at the April 29 Urban Land Institute’s monthly luncheon meeting, titled “Houston’s Resilient Housing Market.” At the meeting, Mike Inselmann, co-founder of MetroStudy, noted that [non-new] home values in Texas cities, including Houston, are remarkably stable across time compared to the highly volatile fluctuations seen in most other major markets in the South and Southwest.

Inselmann noted that “Houston, by far, is the most active big [housing] market in the country,” and that its MLS inventory is “in good shape,” at close to a 6-month supply. However, he notes that single-family home sales are still falling in Houston, albeit more slowly, and that consumer fear and more stringent loan qualifications are keeping people from buying.

The rental market in Houston, he says, now houses a larger proportion of the region’s population than at any other time, and that many would-be single-family home owners are renting houses instead of buying.

(Photo credit: seven twenty five)

See the April 30 Houston Economic Indicators (pdf) report from GHP for the their latest HAR figures.