Gary Greene's Real Estate Blog

Houston Housing Affordability Highest Since 2004

Posted on January 13, 2009
Houston housing is currently the most affordable it has been since 2004. The affordability index graph below measures housing affordability for the Houston Metropolitan region.  The higher the number the more affordable our housing is.  From 12/2007 to 11/2008, the average HAI for Houston has been 150, meaning that the median household income was 150% of the necessary income to qualify for the median priced home under prevailing interest rates.  In November 2008, the HAI reached 169 and if interest rates continue to trend downward, that figure could go higher. Houston unemployment is at 5.5% - much better than national levels and a fairly healthy figure. 

While Houston is not immune to the national economy, it is precisely this type of market when those that invest in homeownership can see appreciation over the long run.  A recent review of national web site traffic viewing homes in Houston indicates that Houston's future potential is no secret and the world has its eye on Houston.
 


















Houston Real Estate Market Statistics and Yearly Comparisons

Who could have predicted a mortgage meltdown, a national financial and economic crisis and a devastating hurricane could all occur in one year?
2008 is a year many would like to forget and yet throughout 2008, Houston came very close to matching sales found in 2005.
 
We often look at 2005 as the beginning of a very positive real estate trend in Houston.  Home sales reached levels that were the best experienced historically and every metric was positive.  Home sales continued an upward trend from 2005  until the third quarter of 2007.  When 2007 showed signs of slowing, many prognosticators felt Houston would return to 2005 sales levels in 2008.
 

Houston Single-Family Real Estate Market

2008

      % Change

2005

% Change

 

 

from 2007

 

from 2005

#Sales Year-to-Date through December 2008

58,594

-16%

64,821

-10.60%

Dollar Volume Sales

$12.2B

-15%

$12.2B

0

Average Sales Price

$208,266

1%

$188,221

10.64%

Median Price

$152,000

0%

$142,000

7%

Average Days on Market

85

9%

82

0.0365

Pending Contracts

38,792

-17%

44,149

-13.80%

Number of Listings

30,167

-15%

30,346

-0.05%

Summary of the market:

·        While sales are down 16% from last year and down 10.6% from 2005, the dollar volume of sales is the same as 2005. 

·        In 2008, average sales price is up 10.64% over 2005.

·        The median price of a home is up by 7% over 2005.

·         It takes 3 more days on average to sell a home today than it did in 2005.

  • ·        One of the most positive signs in real estate is that there are fewer single-family listings than those found in 2005.  Not only are listings down by 15% from 2007, they are also down from 2005 levels.  This places the market in a healthy supply and demand position that most national markets would envy.
     Although Houston fell short of 2005 sales levels, the majority of homeowners were better off owning their homes from 2005 to the present. Houston home values have weathered a hurricane and a national downturn far better than one's stock portfolio.  
 
     There is no question that some parts of Houston have experienced pockets of decline in areas stricken with foreclosures however, there are also areas of Houston that are in high demand and are appreciating.  And the market still shows no overall decline in home values.  As we enter 2009, it is hard to predict what the world will bring to Houston's door step, but the city enters 2009 in a far better economic position than the nation.  

 *Housing Affordability Index and Houston Market Statistics provided by HRIS, Inc. and written by Toni Nelson, Director of Strategic Initiatives for Prudential Gary Greene, Realtors
 

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