Foreclosures Pull Houston Home Prices Down Again in February

HOUSTON — (March 17, 2009) — February marked another month of sagging real estate and pricing for the greater Houston area, following to a milder degree the trends that have played out around the country since the recession began more than a year ago.  Overall, February property sales fell 25.9% compared to February 2008, and sales of single-family homes declined by 24.6%, according to new monthly data compiled by the Houston Association of REALTORS® (HAR).

The average price of a single-family home in Houston dropped 10.5% last month to $182,316 compared to February 2008.  At $138,970, the median price* of a single-family home in February fell 8.0% year-over-year. (*The median price represents the figure at which half of the homes sold for more and half sold for less.)  February marked the fifth consecutive month of price declines.

Sales of foreclosed properties, which typically sell below market prices, continued to place a drag on home prices last month.  In February 2009, foreclosures made up 28% of all single-family home sales in the Houston area compared to 22.6% one year earlier.  Although, that is an improvement from January's 34% share of single-family home sales consisting of foreclosures.  Part of that is attributed to a 23% month-over-month increase in overall property sales..

The median price of foreclosure sales reported in the MLS tumbled 15% from $94,000 to $79,000 on a year-over-year basis.  The median price of traditional, non-foreclosure single-family homes dropped just 1.2% from $167,000 to $165,000.

Sales of all property types in Houston for February totaled 3,995, off 25.9% compared to February 2008. Total dollar volume for properties sold during the month was $710 million versus $1.0 billion one year earlier, a 33.4% decline.

Demand for rental properties rose again in February, with leases of single-family homes up 4.3% on a year-over-year basis and leases of high-rise units up 192%.  The 192% tends to be more variable because of the comparatively small number of units involved.

Quoting HAR Chair, Vicki Fullerton, "Passage of the economic stimulus package will by no means trigger a home buying frenzy, but eliminating the repayment provision in the first-time home buyer tax credit will help bring buyers to the market and further reduce housing inventory."  Click here for a comprehensive Q&A about the $8,000 tax credit.

February Monthly Market Comparison

The month of February brought Houston's overall housing market negative results when all listing categories are compared with February of 2008.  Total property sales and total dollar volume fell, as did average and median single-family home sales prices.  However, the number of available properties (active listings) at the end of February fell 12.8% from February 2008 to 44,747.  That is 569 more active listings than January 2009, an indication that inventory levels remain balanced.

Month-end pending sales -- those listings expected to close within the next 30 days -- totaled 3,227, which was 25.4% lower than last year and suggests the likelihood of a further decline in sales for March.  The month's inventory of single-family homes for February came in at 5.9 months, down 2.8% from one year earlier.  The national month's inventory of single-family homes is approximately 10 months, according to the National Association of REALTORS® (NAR).

All Categories February 2008 February 2009 Percent Change
Total property sales 5,388 3,995 -25.9%
Total dollar volume $1,065,425,047 $709,907,442 -33.4%
Average single-family sales price $203,797 $182,316 -10.5%
Median single-family sales price* $151,000 $138,970 -8.0%
Total Active listings 51,308 44,747 -12.8%
Total Pending sales 4,323 3,227 -25.4%
Months inventory** 6.1 5.9 -2.8%

  * The median price is determined by half of the homes sold for more and half sold for less.

** 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.

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