Strengthening job creation and home buying demand merged in July to heat up Houston’s already red-hot real estate market.
Sales of single-family homes in Houston totaled 6,324, up 27% from July 2011, marking the city’s 14th straight monthly increase and representing the largest one-month jump in single-family home sales since August 2011, according to the Houston Association of Realtors.
"Sales volume isn't achieving the record levels we experienced in 2006, before the recession, but you'd be hard-pressed to find a market performing as well as Houston, even as the national housing recovery continues,” said HAR Chairman Wayne Stromany. “Houston's steady employment growth remains a key driver."
Houston’s job growth is outperforming the rest of the nation, according to Comerica Bank's latest Regional Economic Update. The Houston-Sugar Land-Baytown area’s payroll job creation rose 3.4% in the second quarter from the year-ago period, the faster than any major metropolitan area in the nation, Comerica said.
After registering a 6.9% unemployment rate in the second quarter, Houston is expected to record 6.8% in the third quarter and 6.5% in the fourth quarter. Comerica forecasts Houston’s overall unemployment rate will tumble to 4.4% in 2014.
Both average and median home prices increased in July. The single-family home average price is 3.7% above year-ago levels at $231,484, the highest level for a July in Houston and the third highest price of all time. (Click on chart below.) The median price rose 6.3% to $170,000, matching June's revised record high.
Existing home sales stood at 5,478 in July, up 28.8% from a year earlier. The median sales price increased 6.7% to $160,000, slightly below the record median price of $161,710 achieved in June.
The National Association of Home Builders added Houston to a list of 84 markets across the nation showing measurable and sustained improvement in their housing market.
"The thing that got (Houston) on the list finally was the house prices," said David Crowe, chief economist for the NAHB. "(It) had sufficient growth in permits and employment to have made the list, but the list requires growth in all three."
July sales of all property types in Houston expanded 24.6% to 7,363 from a year earlier. And total dollar volume for properties sold during the month ballooned 29.9% to $1.6 billion versus $1.3 billion in July 2011.
The robust sales activity is keeping local housing inventory at its lowest level in more than five years. The city's 5.3 months inventory of single-family homes remains at the lowest level in more than five years, comparing favorably to the national average of 6.6 months.