Houston housing market holding up

Houston may be about the only major housing market in the country that is still holding up and not plunging wildly. While the number of home sales are down, the median price is increasing. If we can all just hold onto our jobs...

...and Bush needs to just STFU and get the hell out of town. The markets need to fully realize that this disastrous punk is headed out the door, and he'd better not drop a few bombs (on Iran) on his way out. I've never seen such a partisan political hack as Bush in my time on Earth. Everything is political with him, while claiming it's not. And thinking back on all the lies he told to get elected, and all the wool he pulled over honest conservatives eyes, it's disgusting. Yes, Virginia, there are some honest conservatives (a few), but Bush has (hopefully) poisoned the well for conservatives so badly that the Democrats will likely have a landslide and a long reign.


Area home sales decline for 10th straight month

While home prices in other big cities continue to take their lumps, the Houston area is holding its own.

The median home price reached a high point in June, rising 1.3 percent to a record $162,000, according to the Houston Association of Realtors.

Compare that to the results of a recent survey, which showed price declines in all 20 metropolitan areas it tracks.

"We're not in a fire-sale kind of market," said Steve Barnes, president and chief operating officer for the Houston region of Coldwell Banker United, Realtors. "People don't have to sell at any price."

There was one sour note, according to the Realtors: Sales fell for the 10th month in a row.

No one can point to a single or dominant reason, but experts say prices have stayed on an even keel because they never saw rapid price appreciation in the first place. And Houston continues to benefit from a strong energy economy that's fueling a vibrant relocation market.

Area home sales, which have been dropping since the fall and were off 15 percent last month, are returning to levels seen earlier this decade when the market was considered healthy.

Still, demand has slackened as the local market continues to feel the effects of tougher lending standards and skittish consumers worried about the economy.

As a result of the subprime mortgage meltdown, lenders have been requiring borrowers to provide extensive income documentation and put more money down for a home loan.

And banks have started reacting to the recent financial woes of mortgage giants Fannie Mae and Freddie Mac.

"With the episode over the weekend, a lot of lenders are backing off making loan commitments until they know if they can sell them themselves," said economist Jim Gaines of the Real Estate Center at Texas A&M University.

Even though sales were down last month in all price categories except the very lowest, real estate agents who work in close-in, high-end neighborhoods, and those near the city's cluster of energy companies, said business is brisk.

"Relocation activity is huge right now," said Amy Bernstein of Bernstein Realty.

Housing inventory in places like Tanglewood, Memorial and Katy is down, causing prices to rise, she said.

Last week, Natalie Costello and her family closed on a four-bedroom house in the Memorial subdivision of Frostwood.

Costello, a senior finance manager for BP, is being transferred here from the Chicago area. She considers herself lucky because she was able to sell her house there within a month.

"We are moving from an area where the real estate market has softened considerably to an area where the market is really robust," she said.

Foreign buyers investing

According to the most recent Standard & Poor's/Case-Shiller home price index, all 20 metropolitan areas tracked posted annual declines, as prices rolled back to levels last seen in August 2004.

The index, which does not include Houston-area data, fell by 15.3 percent in April versus a year ago.

Not only are relocations fueling sales, but foreign buyers from Asia, Mexico and the Middle East are investing here because the dollar is so favorable from their perspective, said Beth Wolff of Beth Wolff GMAC Real Estate.

"More expensive homes in better neighborhoods have held their value," she said.

But the overall decline in sales isn't likely to end soon.

At the end of June, the number of listings expected to close within the next 30 days was down 21 percent, signaling another drop, according to the realty association, which tracks properties sold through the Multiple Listing Service.

Sales of homes priced between $80,000 and $150,000 fell the most last month. Once largely driven by subprime lending, that segment of the market dropped 25 percent.

One segment doing well

"We're not out of the woods," Michael Levitin, the association's chairman and principal of HTownRealty.com, said in a statement. "However, the Houston real estate market continues to show positive indicators that others around the country consider enviable."

One segment of the market posted exceptionally strong gains in June.

Sales of homes priced below $80,000 were up 29 percent.

That could be the result of an influx of investors buying low-cost homes here to rent to those who can't qualify for mortgages.

HomeVestors of America, a national franchise that specializes in trading real estate, said Houston was the second-best U.S. market for property investing in the second quarter of the year. Dallas was ranked highest.

The story, with charts and graphs, can be found here.