Sales of single-family homes in the Houston area were 25.1 percent lower this July than last, according to HAR data released this week. Swamplot’s occasional home-sales correspondent writes in with a few illustrated comments:
Certainly 25% is an eye catching number but everyone saw it coming with the expiration of the tax credit. . . . This lower volume comes in the middle of a strong April-August selling season, and lower pending sales means we will have another weak month to report for August.
The good news (for homeowners and sellers): home prices haven’t fallen!
Color me impressed (errr…wrong) on pricing trends. Home prices have held up really well in Houston . . . The chart [above] shows this trend. Keep in mind, prices always peak in the summer, so as temperatures cool, so will home prices.
Sales of homes priced between $150K and $250K dropped 35.0 percent. But high-priced home sales suffered too: Sales of homes above $500K dropped 22.7 percent.
These are homes that are NOT really influenced by the $8,000 tax credit. I have been arguing for a long time that the high end market in Houston is actually much worse than the market for moderately priced homes. Builders have been building giant houses for years and they are languishing . . .
Speaking of which, [here’s a chart showing the] total number of HAR active listings:
This 25% reduction in demand — which may last for many months if not years — is going to have to swallow the most bloated inventory in Houston history. I know I sound like a broken record, but home prices are headed lower in the Fat City as price always follows volume.