Houston’s Real Estate Recovery
Recent statistics from the Houston Association of Realtors (HAR) shows home sales on the increase for the tenth consecutive month. In March 2012, with 4,996 Houston home sales closed, sales grew by 7.8 percent over 2011. Home prices also increased by the same percentage, from a median sale price of $150,000 in March 2011 to $161,740 in March 2012.
HAR reports the number of foreclosure transactions declined 12.8 percent compared to March 2011. Foreclosures, as a percentage of home sale transactions, have fallen to 19.6 percent—down from 21.1 percent over the past year.
According to the Third Quarter 2011 ACCRA Cost of Living Index, of the 27 metropolitan areas with a population base of 2 million or more, Houston offers the lowest overall cost of living—with housing expenses, an average of 36 percent lower compared to the other 26 regions measured in the index.
The Federal Housing Finance Agency (FHFA) reveals that homes in Houston-Sugar Land-Baytown, TX actually increased in value 7.27% in the five-year period. A few other areas of the country also recorded home price appreciation over the period — Dallas-Plano-Irving, TX (0.49%) and Pittsburgh, PA 7.04%.
Most of the other metropolitan areas measured in the 25-region index recorded double-digit percentage decreases in home values, including the following cities:
· Riverside-San Bernardino-Ontario, CA (51.21%)
· Phoenix-Mesa-Glendale, AZ (50.70%)
· Miami-Miami Beach-Kendall, FL (46.14%)
The year-over-year demand for rental housing increased 10.3 percent for single-family homes, between March 2011 and March 2012. Rental demand for condominiums and townhouses increased 3.8 percent during the same period. The increase in Houston home sales comes from an overall demand in the area for housing.
The U.S. Census Bureau reports that Houston, Texas – the biggest city in the state and the fourth largest in the United States — has more than 2.1 million residents, in 2010. Houston functions as the hub of Harris County, the six largest metropolitan areas in the country. More than 6.08 million people live in this region located in the southwestern of Texas. The city has earned a reputation as the “energy capital of the world” because of concentration of thousands of oil exploration and natural gas-related businesses. The Houston metro region has a median income of $53,942.
A Houston Diverse Economy Shows Life
Houston has one of the most diverse economies of any major city. More than 5,000 energy-related businesses operate out of Houston. Its industrial base includes energy, transportation, aeronautics and manufacturing. It ranks second to New York with the number of Fortune 500 headquarters and is a leader in oil field equipment and healthcare.
Houston’s unemployment rate dropped from 7.2 percent in February to 7.0 percent in March. The February 2012 Metro Area Employment Report released by the U.S. Bureau of Labor Statistics shows that Houston employers created 94,700 new jobs from January 2011 to January 2012. Temporary staffing, manufacturing and energy exploration account for most of the employment gains.
Source: Bureau of Labor Statistics
The Texas Medical Center, the world’s largest medical facility, employs over 52,000 people. The medical center’s financial impact on the local economy totals nearly $10 billion a year. The seaport handles the most international cargo of a port in the country. It ranks second for total tonnage of tonnage handled.
The housing market in Houston has benefited from a strong, diverse local economy. The underlying economic performance has supported the continuing Houston home sales increase.