(For use by New York Times News Service Clients)
c.2012 Houston Chronicle
Record-high prices will continue to rise as pent-up demand, new jobs and low mortgage rates fuel the real estate buying binge, experts said Tuesday after the Houston Association of Realtors released a striking report on housing.
Houston-area buyers closed on 7,794 single-family homes in May, the most properties ever to sell in a single month, the report said. The last time sales even came close to that level was during the summer of 2006, a year that marked one of the best housing markets this area has ever seen.
''Not a lot of people saw this coming," said Amy Bernstein, president of Bernstein Realty. "There's no telling how long this ride will go."
The median price of a single-family home - the figure at which half the homes sold for more and half for less - jumped 11.9 percent to $188,000 in May, an all-time high, the association reported.
Mortgage rates, which have ticked up in recent weeks, could stimulate even more housing demand as shoppers decide to jump in while the cost to borrow money is still near record lows.
The rapid pace of sales and price appreciation have some wondering if the market is getting overheated.
''We need to carefully watch pricing," Danny Frank, chairman of the realtors association, said in the report. "A disproportionate appreciation in home prices could suggest a bubble, and Houston is very fortunate to have avoided one so far."
Some close-in areas where activity has been especially strong could be entering bubble territory, said Jim Gaines, an economist with the Texas A&M Real Estate Center.
In neighborhoods like Tanglewood, West University and the Heights, "properties are just selling like hotcakes," he said.
Buyers are having to bid well above asking price to get the houses they want.
Across the Houston area, homes are selling within days and buyers are losing out to competing bidders who offered to pay more or remove financing or appraisal contingencies on their contracts.
The realty association, which tracks how quickly properties are selling, said it took an average of 57 days to sell a home here last month - the lowest it's ever been.
As inventory remains tight, "you're going to continue to see disappointed buyers and aggressive negotiating," said Robin Mueck, president and CEO of Heritage Texas Properties.
Housing inventory continued its decline in May, falling to 3.3 months at the end of the month. That means it would take that long to sell all the houses on the market based on the previous year's worth of activity. Experts say around six months is a balanced market where neither buyer nor seller has the upper hand.
The inventory levels are comparable to figures last seen here in the late 1990s. By comparison, the inventory of single-family homes across the United States stands at 5.2 months, according to the latest report from the National Association of Realtors.
Many people are not putting their homes on the market because they're afraid the limited inventory will make it difficult to find - or afford - a replacement.
The No. 1 reason for selling a home in today's market is because of a move out of the city, Bernstein said.
There's not a lot of that happening as Houston's economy lures more people to the city.
Even those who are moving out of town are renting their homes in Houston because if they come back, they're afraid they might be priced out of the market. XXX - End of Story