Houston home sales posted several new records in June with sales rising 7 percent from the same period a year ago. The average price of a home sold in June was $304,155, a new all-time high for Houston Texas. The median price of $239,023 also hit a new high for Houston. new home sales rose about 7 percent in June, in tandem with the overall sales increase.
The local real estate board seems to be elated with the news that luxury homes priced at $750,000 and above saw an eighth straight month of sales gains. Let’s hear it for the millionaires! What’s puzzling is that local real estate pundits seem to be totally oblivious to the actual economic picture in Houston. This comment from the latest HAR press release might help to explain what I mean.
“Between continued strong employment numbers and healthy housing inventory levels, we expect the market to remain vibrant.” HAR chair, Cindy Hamann
Yes, those new Houstonians working their fabulous new jobs in the retail and hospitality sectors must be falling all over themselves to buy luxury homes. Never mind the fact that average wages in Houston are stagnant to declining even as median and average home prices hit all-time highs. It’s enough to make one’s head spin, but of course the show must go on. There are homes to be sold, and truth often takes a back seat to profits in our new everything-bubble economy.
If Houston really had a strong employment sector, we wouldn’t be talking about the 25.9 percent cliff dive for auto sales in June. That’s not a misprint! We just received updated information on Houston auto sales today, the same day HAR posted the June home sales numbers. Year-to-date auto sales in Houston are down 16.8 percent compared to last year, and are now back to the levels seen in 2009.
Today we also received news that mortgage applications stalled with last week’s interest rate jump. Purchase apps are now up only 3 percent across the U.S. according to the same week last year. Amusingly, Janet Yellen and the technocrats at the Fed are now “uncertain” as to whether they should raise interest rates again this year. Suddenly the spiraling national debt is a major concern again. Go figure! Keep this chart in mind when some real estate pundit tells you rates are going to go spiraling higher. Call it 20 trillion reasons why they won’t.
Bond yields still aren’t convinced of the rising interest rate scenario the Fed is pushing…
While Houston home sales were firing on all cylinders in June, lease activity was also booming. The volume of closed leases of single family homes in Houston rose 17.4 percent and townhome lease volume spiked 21.3 percent. Even with the higher lease volumes, Houston rents for single-family homes declined 4 percent in June…
With the stock market still levitating near all-time highs, Houston home sales could remain strong. That being said, elevated prices and increasing risk in the economic system poses some very interesting problems for the local real estate market. Houston’s housing market is still performing remarkably well this year. Let’s hope our luck doesn’t run out.