upply, supply, supply….. until supply and demand balance, what we have seen for the past several years in Houston will continue. The oil price collapse will not derail housing there. Why? Houston is a far more diversified economy that it was in the 1980’s during the last big shock. Further the supply/demand equation for the housing market and apartment market and condo markets are polar opposite of what they were in the 80’s. Misplaced fears drove the price of $HHC down over the last year but it has recovered well off the lows as the company has remains fundamentally strong. I’d expect the current trajectory to continue as NOI keeps jumping.
Supply is up to 3.6mos vs 3 in 2015 (a record year for Houston housing) and that is still woefully below “market equilibrium” which is ~6mos. $HHC is saying demand at Bridgeland is strong and now that the first slug of land they sold is being developed, I’d look for activity there to really begin to pick up in the 2nd half of 2016 and into 2017.
With home sales in the Bridgeland master-planned community trending upward, development continues to move toward the Grand Parkway.
Bridgeland Creek Parkway—an east-west corridor connecting the community directly to the Grand Parkway from Fry Road—will open by January 2017, said Peter Houghton, vice president of master-planned communities with the Howard Hughes Corporation. Developers are also planning a 900-acre Bridgeland Town Center that will be on both sides of the Grand Parkway at the future intersection, he said.
With 2015 home sales in the community up 60 percent from 2014, developers have a different story to tell this year, Houghton said.
“We started with a low supply, and the housing market has been very resilient,” he said. “We had 51 home sales in April, which was the third-best month in our 10-year history. The opening of the Grand Parkway provided a shot in the arm.”
Although price points have fallen in the Greater Houston area due to the declining oil and gas market, the effect has not been nearly as pronounced in Bridgeland, Houghton said. Trendmaker Homes started selling 80-foot lots in the $550,000 range in May and sold five homes before they were even posted online.
“If the price is right, there are still a lot of buyers out there,” he said.
Construction will begin on Bridgeland Town Center within the next two to three years, Houghton said. With 5 million square feet of office space planned, it will play a major role in attaining the goal of having one job per home in Bridgeland—meaning roughly 19,000 jobs…….
HAR:
MLS Report for May 2016THE HOUSTON HOUSING MARKET HEATS UP IN MAYGrowing inventory helps meet increased buyer demand; pricing eases
HOUSTON — (June 15, 2016) — Steady growth in the supply of homes provided the fuel needed to help boost to the Houston real estate market in May, with single-family home sales up 10 percent year-over-year. As the market has seen for several months, the greatest concentration of home buying continued to take place among mid-range housing—homes priced between $150,000 and $500,000. The average and median price remained virtually the same as May of 2015.
According to the latest monthly report prepared by the Houston Association of Realtors (HAR), a total of 7,343 homes sold in May compared to 6,678 a year earlier. On a year-to-date basis, home sales rose 3.6 percent versus May of 2015. New listings buoyed inventory levels from a 3.0-months supply to 3.6 months.
“We are seeing more normal market conditions for this time of year and that is the direct result of more plentiful housing inventory for buyers,” said HAR Chairman Mario Arriaga with First Group. “A year ago, the supply of homes was historically low, which increased buyer-side demand and pushed up pricing. These are the fundamental forces of supply and demand, and with more available housing and an easing of prices, we look forward to a healthy pace of sales throughout the summer.”
The single-family home average price declined a fractional 0.5 percent in May to $290,931. The median price—the figure at which half of the homes sold for more and half sold for less—held steady at $225,000.
May sales of all property types in Houston totaled 8,703, up 7.1 percent from the same month last year. Total dollar volume for properties sold in May rose 7.3 percent to $2.4 billion.
May Monthly Market ComparisonThe Houston real estate market gauges held to positive territory in May compared to those from a year earlier and continue to reflect what are widely considered sustainable market conditions. On a year-over-year basis, single-family homes sales and total dollar volume were up, inventory grew and prices were statistically flat.
Month-end pending sales for single-family homes totaled 8,286, an increase of 15.6 percent compared to last year which portends the likelihood of more positive sales when the June numbers are tallied. Total active listings, or the total number of available properties, at the end of May climbed 17.4 percent from May 2015 to 35,416.
An increase in new listings in May boosted single-family homes inventory, with levels climbing from a 3.0-months supply to 3.6 months. For perspective, housing inventory across the U.S. currently stands at a 4.7-months supply, according to the latest report from the National Association of Realtors (NAR).
CATEGORIES MAY 2015 MAY 2016 CHANGE Total property sales 8,123 8,703 7.1% Total dollar volume $2,229,902,866 $2,392,124,785 7.3% Total active listings 30,162 35,416 17.4% Single-family home sales 6,678 7,343 10.0% Single-family average sales price $292,258 $290,931 -0.5% Single-family median sales price $224,900 $225,000 0.0% Single-family months inventory* 3.0 3.6 20.9% Single-family pending sales** 7,167 8,213 15.6% * Months inventory estimates the number of months it will take to deplete current active inventory based on the prior 12 months sales activity. This figure is representative of the single-family homes market.
** Effective May 2015, in an effort to be consistent with industry standards, the Houston MLS is now including all categories of pending sales in its reporting. Previously, the Houston MLS did not include “option pending” and “pending continue to show” listings in its reporting of pending sales. The new methodology is now all-inclusive for listings that went under contract during the month.
