Supply/demand, supply/demand, supply/demand….
Basic econ 100 tells us when supply is insufficient for demand, prices rise. At 3.7mos of inventory, supply here is insufficient to satiate demand so prices will continue to rise. This has been the case in Houston since 2008 and this month’s numbers tell us the dynamic is not likely to change soon. Pending sales are up 8.6% YOY so July also looks to be off to a strong start.
Since oil has rebounded well off the lows and seems to have stabilized in the $45-$50 range, the job losses in the energy sector have abated which means the worst may well be behind the region. With new residents still flocking to the area the demand for housing is unlikely to abate anytime soon.
Michele Ragazzi's Giano Capital returned 1.9% for March, taking the fund's year-to-date performance to 1.7%. Since its inception, Ragazzi's flagship fund has produced a compound annual return of 7.8%. According to a copy of the €10 million fund's March update, a copy of which ValueWalk has been able to review, Giano's most significant investment at Read More
As for HHC, they are seeing no delinquencies in the NOI producing properties in the Woodlands, Exxon is taking the extra space there from them and the MPC is nearing sold out for residential lots so there is no rush to unload them. The multi family units there are doing very well and the company is in no rush to add to their current inventory so they will maintain pricing power in the sought after area. Bridgeland is in its infancy up and is seeing very strong traffic from the recently completed Grand Parkway so the MPC there will be posting impressive numbers for years. Commercial/retail development there is just getting cranked up and demand for more is strong.
MLS Report for June 2016HOUSTON’S MEDIAN HOME PRICE HITS A RECORD HIGH IN JUNE
Mid-range housing sees positive activity again while inventory gets another boost
HOUSTON — (July 13, 2016) — June provided a continued boost to Houston’s housing inventory as new listings entered the market. Home sales volume was unchanged year-over-year, but as the local real estate market has seen for the past several months, most of the homes consumers purchased were priced in the $150,000 to $500,000 range.
According to the latest monthly report prepared by the Houston Association of Realtors (HAR), a total of 7,696 homes sold in June compared to 7,710 a year earlier— statistically unchanged. However, on a year-to-date basis, home sales rose 2.7 percent versus June of 2015. Inventory levels enjoyed another bump, rising from a 3.2-months supply to 3.7 months.
“We continued to see solid buying activity among middle-range housing in June,” said HAR Chairman Mario Arriaga with First Group. “Even though sales overall leveled off compared to last June, volume is up for the year, and we anticipate a sufficient supply of inventory and low interest rates to draw more home buyers into the market in the weeks ahead.”
The single-family home median price—the figure at which half of the homes sold for more and half sold for less—rose 2.5 percent to a record high of $230,538 in June. The average price declined a fractional 0.8 percent in June to $300,178, the second highest level of all time (the highest was $302,599 in June 2015).
June sales of all property types in Houston totaled 9,139, down 0.9 percent from the same month last year. Total dollar volume for properties sold in June declined 1.7 percent to $2.6 billion.June Monthly Market Comparison
Houston’s monthly housing indicators were mixed in June compared to those from a year earlier, but nevertheless continue to reflect market sustainability. On a year-over-year basis, single-family homes sales were flat, the median price reached a record high while the average price hit the second highest level of all time, total dollar volume declined and inventory grew.
Month-end pending sales for single-family homes totaled 7,801, an increase of 8.6 percent compared to last year. Total active listings, or the total number of available properties, at the end of June climbed 13.8 percent from June 2015 to 35,857.
An increase in new listings in June elevated single-family homes inventory, with levels rising from a 3.2-months supply to 3.7 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 JUNE 2015 JUNE 2016 CHANGE Total property sales 9,224 9,139 -0.9% Total dollar volume $2,636,457,773 $2,591,071,978 -1.7% Total active listings 31,509 35,857 13.8% Single-family home sales 7,710 7,696 -0.2% Single-family average sales price $302,599 $300,178 -0.8% Single-family median sales price $225,000 $230,538 2.5% Single-family months inventory* 3.2 3.7 17.2% Single-family pending sales** 7,181 7,801 8.6%
* 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.