Are the good times of the Houston real estate market coming to an end? Maybe yes and maybe no. It’s too early to say anything about this, but what can be said with absolute certainty is that the current stats indicate a decline. Home affordability has now dropped and sales have gone down by almost 2%.
A new report reveals some interesting facts. All residents in the area that have median income do not have enough funds to buy a house that has a median price. The median income range was almost 2% low for buying a median priced residence. During this same period, last year, the stats were in the reverse direction. At that time, the median income was 5% more than the amount needed to buy a home available at the median price.
Some time back, a list of the 25 largest metro areas in the entire country was released. Houston occupied the number 11 slot for the affordability factor.
Since affordability has decreased, the impact has been transferred to home sales as well. Obviously, there can be other reasons for this as well and not just the affordability issue. In the month of September, sales decreased by almost 2%. The value is not much, but there is still a dip. Compared to last year, home sales are still higher by 11%. This makes the month of September the 27th consecutive month in which the current values of home sales have been more than what they were in the same period last year.
The drop in sales can also be attributed to the fact that home prices have been higher than they were a year back. Last month the average price of homes reached almost $200,000. In September, 2012, home prices were 12% less than the current values.
The industry experts claim that the current affordability rates are the lowest ever in the last five years. Perhaps this is because of the fact that home prices have increased at a steadier rate than income. The mortgage rates are also accepted to rise that are going to reduce affordability even more in the next few months. Last month, the mortgages rates were around 4.5%, which are the highest ever since July of 2011.
The overall effect of the entire situation on the Houston real estate market has yet to be seen. Let’s wait to see what the future has in store for Houston.
Source: www.bizjournals.com
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