Despite a tenth consecutive monthly decline in sales, the average and median prices of a single-family home in the greater Houston area soared to record highs in June, according to statistics released mid-July by the Houston Association of Realtors. Single-family home sales slid 14.7 percent on a year over year basis. However, the number of closed sales was the highest since last August.

The average price of a single-family home rose by 4.5 percent last month to $228,448, surpassing the previous high of $218,583 in June 2007. The median price of a single-family home rose 1.3 percent last month to $162,000, surpassing its previous high of $160,000, also from last June.

Sales of all property types for June 2008 totaled 7,237, reflecting a 15.1 percent drop compared to June 2007. Total dollar volume for properties sold during the month was recorded at $1.6 billion versus $1.8 billion one year earlier, a 10.7 percent decline.

"We're not out of the woods, however the Houston real estate market continues to show positive indicators that others around the country consider enviable," said Michael Levitin, HAR chairman. "Single-family and townhome pricing now exceeds levels seen even during the 2007 record year and the days on market figure has improved steadily each month this year. A number of brokers, particularly those specializing in inner loop listings, have recently announced record months for sales performance, underscoring the point that real estate is local."

Source: Houston Association of Realtors

National publication BusinessWeek highlighted Houston among a short list of cities thriving against national influences of a housing downturn, earlier this month.

"With the median home price down 14 percent nationwide in the past year and media reports predicting they have further to fall, it's easy to forget that real estate is highly localized. And some cities are proving surprisingly resilient even as huge swaths of the country are slumping. Some places, such as Omaha, never experienced the highs of boom towns like Miami and Las Vegas, and therefore aren't suffering the lows. Others, like oil-rich Houston, are faring well thanks to a strong local economy."

Source: BusinessWeek

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The Texas economy continues to create more jobs albeit at decreasing rates while the nation's labor market is losing jobs. Texas nonfarm employment rose 2.3 percent from June 2007 to June 2008 compared with a 0.1 percent decrease for the United States.

The state's seasonally adjusted unemployment rate rose from 4.3 percent in June 2007 to 4.4 percent in June 2008.

Driven by higher oil prices, the state's mining industry ranked first in job creation, followed by professional and business services, leisure and hospitality, construction, and education and health services industry.

All Texas metros experienced positive employment growth rates from June 2007 to June 2008. Smaller metro areas posted the highest employment growth rates. Longview ranked first in job creation followed by McAllen-Edinburgh-Mission, Odessa, College Station–Bryan, and Killeen–Temple–Fort Hood.

The state's actual unemployment rate in June 2008 was 4.8 percent. Midland had the lowest unemployment rate, followed by Amarillo, Odessa, Abilene, San Angelo and Victoria.

Source: Real Estate Center at Texas A&M University

Land sales in Texas had a banner year in Texas for 2007, primarily driven by sales in small- to medium-sized properties.

"The 2007 market saw a pronounced shift away from larger properties," said Dr. Charles Gilliland, a research economist with the Real Estate Center at Texas A&M University. "The size of tract per transaction dropped precipitously to 80 acres compared with 98 acres in 2006."

Gilliland said markets have hovered in the 100-acre range for the past five years, and 140-acre tracts were the norm about ten years ago.

"The 80-acre tract size per transaction sets a new low for Texas land markets," he said.

But while tract sizes shrank, prices did not.

Sales prices increased 20 percent, nearly matching the stratospheric 23 percent posted in 2006. At $2,190 per acre, the 2007 statewide price topped $2,000 per acre for the first time. The 2006 price was $1,825 per acre.
Gilliland said the recent surge in commodity prices has many investors anticipating strong earnings from farming well into the future, so they see cropland as a viable investment option.

"It's a safe haven for their investment dollars," he said. "These investors are competing with farmers flush with cash from good crops, and the result is higher prices for cropland."

In addition, the falling U.S. dollar has made land prices even more attractive to foreign investors.

Source: Real Estate Center at Texas A&M University

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