Despite signs of healing, Houston’s housing market struggled to pull itself out of a drawn-out slump in 2011.
Home values dipped last year, as distressed properties weighed on prices and weary sellers accepted low offers just to move on.
The median price per square foot for a single-family home in the Houston area fell 2.3 percent to $71.26, the first notable decline after several flat years, according to a home-price analysis commissioned by the Houston Chronicle.
For much of 2011, home shoppers were extremely cautious.
Even as the local job market was improving, consumers were hesitant to become home-owners, worried that prices could fall further.
The rental market soared as would-be buyers opted for temporary housing.
Many who did buy faced a grueling mortgage process, as lenders required detailed financial histories that some thought went too far. As a result of the stricter rules, housing contracts fell apart as loan applications were denied and appraisals came in lower than expected.
“The market in 2011 was stuck in a malaise,” said Evert Crawford of Crawford Realty Advisors, who conducted the annual study in conjunction with the University of Houston Hobby Center for Public Policy’s Institute for Regional Forecasting.
Three and a half months into the new year, the area’s housing market appears to be in a better place.
The number of property sales, which actually increased last year, has continued to rise.
Multiple offers
In some neighborhoods, homes are getting multiple offers and selling for a premium.
Sree Thampi had to compete with three other bidders on a four-bedroom house in Friendswood. It was one of few one-story homes in the neighborhood, he said.
He ended up offering $6,000 more than the listed price for the 3,400- square-foot property.
“We thought it was a buyer’s market,” said Thampi, an aerospace engineer.
In some places, buyers do have the upper hand.
Home sales in Eastwood, a neighborhood across Interstate 45 from the University of Houston and east of downtown, were down by more than 40 percent last year.
Douglas Parker had been trying to sell his two-bedroom, two-bath renovated bungalow there since 2010.
In 2011, he took it off the market and leased it to friends before listing it again in January. It sold in three days.
With all the work that went into restoring the house, Parker lost money. But he’s glad the house finally sold.
“It’s been a painful couple of years trying to move this property,” he said.
The Crawford/UH study evaluated 53,806 single-family homes sold through the Multiple Listing Service in Harris, Fort Bend, Montgomery, Galveston and Brazoria counties. Of last year’s sales, 16 percent were new homes.
To be included on the list of nearly 1,800 subdivisions, a neighborhood had to have at least five home sales in each of the past two years.
Consider these highlights from the study:
1 The median price per square foot inside Loop 610 registered a slight increase, but it fell 4 percent in the area between the Loop and Beltway 8. Beyond the Beltway – where more than 80 percent of last year’s homes sales took place – the price was down 2.7 percent.
1 About one in five home sales in 2011 was a property that had been in foreclosure.
1 Prices declined or were flat in nearly three-quarters of the neighborhoods surveyed.
1 Single-family-home sales were up 4.4 percent over 2010 but down 23 percent from the 2006 peak.
Home values tended to be strong in neighborhoods zoned to high-performing schools and near major commercial districts.
The median price per square foot in the West University Place subdivision, a consistently strong performer inside that enclave city, rose 2.8 percent last year to $284.48, the study said.
In Briargrove Park, a neighborhood near the cluster of oil and gas companies along the Katy Freeway, the median was up 2.1 percent to $166.18.
In the Houston Heights, it was $201.06, up 2 percent. Sales in the neighborhood just northwest of downtown soared 26 percent last year.
Bobby Salinas and Dinorah Hollingsworth recently closed on a 1,500-square-foot Victorian-style home in the area.
They’re both runners, so they wanted to be near Memorial Park. They also wanted to be close to concert venues, pubs and restaurants.
The house had been on the market about 10 days when the couple offered close to the seller’s $270,000 asking price.
“We knew in the Heights it was a little more of a competitive market. A lot of the decent houses you didn’t have to fix up were pretty much gone fast,” Salinas said. “If you were able to find something that you liked, you kind of just jumped on it.”
A whole different deal
The housing market can feel very different in the suburbs.
Older neighborhoods with lower-priced homes and some newer sub-divisions where builders tried to cash in on the first-time-buyer boom are now struggling.
In parts of Richmond and north Katy, homeowners are now competing with builders.
“Builders are giving flat screens and all kinds of stuff to get people to purchase there,” said Kevin Riles, a real estate agent who specializes in foreclosures.
Jim Gaines, an economist with the Texas AM Real Estate Center, expects to see a slight increase in home-price appreciation this year. Neighborhoods, he said, will continue to experience a wide variation in price swings.
Noting the strong energy and health care industries, he described Houston as “one of the bright spots of the country.”
Shadows linger
Despite the growing optimism over housing, the past still spooks some Houstonians.
Two years ago, Jason Casillas got a contract to sell his home in Cypress. As closing day got closer, he and his family moved to a rental house in the Spring Branch area. They were unpacking boxes when they got word the buyer had backed out.
His house stayed on the market for another three months until Casillas decided he could no longer make two housing payments. He moved his family back to the Cypress house, where they’ve been ever since.
He’d like to try moving again – he and his wife have long commutes to work – but he’s still not ready.
“After that whole debacle, we have no energy or money to move any time soon,” he said. “We just kind of wanted to get over that bad taste in our mouth.”
nancy.sarnoff@chron.com
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