Home sales show modest increase in May

Monthly sales of pre-owned homes increase 2 percent

over last year.

By M.B. Taboada
AMERICAN-STATESMAN STAFF
Thursday, June 21, 2007

Home sales in the Central Texas housing market were up slightly in May, with a 2 percent gain year over year. But the modest gain came on the heels of a 6 percent increase in April, possibly hinting that sales will be less than robust.

And June's numbers — which typically show stronger sales — may be down, as pending sales for May dropped 5 percent to 3,125. The last time pending sales decreased was in December 2005, when they dropped 1 percent.

Still, sales of previously owned homes rose to 2,679 in May, a record for the month, according to the Austin Board of Realtors. Homes sold at a faster pace, taking an average of 55 days, a 7 percent improvement from the same month a year earlier. But the number of new and active listings has also increased.

Year-to-date sales were flat, at 10,355, when compared with the record year of 2006.

Real estate experts say even with the small home sales increase, Central Texas remains a solid housing market. Gains over last year may be more difficult because 2006 was so strong, experts said.

The Austin market fared favorably when compared with Dallas and Houston. In Dallas, sales were off 8 percent in May. In Houston, sales fell 2.2 percent.

"The market still remains pretty healthy," said Eldon Rude, director of the Austin office of real estate research firm Metrostudy. "My expectation coming in to 2007 was that new home sales figures as well as resale numbers would be down slightly compared to 2006, which was a record."

Rude added that "we continue to have exceptional job growth that brings in relocation buyers from other parts of the country. As you look at Austin compared to other parts of the country . . . relative to them, we're in very good shape."

The greatest number of homes sold in May were valued between $200,000 and $399,000. The median price continued to climb, this time by 5 percent to $183,160. Median prices have been rising since January.

Sales of homes valued under $140,000 continued to drop, with decreases of as much as 30 percent from 2006. It's becoming increasingly difficult for first-time buyers, especially those with a shaky credit history, to find loans, partly because of the shakeout in the subprime mortgage market.