Tuesday, October 23, 2012

Houston Home Sales in Orbit

Some highlights of Houston home sales in September:

1. Single-family home sales in September rose 8.7 percent above last year, and posted the 16th consecutive monthly increase in home sales on year-over-year basis.

2. The average price for single-family homes sold in September increased 4.7 percent to $220,992 compared to last year, which was the highest average price in Houston for the month of September. The median sales price increased 6.1 percent to $165,000, and also set a record high for the month of September.

3. The total dollar volume for homes sold in September increased 13.9 percent to $1.2 billion compared to $1.1 billion in sales volume a year ago.

4. The inventory of single-family homes is now below five months, dropping from 6.8 months a year ago to 4.7 months in September, the lowest inventory of Houston homes since March 2002.

Pretty much across the country it appears the housing market has bottomed. There may be some shadow inventory, but if banks aren't slamming that inventory into the market with rising prices, they will never do so. They'll ease that inventory---and on the other end you have hedge funds as aggressive buyers.

Because house prices no longer out of wack with rental prices and because rents are rising (due to Bernanke money printing),the imputation theory explains the increase in housing prices, rather than, at this point, a crazed race to buy houses. This is a much stronger base for housing. If Bernanke continues to print, housing prices will continue to climb because of climbing rents and because of bank money available at low interest rates (relative to what market rates would be)  to buy housing.

(Via HAR)


  1. "The larger the supply of any factor the less important the products made, the smaller the marginal utility, and thus the smaller the contribution imputed to each item ... Demand here comes not only from wants but from supply of complementary goods. ... In either case the productive contribution imputed rises and falls with it."

    That's straight from wiki's entry on imputation theory.

    So I suppose the whole debate on pricing would be on the amount of "shadow inventory" from the imputation perspective?

    I do find the last entry on the topic interesting:

    "Ludwig von Mises claimed that he was "more harmful than useful," and that he "never really understood the gist of the idea of Subjectivism in the Austrian School of Thought."

    All in all this is a quality write up Wenzel and adds more to think about in terms of housing prices. I am still content to stay on the sidelines and hoard silver/gold, but it's interesting none the less.

  2. Phhhft... http://www.zerohedge.com/news/2012-10-23/when-brazilian-model-brothers-come-miami-and-buy-rent-top-near

    And HFT provides liquidity too, right? : p

  3. And with it - Property taxes (aka, government ransom) up 35%.......

  4. Here in the Woodlands (a suburb to the north of Houston), I have read that home inventories are the lowest they've been in a decade. Exxon is building a new campus here for its headquarters and that has much to do with the buying.

  5. Whoaaaaaaaaaaaa, there Nelie. "...Levitating The Black Hole...".

    Let's all wrap our gel matter around this beautiful expose.