HOUSTON—THE ECONOMY AT A GLANCE
June 2010 ©2010, Greater Houston Partnership Page 2
Rig Count up, Gas Prices Flat, Oil Prices Slipping
— The Baker Hughes countof active domestic rotary rigs averaged 1,507 in May, ending the month at 1,535—the highest level in 71 weeks, and 75 percent above the recent low of 876 last June.The Friday closing spot market price of Henry Hub natural gas has held fairlystable at around $4 per MMBtu since mid-March. In its May
, the agency forecasts the Henry Hub spot price to average $4.48 perMMBtu in ’10 and $5.34 in ’11. Inventories of gas in storage remain high, how-ever, and continue to exert downward pressure on prices.The Friday closing spot market price for West Texas Intermediate crude oil (WTI)hovered around $70 a barrel in May, having slipped from around $84 a barrel inApril. The drop in price resulted more from a strengthening of the dollar than anydecline in oil demand. EIA projects that world oil consumption will grow by 1.6million barrels per day in 2010, slightly higher than in last month's
, andalso by 1.6 million barrels per day in 2011.
Homebuyer Tax Credit Boosts Housing Market
— Single-family home salestallied on the Houston Multiple Listing Service rose for the second consecutivemonth in April ’10, the Houston Association of Realtors® (HAR) reported.Houston area closings in April totaled 5,321, a 26.7 percent increase from a yearearlier. “The Houston real estate market seems to have truly benefited from home-buyers who acted by April 30 to take advantage of the tax credit as well as lowmortgage interest rates,” said Margie Dorrance, HAR chair. The $8,000 tax creditfor first time homebuyers expired April 30 and required homebuyers to signclosing papers by June 30.
Unlike many other parts of the nation, Houston’s home prices continue to appre-ciate. As sales activity has increased, prices have continued to rise. The averageprice of a single-family home increased 6.8 percent to $206,414, driven by a 53.4percent rise in luxury home sales ($500,000+). The median price of a single-familyhome sold in Houston in April ’10 was $153,500, up 2.4 percent from a yearearlier—the highest for an April in Houston.Sales pending at the end of April totaled 4,613—the highest since July ’08 and up25.2 percent from April ’09. Single-family inventory stood at a 6.5 month supply,up from a 6.0 month supply a year ago.The tax credit also seems to have boosted Houston’s new single-family homemarket. Net sales of new single-family homes in April totaled 2,251, up 17.5percent from last year, according to a Metrostudy survey that covers approximately75 percent of the Houston new single-family market.However, with the expiration of the homebuyer tax credit, builders are expected toreduce their spec construction. Lower traffic and new home sales are also expected.