Nearly 75 million Americans have been fully vaccinated as of today, which is 22% of the population, and while we appear more people seem to be getting out and going to work again, as well as going to restaurants and the gym, we are not yet back to normal.
It appears that even if the entire population is vaccinated, we may not see life resume back to the “old normal” as fears of new COVID-19 strains still circulate in the air. As a result, more people prefer to stay at home and cocoon in a safer environment.
What does this mean for home sales? In general, the market remains a Seller’s market across the United States, including Houston as more people look for more space both indoors and outdoors to cocoon with their families. While interest rates may have been ping ponging up and down over the last few months, it has not stopped the drive to buy bigger homes.
In addition, inventory levels remain at all time lows, with less than a 2 month’s supply on the market in general and closer to a 1 month’s supply in the Suburbs. Although I predicted that the inventory levels would increase by this Spring, they are increasing at an excruciatingly slow rate, especially in the Suburbs. As of this morning, there are just over 200 homes Active on the market (not under contract) in Katy.
As you move towards town, inventory levels will creep up, but homes are selling at a fast pace in most markets in Houston. I see more e-mails and social media posts every day from agents searching for homes for their clients before they come on the market. In the price range under $400k, we have seen over 100 visitors at an open house in one day, and over 30 offers on these homes. (The higher price ranges are also selling fast, but not at this extreme pace, and the market is still price and condition sensitive.)
Please be careful Houston, because the last time we experienced a crazy seller’s market like this, it became a speculative market and buyers overpaid for homes. It is a frenzy to win the bid, and buyers are paying 10’s of thousands of dollars above asking price—I have seen $50k above asking price in some situations. This is pushing values up at a record pace that may not be sustainable, so as the market cools, the real value may be below what these buyers paid.
Approach the buying market quickly and with caution, and work with a professional Realtor that can guide you into a winning purchase.
Writer – Sherry Campbell
The Houston housing market is still hot despite the recent freezing temperatures that created havoc in our city! Low inventory and the need for more space, continues to drive home sales and give Sellers the advantage to push prices upward. Hang onto your seats though because this market changes as quickly as the weather in Houston, so we are anticipating more inventory to pop up in the next few months, which could shift the dynamics for the sellers.
March to April are typically the busy months for listing homes, but unfortunately, the Snow Apocalypse slowed sellers down, among other things. My daughter saw a Tik-Tok that said, “Don’t mess with Texas unless you have 2” of snow—then you will mess Texas up!”
In most parts of Texas, we saw 2-6” of snow, but it wasn’t the innocent white flakes that caused so much damage, it was the freezing temperatures with no power for 3-5 days across Texas. I spoke to Joy Knox with State Farm Insurance last week and she shared that in 2020 they had 2500 busted pipe claims, yet following the recent freeze, they already have 84,000 claims!
Many sellers that were planning to list their homes for sale are now dealing with broken pipe repairs, and the rental market is now experiencing low inventory levels as many displaced families look for temporary housing while their homes are being repaired. I have one friend that had 2 hot water heaters burst in the attic and cause $90,000 worth of damage—that would set anyone behind schedule!
As we bask in 70 degree temperatures again, the freeze seems like a bad dream, but we will hopefully me more prepared next time and either upgrade our plumbing to PEX or insulate our pipes. The Snow Apocalypse has also slowed down scheduled closings as lenders are now requiring that all homes are inspected prior to closing to make sure there is no damage caused by the freeze.
Texans are strong though and we will get through this as well. The Spring is a good time to do maintenance on your home, so check your pipes, hot water heaters, and your insurance policies. According to Joy, 50% of homeowners were not insured for the frozen pipes. It is always best to work with a local insurance professional versus buying online. Call an Energy Realty agent for some recommendations.
Written by Sherry Campbell
Where have all the houses gone? Coming off a record year of home sales in 2020, the inventory of homes for sale has dropped to 1.9 months of inventory, the lowest levels we have seen in 25 years. Today, when I look on HAR, there are only 235 homes for sale in all of Katy, and I still remember seeing 150 homes for sale in one community 5 years ago! Keep in mind that a balanced housing market in Houston is a 4-month supply.
Typically, we see an abundance of houses for sale in January, but last year we sold over 115,000 homes in Houston, and we haven’t replenished the inventory yet. Sales in the Energy Corridor were slower to take off in 2020 due to the reaction to low oil prices and the shift to the suburbs as more people continue to work from home. As inventory feel short in the suburbs by years end, we saw a reaction in the Energy Corridor and other “inner-city” markets. Many homes that sat on the market for months last year, suddenly went under contract in January, spreading the inventory shortage to other parts of Houston.
The suburbs like Katy, Cypress, and the Woodlands remain the hottest markets as we still see homes that are well-priced and move-in ready receiving multiple offers within days of going on the market. Sellers should be warned that despite the hot market, the requirement for homes to be move-in ready and updated remain a major selling point, so it is worthwhile to spend some money to make sure your home is in marketable condition before putting on the market.
This may be the reason why we are not seeing a lot of homes coming on the market yet. Following the brief slow down over the holidays, sellers may be taking their time preparing their homes for sale so they can capture a greater return on their investment. With interest rates remaining as low as 2.5% on a 30-year fixed mortgage, there is no better time to buy a house, so we still have a surplus of buyers looking for that perfect home.
What does that perfect home look like for a buyer today? Outdoor space, pools, and space period have been the major driving factor for home buyers. Despite the promise of the entire United States receiving a COVID-19 vaccine by the end of the summer in 2021, COVID-19 has shifted the way we live, and I don’t see the need for our homes to be the center of everything we do going away soon.
Writer Sherry Campbell
2020 was a crazy year to say the least, but I also think it was a year of reflection. For many of us, our work lives and personal lives were turned upside down as we were forced to work and live at home more than ever, but we did find some renewed energy in the change.
We slowed down the pace in 2020 and spent more time with our immediate families. Instead of filling our days with errands, birthday parties, soccer games, and more, we were forced to spend more time at home cooking, baking, gardening, or whatever other activity we could find without leaving the confines of our homes. It was new, different, and maybe not so bad….
For real estate, it was a great year, because people needed more space, and in most cases bought larger homes to accommodate their needs. However, buying and selling a house amidst COVID-9 was a challenge for all of us. Realtors had to pivot and fast track with more technology to offer Virtual Tours, Virtual Open Houses, and virtual closings. Buyers had to make buying decisions through these virtual tours and we saw more homes sold before the buyer actually stepped foot in a home!
2020 is finally over and while most of us are happy to put 2020 behind us, it is also a time to Reflect on what we learned in 2020 then Renew and Reset to move forward in 2021.
As the Broker of Energy Realty, I Reflected over the last six months over how important technology had become in everything we do, including in buying and selling real estate. As a full-service boutique brokerage, I knew it was time to Renew our offerings for clients and Reset our image, so I chose to partner with the top technology firm in the industry in 2021.
I am pleased to announce that Energy Realty has a new look and a bigger technology company behind us for 2021 so that we can continue to offer the same personal, first-class service to our clients, but with some of the best technology resources in the industry. With a company like Side by our side in 2021, we plan to expand our offerings to our clients to make the real estate experience seamless and stress-free. We are still Energy Realty and we still hire the Cream of the Crop Realtors so we hope you will join us on this new journey in 2021 to be better than ever!
Writer: Sherry Campbell