Houston home sales were hot through August, according to the Houston Association of Realtors. Low interest rates continue to encourage home buying in prices ranging up to $750,000, but homes priced above $750,000 slowed compared to the rest of the market.
Despite this good news, most home prices continued to soften, so we will probably see home values in 2019 end lower than 2018. The other good news is that I feel that our market has finally hit bottom. It has been two years since Harvey devastated many Houston neighborhoods, and we are also seeing oil companies heat up the hiring in Houston again as oil prices stabilize. The Houston housing market typically follows the oil market by 6-12 months. I think home values will start to go up again in 2019!
If you are just now choosing to put your home on the market for sale this Fall, you could see some good results. When you read the article below about mortgage rates, 30 year mortgage rates have consistently remained under 4%, so the Fall market could be the second best time to sell a home besides the Spring. Vacations are over, schools are in session, and many home buyers hope to take advantage of the Texas Homestead Exemption by the beginning of the year.
We continue to assist homeowners in flooded neighborhoods as well, and although these homes typically sell below pre-flood value, at least they are selling again! Many flooded homeowners are choosing to Lease their homes until their home values go up again, and with oil companies hiring again, many of these homes are leasing. Despite the rumor, most oil companies are allowing rentals in previously flooded homes.
We are still in a Buyer’s Market, so remember that buyers have the upper hand with more inventory to choose from so we see two things happening: 1) buyers like to negotiate 2) buyers are looking for homes that are move in ready.
Every house will sell in any given market at the right price! The question you will need to discuss with your Realtor is what that price is and if you are willing to sell at that price. A professional Realtor should be able to give you a realistic idea of what your home will sell for in this market.
Relocation Activity Picks Up
While oil prices have dropped in the last week, oil companies seem to be hiring and taking on new projects because we have seen more foreign nationals relocate to Houston in the last month than we have seen in two years.
Energy Realty opened for business during the peak of oil prices, and during that time, 30% of our business was with foreign nationals. After oil prices plummeted in 2014, we felt the impact with a downturn in relocation clients and home prices followed that downturn.
The real estate market typically follows oil prices by 6-12 months, and we are starting to see that activity point the market in the right direction. Although 3 years ago $50 a barrel was not a good sign for Houston, today oil companies are producing oil more efficiently and are still profitable in this range.
It’s about time that this real estate market starts to normalize because it has been as unpredictable as oil prices for the last three years. Our relocation agents are receiving multiple clients arriving with oil companies and oil service companies every week, and the word is that most companies are hiring and relocating by the 100’s.
Although I reported in May that clients relocating to Houston would potentially purchase homes rather than lease, we have seen a shift to high end leases again, with budgets in the range of $3000-$8000 per month to lease executive homes with pools. If your home flooded and has been remodeled well, a lease may be the best option until home prices rebound from the last three years, but be prepared to make sure your home is modern in order to attract these executive renters.
Read the article below about how remodeled flood homes have started to sell below pre-flood values and suppressed the values of non-flood homes. This will hold true with rental properties that have not been modernized.
Our international team of Realtors specializes in relocation and will be ready to turn this market around as more foreign nationals arrive to Houston.
We are officially under a storm watch going into the weekend, and the homeowners who have just started to recover from Harvey, are probably holding their breath over the potential threat of a hurricane entering the Gulf. Communities that flooded from Harvey are still recovering from the financial blow to home values, and surrounding homes that didn’t flood have felt the impact as well.
How did Harvey change our market in Houston? Flooded homes in established neighborhoods have been remodeled to look like new, or in some cases remodeled poorly by investors that wanted to turn the house for a quick profit. After sitting on the market for over a year in some cases, some investors have now let these homes go back to the lenders, and although they are not in a “foreclosed” state, the prices are being slashed for a quick sale. If you have a home in the same area that didn’t flood but you have not remodeled, how do you compete with a fully remodeled home that is priced 10-20% less?
Buyer’s expectations have changed in this market, and they are looking for homes that are not only remodeled on trend but floor plans that are more open. Many homes in established neighborhoods have not been remodeled, and it is becoming a struggle to sell these homes to today’s buyer. There are some areas that are an exception to the rule, like homes in Spring Branch that are built in the 1960s and 1970s yet are still highly sought after for the schools.
Harvey isn’t the only event that shifted buyer’s expectations-HGTV has created the image of the dream home that every buyer is looking for. Today’s trend of the dream home is open and neutral with wood floors and white cabinets. Buyers expect bathrooms and kitchens to be updated, and surprisingly, that includes the secondary bathrooms. Today’s buyer is not giving the seller any slack! Selling a home today is like selling a car–make it look like new, or the buyers will think your home is worth a lot less.
Energy Realty agents are equipped to guide you and offer advice as well as contractor options to help you sell your home for the best price. Read the attached article what buyers want in a home as well as an update on mortgage rates. It is a great time to buy a home in Houston with low-interest rates and increasing inventory.
The Houston real estate market seems to be following the temperatures and heating up as we swing into the summer season! I hope everyone is seeing the signs of increased activity and more homes going under contract at a faster pace than we saw in the last 6 months. I know that every Realtor I speak to seems to be busy. At Energy Realty, we have seen more business than we have seen in 2 years.
Yes, it is still a buyer’s market in most areas, unless your home is priced under $250,000, but remember, the real estate market follows the oil market within 6-12 months, and we are still in that window. While oil prices did take a dip the last few weeks, companies seem to be doing more hiring than laying off, and many of the employees being relocated to Houston are coming in on a local package with little to no housing allowances. This could continue to impact the rental inventory, but boost home sales as people relocating to Houston turn to a home purchase in lieu of a rental.
Summer is the season to move as many families like to settle in before school starts again in August, so if you are thinking about selling your home, now is the time to list! With 30-year mortgage rates hovering under 4%, it is a great time to buy as well.
If you are trying to sell, don’t be shocked if the value of your home is less than what it was worth 3 years ago, because we have seen values drop in the last 3 years. Every real estate market is cyclical, like the stock market, and we have been in a down cycle for 3 years. The good news is that we should see prices start to go up by the end of the year.
Always hire a professional that will be up front and evaluate the market with an honest approach rather than someone who is just trying to put a sign in your yard.
“We have so many Venezuelan friends and neighbors in the Energy Corridor, and our hearts go out to them as their country suffers,” said Sherry Campbell, owner
Energy Realty intends to continue to raise money for I Love Venezuela throughout the year by donating a portion of sales to the foundation. The foundation was selected because of
“I know the founder of I Love Venezuela, Santi Chumaceiro, and they have provided so much aid to Venezuela in the form of education, health, and social development,” said Soraya Goode, Realtor at Energy Realty.
In order to bring awareness to the crisis in Venezuela, Soraya Goode and her fellow Venezuelan agents intend to have a strong presence at the Energy Corridor International Festival with food provided by Pastelitos, artisanal products from Venezuela, and entertainment.
The owner of Pastelitos, JR Criollo is originally from Venezuela and opened his restaurant on Eldridge Parkway in 2011. He serves a unique blend of Latin and Venezuelan flavors, but specializes in the Venezuelan
“We had a strong turnout of support from the community at the Art is An Outdoor Market and collected a lot of donations for the children of Venezuela on March 23,” Soraya added. “We expect to raise even more aid at the International Festival.”
Houston is one of the most diverse cities in the United States, and the Energy Corridor is one of Houston’s most diverse communities. Please join us in celebrating all of our cultural differences and join Energy Realty in their effort to help Venezuela. You can also go online to ilovevenezuela.org to make donations directly online.
The first quarter of 2019 flew by, and it seemed to fly especially fast, as our office has seen more activity than we had in the last 2 years! Our office just closed 97 transactions in 3 months. If the trend continues for the rest of this year, all indicators are that our real estate market is bouncing back from a 3 year downturn. It’s about time Houston!
Following a mini crash at the end of 2018, oil prices are rebounding again and staying in a profitable range of $60 per barrel, so we are also seeing more relocation activity than we have seen in the last 3 years. However, according to members of the Houston Relocation Network Group that we are part of, relocation clients are increasingly moving towards a home purchase rather than a lease. This could cause the higher end rental market to stay stagnant or continue to drop if the trend continues.
I am happy to report that we continue to Lease homes that are in new and updated condition, but I would approach this market with caution and not only insure that rental properties are in good condition, but also make sure they are priced well.
While activity is picking up, we still have a lot of inventory due to a slow 2018, so we are still in Buyer’s market with over 6 months supply of inventory. Prices may continue to drop as homes that have been on the market for a long time struggle to find the right buyer, and the demand for remodeled homes that are ready to move in will continue to be higher than the fixer upper.
The silver lining behind Harvey is that flooded homes are being remodeled to look like new, but this will be tough competition for the homes that did not remodel because not only are the homes like new, they are also priced lower.
It is a great time to purchase a home with lots of inventory and lower interest rates. Please read the article below about mortage rates dropping to the lowest rate in a year.
We were recently introduced to a new Home Warranty company with amazing technology and a different concept for keeping home repairs from sky rocketing, and as a real estate Broker I was not only excited to introduce this to my clients, I was excited to sign up myself. However, in less than 30 days as I logged online to set up a home warranty for a client, I found out that this company had been gobbled up by a larger home repair company! What started as a vision to offer better hands on service for home warranties, ended with a huge payout.
Doesn’t it seem like all the small companies are being taken over by the large companies and limiting our options? Amazon is the largest retail internet site in the world, but they continue to add services and gobble up smaller companies. Will we become a world where all of our shopping is done on Amazon? The same thing seems to be happening in real estate as some of the largest real estate companies in the world acquire or merge with the small boutiques.
Energy Realty is a small boutique with only 25 agents, and we are all about full hands on professional service. In a world that is being taken over by the corporate giants, I hope to remain the small fish so that we can continue to cater to the needs of our clients.
Technology is great and is making our lives easier in many ways, but we are losing the personal touch through technology. What happened to the days of calling a company and having a live person answer the phone? Why do we need to go through a litany of recorded options over the phone or internet before we can get a live person to finally answer our questions? Many of the large companies no longer give you an option to speak to a live person and expect you to find your answers on their website “Help” section.
When dealing with someone’s largest investment, I feel that we accomplish so much more with personal interaction, not only through the negotiations process, but also to help give our clients the comfort and ease they need when buying or selling a home.
Admittedly, I am an online shopper, and Amazon is a go to site, but when I am looking for service, I want to work with a company that treats me like an individual and not a number. In the end, quality is more important than quantity.
Thank you for letting me ramble on this month about corporate take over’s. I promise to give you my views on the market again next month.
Who turned the lights on in January? According to a report of showing activity comparison of December to January on Centralized Showing Service, showings on active listings increased around 30% in the Houston metro area. The real estate market seems to be heading in a positive direction for 2019!
Oil prices also started the year off in a positive direction, and although the prices are still bouncing up and down, we are starting to see an influx of relocation within the oil industry again. In fact, relocation activity has been more active than I have seen in years. It is time that the Houston housing market heads in a positive direction.
Try not to be discouraged by the national reports talking about the national housing market hitting all time lows because again, our market does not typically parallel the national market. On the other spectrum the Houston news continues to report increased sales and prices in 2018 that is not reflective in our days on the market and continued price drops, so I am still trying to understand this data. Perhaps the numbers are up because after 200,000 homes flooded, the market was inundated by investors purchasing flooded homes and displaced home owners moving.
Houston has always been a great market for investors, and Harvey brought even more investors in. Unfortunately, some of these investors may be on the verge of foreclosure in 2019 because they over estimated the after flood value of these homes. While it appears that consumer confidence in flood areas is improving, we are still seeing 50% of buyers refusing to consider a “flood” home.
Appraisers and Realtors are having a hard time determining the diminished value of a “flood” home in neighborhoods where the entire neighborhood did not flood and some homes are not being remodeled to the standard that appeals to the average home buyer. Although I am a huge proponent of HAR (Houston Association of Realtors) and feel that they have one of the best MLS platforms in the country, we all need to appeal to HAR about adding a Harvey flood tab on MLS so that Appraisers and Realtors can at least gather the data effectively.
As a homeowner of two “flood” homes, I do not want to push values down, I just want to understand it so I can advise our clients. I feel strongly that our values will come back as people realize again that the location of these homes outweighs the risk, and now these homes are better than ever. #houstonstrong.
Happy New Year! 2018 ended with more of a thud than a bang as both oil prices and the stock market dropped in December. The national media is predicting a potential recession in 2019, but I have to recall that typically the Houston economy and real estate market does not follow the rest of the nation.
I am optimistic that 2019 will be a good year for the real estate market in Houston. According to Market Watch, “Gasoline prices at the pump have dropped to their lowest in about a year and half, but could jump by 35% as soon as May, with output cuts by major oil producers expected to boost the price of oil, according to gasoline-price tracker GasBuddy.” While oil prices are not the only driver of Houston’s economy, it is our largest driver, so we should see our real estate market rebound as well.
In the article below, mortgage interest rates should also continue to rise to just above 5%. Please keep in mind, that the average interest rate in the last 20 years is 8%, so 5% is still a reasonable rate. Although the higher interest rate may affect affordability for some buyers, to put it in perspective, a 1% increase (4% to 5%) on a $350,000 home will increase the monthly payment by about $160.
A new year signifies a fresh start! The devastating affects of Harvey will continue to fade into a distant memory as the majority of flooded home owners have either remodeled and moved back home, or they have moved on. We should feel optimistic that a “Harvey” is not likely to happen for a long time, and the bond passed last August will put money into fixing the issues that caused this. Our neighborhoods are coming back better than ever.
At Energy Realty we have lots of big plans to not only assist our community in recovering in 2019, but also to maintain a competitive edge in real estate. It is a constant struggle to keep up with emerging technology, but we continue to stay on the cutting edge to provide the Best Move for anyone looking to buy or sell a home in Houston. I am also working with a team of innovative women to start a grass roots International Festival in the Energy Corridor this year to help revive businesses and interest in what I feel is one of the best places to live in Houston. Stay tuned as our plans emerge into what I hope will become an annual event.
Best wishes to all of you for an amazing 2019!
As 2018 comes to an end, I have to ask, is anyone else confused about the state of the real estate market? If you read the reports for 2018, the number of homes sold and home prices are up from 2017, but if you are a seller (or a listing agent), you might ask, “then why hasn’t my home sold, and why do I have to keep dropping my price”?
Information is always relative, and I guess that relative to 2017, when Houston was devastated by Hurricane Harvey, home sales have improved in 2018. However, has anyone else thought to ask how many of those home sales on record were flooded homes that investors came in and purchased for less than half their original value? In one neighborhood alone that was impacted by Harvey, 41 of 158 flooded homes sold prior to being remodeled. That’s 25% of the neighborhood, when in a given year, 5 homes may sell in this neighborhood.
I am generally a positive person, but I have a hard time telling sellers that the market is great unless that is truly what I am seeing. I can tell buyers that it is a great time to buy though! Many homes are now priced below pre-Harvey value and if they flooded, they have been remodeled and are still less. That may be the other “elephant in the room” that has impacted our real estate market. In 2017 immediately following the floods, the Houston Association of Realtors (HAR) required that agents identify homes that flooded from Harvey, but after some homeowners complained, they removed that requirement stating that the obligation to disclose is on the seller, not the Realtor. As a result, many zip codes that experienced flooding have been marked as a flood zip code, even if not every property flooded.
Please remember that I can only state my opinion of the market, and this opinion is based on my personal insight and experience in a market that is predominantly in the Energy Corridor, Katy, and the Memorial area. In my opinion, 2018 was a tough year to sell a home, unless the homes was either exceptional, or a seller was willing to sell their home for less than pre-Harvey values.
The good news is that I think that 2019 will be a great year! Neighborhoods have come back stronger and better, and oil companies are beginning to hire again, despite the recent down turn in oil prices. Let’s face it-West Houston is impacted by oil prices. The word on the street is that many of the major companies like BP, Marathon Oil, Schlumberger, and Technip are consolidating their offices to the Energy Corridor so we should see more relocation in 2019.
We want to wish all of our staff, clients and friends a wonderful holiday season, and we hope to continue to be a source of information and assistance for Houston and our communities.