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.
By: Sherry Campbell