The national news is reporting that homes sales are hot, inventory levels are low, and it is a buyer’s market. That may be the case on a national level, but the Houston market does not follow the national market. While some areas of Houston are “hot”, even the Houston Association of Realtors reported a “cooling down” of the market the end of the March. Once again, the beginning of the year took off and showings doubled from last year, but buyers seem to be on the fence again, at least in the Energy Corridor.
What’s going on? Oil prices are up, but at the same time, interest rates are also going up. According to our inventory levels for Houston as a whole, which are under a 4-month supply, it should be a buyer’s market in Houston as well, so let’s evaluate this from a more local level. Let’s face it- we are a bit spoiled in Houston. The average home takes 90-120 days to sell, but prior to 2015, home in Houston sold in 30-60 days. Perhaps our market has normalized, and we just need to get used to it.
From our perspective at Energy Realty, we are seeing some price ranges (under $450k) in Katy selling fast and receiving multiple offers if the home is in good condition, updated, and priced well. Other neighborhoods seem to be moving slower, even when priced well and in good condition. Buyers seem to still be looking either for an exceptional home, or a bargain. This may be why the flooded homes that are being sold as is continuing to sell fast, while the remodeled flooded homes are not moving. We are still testing this market to see how open buyers will be to purchase in areas that flooded this soon after Harvey.
While Houston’s economy is no longer dependent on the oil sector, the oil slump over the last 4 years has impacted our economy and real estate market. Over 450,000 jobs were lost worldwide in the oil sector, and these are the people who predominantly purchased homes priced over $500k. With oil prices on the rise since the beginning of the year, why aren’t we seeing the housing market pick up at a faster pace than expected? According to analysts in the oil industry, the real estate market lags behind the oil industry by 6-12 months. If oil prices stay up, we could see this market turn to a seller’s market by the end of the year, and this could be a hot summer in Houston!
Stay tuned as we give you Real Views on the real estate market in Houston…