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Temperatures dropped in August along with home sales in Houston, and while Houstonians welcomed the break from extreme heat, home sellers became anxious as market times increased.

While the market shift in August may have come as a surprise to some sellers, after 17 years of selling real estate, I want to remind everyone that the housing market typically cools in Houston as parents prepare to send the kids back to school and everyone comes back from vacation.

As families shifted their focus on back-to-school activities, there was little time to focus on buying a home, even if we weren’t also facing rising interest rates. As the housing market normalizes after a post pandemic frenzy, August was back to the status quo in relation to the housing market.

Hang on to your seats though! As we finish the Labor Day weekend, or what some people label as the last weekend of summer, we should see the Fall season pick up. Yes– there is a Fall season for home sales, and it typically starts after Labor Day weekend. According to Homelight, homes listed in September typically sell for more money.

While inventory levels have been creeping up in most markets and we have a 2-3 months’ supply of homes for sale verses a 1 month’s supply that we saw at the beginning of Summer, it is still a Seller’s Market, just a much tamer Seller’s Market.

Although interest rates are higher, home prices are leveling out so buyers do not have to compete against multiple offers and be forced to overpay for homes in most cases. There are still some homes that are exceptional that buyers are willing to pay above the market prices for, but I highly advise buyers to approach overpaying in this market. The last time I saw that happen in 2013-2015, those same buyers were upside down in their homes for at least 4 years.

Overall, this is a much calmer market for buyers to buy a home in, and it is still a reasonable market for sellers to sell.

We are officially in the third quarter of 2022, and while the year started off in a positive direction, there is lots of chatter about a recession and a housing market bust. Whether real or not, the chatter creates a slow down in spending on all sectors, and that includes the housing market.

As predicted, the feds have hiked interest rates 3 times already this year, and they are projecting to increase at least once more by the end of the year.  However, as of today, the average interest rate on a 30 year mortgage is still 5.5% and we are nowhere near the 7% that people were chattering  about in the 2nd quarter.

While I am not an economic expert, my 17 years of experience in Houston real estate has given me some insight on what to expect when the housing market shifts.

The second big word to watch besides Recession is Affordability.  Let’s face it, with an average of 20% appreciation on home prices in Texas over the last 2 years, we were already on track to price the housing market out of range for many buyers. Now with interest rates already 2 points higher than this time last year, home buyers will either have to decide to hold off buying, or they will have to lower their budgets.

In my humble opinion, the cool down of the housing market is a good thing for buyers. Due to abnormal low inventory levels, buyers have been paying above market for the last two years in order to compete with multiple offers. At least now buyers can expect to pay market value for a home, rather than overpaying.

I am fortunate to be a founding member of the Houston Relocation Network as well as a member of the Greater Houston Luxury Group, so I am able to gauge market opinions with some of the top Realtors in Houston on a monthly basis. In our last meeting, top Realtors in Houston all acknowledged that they have seen the showing activity slow down on listings, so Houston is feeling the impact of a market slow down.

I remain firm in my belief that Houston’s housing market will not slow down as quickly as the rest of the United States because our housing market typically follows oil and gas prices by 6-12 months, and with oil prices remaining around $100 a barrel, our housing market should remain strong. A “slow down” is a nice reprieve from the crazy fast pace and high prices that we have seen over the last two years, and buyers will actually stand a chance to buy a home without overpaying for it.

If you want to follow my Real Views on the Houston Housing Market, you can follow my monthly blog at or check out my live version on Energy Realty’s YouTube channel.

The big news in real estate over the last few months is rising interest rates for home loans, but
in the last few weeks, interest rates dropped again by almost 1/2%. If you have been looking to buy a
home for the last year, there is no better time than right now.

Inventory levels have increased by 9% across Houston, so not only do buyers have more homes
to choose from, they need to jump on the lower interest rates while they last.

We are still in a Seller’s Market, and while the market is cooling, prices are stabilizing, not
dropping. What does this mean for a home buyer? Buyers should not have to offer 10% above the list
price to purchase a home today, which is a big relief for the buyers who have lost out on multiple offers
over the last year because they did not want to pay way above the market price. The buyer frenzy that
we have seen over the last 18 months due to low inventory and interest rates is cooling.

What do higher interest rates and inventory mean to sellers? First of all, with a 9% increase in
inventory, we still have low inventory levels with only a 2 month’s supply. Keep in mind that a healthy
inventory level in Houston is 3-4 months and 5-6 months in the rest of the United States. When
inventory levels in Houston exceed 4 months, we will be in a buyer’s market, but for now, we are still in
a seller’s market.

However, sellers should be cautious when pricing their homes today. Overpriced homes are not
selling like they were 6 months ago, and we are seeing those home prices dropping. Work closely with a
real estate professional to determine a realistic sales price before listing your home to avoid long market
times. Buyers are being more cautious as the news is heeding that real estate prices will drop soon.

Remember, the buyer’s affordability factor has dropped so the luxury market could be impacted
as interest rates rise. A $700,000 house purchase today with 20% down payment will result in the same
monthly payment as an $800,000 house purchase with 20% down payment did last year.

Whether you are a buyer or a seller, there is no need to panic, but you will need the guidance of
a real estate professional to help navigate through a changing market.

Assisted a Seller living abroad with $25k in renovations to flip their existing home and make another $40k on the sale!

If Your Home Is Not Selling, Schedule your FREE 30-minute Consultation to Evaluate Your Home’s Presentation and Price.


The Transformation:

Advised my client abroad to spend $25k in updates on a rental property in order to sell their property for $60k higher and faster. While a concierge remodeling company quoted $60k to update, I prioritized painting walls, changing counters, updating the master bath, and refinishing wood floors instead of installing new ones for $25k. My special touch is the selection of modern lighting to completely transform the space, and in this case, I kept the existing kitchen cabinet color based on new trends.

What was our Key to Success?

First, We Addressed The Challenges:

  1. Most contractors advised painting kitchen cabinets for $5k which was more than my client wanted to spend. 
  2. Wood floors were dated and damaged, but the replacement cost was $20k
  3. Due to the seller’s budget, we had a decision to make – the choice of replacing the carpet or painting the walls

Next, We Tackled The Solutions:

  1. I recommended keeping existing and just updating the counters and backsplash. Saved $5k!
  2. I found someone to refinish for $8k and saved $12k!
  3. I chose to paint all the walls the same light neutral color.


The Results

I sold the house in 20 days at top dollar for the Seller.

I managed the remodel and selected all the finishes saving the client $45k on the remodel. The house would have taken 3-4 times longer to sell without the remodel and the seller netted $40k more with my remodeling advice and contractor connections.

Client Testimonial

I give Sherry and her Energy Realty team a 5-star rating. The house was so nice that I considered not selling it. This was my sixth time working with Sherry and her agents make the buying and selling process seamless!

 We live in a fast paced society, and every day there is an announcement for anew  being online program designed to give us instant gratification and hopefully make our lives easier. We no longer want to drive to a store and even buy groceries-we want to log online, make our selections and have everything delivered to our doorstep, even at a higher price. We pay for convenience.

However, is this the right way to sell a house? I grew up to believe that a home is the largest purchase we make in our lifetimes, and they should be long term investments. IBuyer programs offer a quick and easy solution to sell homes with guaranteed cash offers to prospective homesellers, but at what cost? Compass and Opendoor just received $400 million a piece to expand their IBuyer practice and Keller Williams, Quicken Homes, and even Zillow have jumped on the band wagon.

I relate these programs to the car owner that changes their car out to a new car every 2-3 years, knowing that they won’t make any money on the car, but they will get that shiny new car and not ever have to deal with major repairs. Perhaps todays seller only wants to move on to the next best thing quickly with little hassle, but I advise every homeowner to carefully consider their options before choosing to sell to an IBuyer.

The IBuyer today is similar to “We Buy Ugly Houses”. These programs will take the house off your hands quickly with no hassle-you don’t need to paint, clean, stage, -de-clutter, or re-arrange your schedule to allow for showings. Big advantage, right?  Based on my research, these IBuyer programs charge on average 6.5% to sell your home, and they pay the homeseller less than market value! You are basically selling your home to an investor who plans to do the clean up and repairs you did not want to do, then sell your home for a higher price. The total loss on your home through this program could be 10-30%.

Today, the IBuyer program may only appeal to less than 10% of the population, but as more homesellers jump on the band wagon, this will lead to lower comps in the market and lower overall home equity. Tell your neighbors to be careful when approached with these type of programs, because selling your home through this program could drive prices down in your community.

Selling a home was never meant to be quick and easy-it should be strategically planned and marketed properly to maximize the return on your investment.  Seller Beware!

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