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Houston Area - moving towards a buyers market?

2,321 Views | 15 Replies | Last: 2 yr ago by Red Pear Realty
Houston Lee
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9:32a, 10/14/21
AG
The real estate market in Houston turned crazy back in March 2021. Home values have risen drastically for a variety of reasons.

Since school started back in September, I have seen a slow down in the area of homes going from active to pending. We are seeing more and more listings with "Open House" and price reductions.

There are plenty of homes in the area that are sitting and/or have price reductions that months before would have flown off the market and had multiple offers.

(Houston, Katy, Cypress, Tomball, The Woodlands, Sugar Land, Pearland, Kingwood, Humble, Magnolia, Pinehurst)

Active number of homes with price reductions: 640

It seems like now is the time to go back to potential home buyers that got pushed out of the market by investors and tell them that there are homes out there that they can purchase without fighting with other buyers.
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MAS444
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9:40a, 10/14/21
AG
Doesn't the market always slow down after school starts? Not an expert but I thought the data still showed we're in a crazy seller's market. I personally hope you're right and the market softens some - not nessearily to a buyer's market but just more balanced.
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EclipseAg
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9:46a, 10/14/21
AG
Related: I look at small towns outside of Houston often and I've definitely noticed more inventory on the market, and a little longer time to a contract.

A year ago, houses were getting contracts in a day or two. Now I'm seeing some stretching out to two, three weeks (although the gems are still being snapped up right away).
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Houston Lee
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In reply to MAS444 • 9:56a, 10/14/21
AG
MAS444 said:
Doesn't the market always slow down after school starts? Not an expert but I thought the data still showed we're in a crazy seller's market. I personally hope you're right and the market softens some - not nessearily to a buyer's market but just more balanced.
Yes. You are correct. When school starts and with the Nov/Dec holidays, you generally see a slowing down of sales.
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evestor1
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10:43a, 10/14/21
The amount of buyers is 25% of what it was back in April - June. The yield on submitting offers is higher though.
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Red Pear Realty
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11:58a, 10/14/21
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I just posted some good Houston data here: https://texags.com/forums/59/topics/3239009/replies/60459600

As others have said, we are in the middle of the fall semester of school. Traditionally, the Summer sales season was the height of transaction volume, and ran from mid March to mid August. COVID kind of blurred the lines between work hours and non-work hours, and both last year, and this year, the sales season has extended beyond mid August until around mid October.

But back to the data.
  • There are currently 12% less listings on the market than there were at this same time last year, so available supply is down, even for this time of year.
  • We are currently sitting at 1.8 months of inventory, versus 2.4 months at this same time last year. 6.0 months is considered market equilibrium, and at the worst of the COVID panic, we didn't even hit 3.5 months inventory. Compared to this summer, when inventory was at 1.4 months, sure, buyers are getting a bit of breathing room. But 1.8 months of inventory means there are more than 3 buyers out there for every home that's on the market--and some of those sellers are priced way too high so in reality, its way worse than 3:1 odds.
  • WTI is trading above $80 a barrel, which is the highest it has been since 2014.
  • We are just starting to see evidence of inflation. The Fed is publicly stating its transitory and should be gone by the end of 2022, but I am not buying it. I think we are going to be in for a long 3-5 years.

Make no mistake, this is still very much a Sellers market.
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SteveBott
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1:18p, 10/14/21
AG
Agree with Pair the inventory is still way low for a buyers market. But if a seller thinks they will get top dollar without prepping the home like they were in the spring their listing could sit or draw less then list offers.

Buyers drop off substantially after school really gets started. Parents just don't want to deal with moving kids to different schools or commuting back to the old school. You will see a small increase in activity early November since they can close between semesters.

While rates have risen they are still pretty low. 30 years in the low 3's is cheap. It is just not as sexy as high 2's.

I do disagree about Pears inflation prediction. I'm sticking with the Fed forecast for now. And adjusted inflation at 4.1-4.3 is really not that scary anyway. Feds target is 2.5.
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plowboy1065
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6:36p, 10/14/21
S
I've been a realtor since 2013 and have not yet been in a buyers market. We are a long ways from being there now
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Red Pear Realty
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In reply to SteveBott • 6:43p, 10/14/21
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SteveBott said:
I do disagree about Pears inflation prediction. I'm sticking with the Fed forecast for now. And adjusted inflation at 4.1-4.3 is really not that scary anyway. Feds target is 2.5.


That they will admit to. I'd be really thankful if groceries and other core items only went up 4% for the next few years.

The other thing nobody has mentioned yet is the number of out of state folks that are moving to Texas, as well as the number of iBuyers that have started taking down houses. Just about every day I interact with an agent with an out of state buyer. Crazy. And I believe 1 out of every 7 "starter" homes were purchased by an iBuyer. Just those two factors alone have and will continue to push prices in the foreseeable future.
Sponsor Message: We Split Commissions. Full Service Agents in Austin, Bryan-College Station, Dallas-Fort Worth, Houston and San Antonio. Red Pear Realty
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Beckdiesel03
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8:12p, 10/14/21
AG
I work for a builder and nobody can grasp the amount of out of state buyers that call into the office a day. And it's all over not just Cali. Lately a lot of it has been the NE which is a newer thing for me over the last 2 years.
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mazag08
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In reply to plowboy1065 • 10:06p, 10/14/21
AG
plowboy1065 said:
I've been a realtor since 2013 and have not yet been in a buyers market. We are a long ways from being there now
I've got 5 years on you. Buyer's markets don't exist in states not run by rabid leftist economic morons.
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SteveBott
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In reply to mazag08 • 10:50p, 10/14/21
AG
I think you took a wrong turn on your journey to forum 16.

It's just down the hall
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Red Pear Realty
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9:30a, 10/15/21
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First call of the day. An agent from Floresville calling about a listing I have in Stockdale. His client is from California, looking to move himself and two other families onto the property (with additional mobile homes). So what is that, like 12, 15 people from CA? And looking to move to Stockdale....
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mazag08
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In reply to SteveBott • 5:03p, 10/15/21
AG
SteveBott said:
I think you took a wrong turn on your journey to forum 16.

It's just down the hall


Nope. Not when topics align.
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Win At Life
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In reply to mazag08 • 8:38p, 10/15/21
AG
mazag08 said:
plowboy1065 said:
I've been a realtor since 2013 and have not yet been in a buyers market. We are a long ways from being there now
I've got 5 years on you. Buyer's markets don't exist in states not run by rabid leftist economic morons.
It was a buyers market in Texas in 2010 after the 2008/9 financial crisis and ARM foreclosures. I picked up a foreclosure that had been on the market for one year with price drops every week for a year and no takers ($42/SF). It's now worth at least 4X what I paid after a little remodel work. The only other true buyers market I remember was after the oil bust of 1983/4. They don't come around very often.
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Shooter McGavin
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9:45a, 10/17/21
AG
I put a house on the market Saturday morning in the low $300's. I've had 10 showings as of Sunday morning and two offers well above list. One is all cash, buyer paying title, quick close and offering a 30 day leaseback (not free) so the seller can find another house.

This house is not exceptional but has some updates. The seller made almost no effort getting it ready.

Why is it such a hot property? There are zero competing listings in the development. We have no competition.
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Red Pear Realty
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12:35p, 10/17/21
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https://www.yahoo.com/finance/news/home-prices-will-grow-a-further-16-by-end-of-next-year-goldman-forecast-203019920.html
Sponsor Message: We Split Commissions. Full Service Agents in Austin, Bryan-College Station, Dallas-Fort Worth, Houston and San Antonio. Red Pear Realty
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