Houston

• What a crazy month it has been since my last update.
• Interest rates are still high, but they have seemed to calm down a bit. I've got folks getting approved in the high 5% range right now.
• The story of this last month has been a continued lack of inventory (2.7 months). The market is starved for available homes. I don't want to go into specifics of my properties that are under contract until after they close (because those addresses are public information now), but each of the three listed properties I helped buyers put under contract in the last month went for over asking price with multiple offers. We had to get aggressive to get them, and each of them went very quickly.
• I have multiple clients looking to buy in the Greater Houston area who have put in offers as high as $50,000 over ask price, who are still looking for homes. It's very difficult to see couples with two incomes, who have seemingly done everything "correctly" (dual income doctors, attorneys, O&G folks, etc) who cannot get a home under contract, even after offering a lot more than asking on homes. Submarkets like Memorial, GOOF, Cypress, Katy, etc. It seems to be city wide, and price non-discriminatory. Anything from $400,000 all the way up to $1,500,000.
• The difference in this year and last year is that not EVERYTHING is selling, regardless of price and condition. If the property is way overpriced, or needs work, its sitting. Just because you have a house does not mean you will sell it. At 6%+ interest rates, buyers are letting the ones that need work sit unsold. Remember, pigs get fat, hogs get slaughtered.
• I put together an off-market deal that was really fun as it seemed to be a "win" for both buyer and seller.
• See image below for year-over-year data. Month over month, average pricing is up over 6%, and average pricing is up 1.5%. I think pricing climbs in the April data.
• My overall deal volume is down a lot year over year for closed or under-contract deals. Just to give you an idea, so far in 2023, I've done 6 leases, 7 buy-side deals, and just 2 sales. Crazy to have done more leases than sales, but that just shows you where this market is. My overall deal volume is probably down at least 25% in 2023.
• One of the weirdest things about higher interest rates has been the change in the calculus relating to buyers selling their existing homes vs. renting them. A year ago, I was recommending that everyone hold and rent their homes if possible. HOWEVER, at this point, in some situations, it seems like folks are choosing to sell their old homes because their new interest rate is high enough that their equity from their existing home is better used to reduce their new loan balance in their new home. This argument only gets stronger as interest rates get higher. Something to consider. I'm a big proponent of building wealth through real estate, but you have to do the math on your own situation to decide what is the best option for you.

https://www.har.com/content/department/newsroom?pid=1934

https://www.harconnect.com/wp-content/uploads/2023/04/har_weeklystats-23-14.pdf

Red Pear Realty said:

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It's very difficult to see couples with two incomes, who have seemingly done everything "correctly" (dual income doctors, attorneys, O&G folks, etc) who cannot get a home under contract, even after offering a lot more than asking on homes.

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As an individual who falls into this category, and was looking to purchase a home in the next 6-12 months, this is incredibly depressing...

Red Pear Realty said:

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Houston

• What a crazy month it has been since my last update.
• Interest rates are still high, but they have seemed to calm down a bit. I've got folks getting approved in the high 5% range right now.
• The story of this last month has been a continued lack of inventory (2.7 months). The market is starved for available homes. I don't want to go into specifics of my properties that are under contract until after they close (because those addresses are public information now), but each of the three listed properties I helped buyers put under contract in the last month went for over asking price with multiple offers. We had to get aggressive to get them, and each of them went very quickly.
• I have multiple clients looking to buy in the Greater Houston area who have put in offers as high as $50,000 over ask price, who are still looking for homes. It's very difficult to see couples with two incomes, who have seemingly done everything "correctly" (dual income doctors, attorneys, O&G folks, etc) who cannot get a home under contract, even after offering a lot more than asking on homes. Submarkets like Memorial, GOOF, Cypress, Katy, etc. It seems to be city wide, and price non-discriminatory. Anything from $400,000 all the way up to $1,500,000.
• The difference in this year and last year is that not EVERYTHING is selling, regardless of price and condition. If the property is way overpriced, or needs work, its sitting. Just because you have a house does not mean you will sell it. At 6%+ interest rates, buyers are letting the ones that need work sit unsold. Remember, pigs get fat, hogs get slaughtered.
• I put together an off-market deal that was really fun as it seemed to be a "win" for both buyer and seller.
• See image below for year-over-year data. Month over month, average pricing is up over 6%, and average pricing is up 1.5%. I think pricing climbs in the April data.
• My overall deal volume is down a lot year over year for closed or under-contract deals. Just to give you an idea, so far in 2023, I've done 6 leases, 7 buy-side deals, and just 2 sales. Crazy to have done more leases than sales, but that just shows you where this market is. My overall deal volume is probably down at least 25% in 2023.
• One of the weirdest things about higher interest rates has been the change in the calculus relating to buyers selling their existing homes vs. renting them. A year ago, I was recommending that everyone hold and rent their homes if possible. HOWEVER, at this point, in some situations, it seems like folks are choosing to sell their old homes because their new interest rate is high enough that their equity from their existing home is better used to reduce their new loan balance in their new home. This argument only gets stronger as interest rates get higher. Something to consider. I'm a big proponent of building wealth through real estate, but you have to do the math on your own situation to decide what is the best option for you.

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this is my clients right now. Looking for decent properties west of the loop is a beatdown right now.

To make sure we weren't just totally snake bit, I used the HAR Statistics package to compare median list price vs. median sale price for resales in Areas 22 & 23 ($1.2-1.8M).

The "over list" premium was even higher than I had guessed.

Well.... that is worse than I expected.

Are these over list sales predominantly attributed to relos or inter-market moves?

Haven't looked at the data but gut instinct says HOU is still getting a lot of transplants with lots of cash to burn.

From what I have seen in 2023, for the most part, the only people who are selling are those who are getting divorced, have died, or who are moving for work. However, that is starting to change as I mentioned above due to higher interest rates.

Thanks for always posting this data. It's super helpful. Thank you, OP.

Bryan / College Station Area Statistics:

• Average Sales Price is up 11% Year over Year, but the volume is down 20%. Market is even more starved of supply as compared to last year, and last year was pretty barebones in the terms of listings.
• Most houses moving to under contract in 10-12 days or sitting way longer and price dropping.
• Good Houses are going fast and there are lots of buyers for limited properties and sellers are taking offers almost as fast as they arrive.
• Best example was a client wanting to see a house on Saturday, I reached out on Friday to get the showing set up and the seller had just received an offer and was taking it and canceled all remaining shows. First mover advantage is real, so guess what my client did on the next house they saw that checked their boxes? They were the first bite and successfully nabbed the deal.

• Price range from $200s-700s are very active. Last Thursday, a house across the street from me listed at $675K for ~3100sf and wasn't on the market for 12 hours before going under contract. This was during the mini-monsoon we had late last week.

Bryan:


College Station:



Brazos County:

bkag9824 said:

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Are these over list sales predominantly attributed to relos or inter-market moves?

Haven't looked at the data but gut instinct says HOU is still getting a lot of transplants with lots of cash to burn.

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From my experience with my clients - its 75% Relo and 25% inter-market split.

Austin-Round Rock Market Statistics

ABOR Housing Data

Quote:

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"This spring has ushered in a sweet spot for both buyers and sellers," Ashley Jackson, 2023 ABoR president, said "There are three times the number of homes on the market than a year ago, bringing more choice and opportunity to homebuyers in over a decade. REALTORS are reporting that they are busy and the market is moving at a much healthier pace than it has in years. If sellers work with a REALTOR to price and market their home correctly, it's going to sell."

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The ABOR president hit the nail on the head. As realtors, we have to do everything we can to make sure we are pricing the houses correctly. This isn't the free for all where anyone could sell their house and get offers of $50K over asking. The people selling or buying houses in Austin are now the one's who really need to. I'm not seeing much investor action with rates over 6%.

• The sky isn't falling! The market seems to be correcting itself which bodes well for first-time homebuyers.
• Caldwell County saw the only single digit decrease in median sales prices while all the surrounding counties had double digit drops.
• We are now at 3 months of inventory for the region which means there are now 2 buyers to every listing. It's still considered a seller's market but many sellers are using incentives due to the increase in active listings.
• Red Pear Luke and I tag-teamed to help our client earned a total rebate of almost $12K! Red Pear Luke sold his property and I helped him purchase his new property here in Georgetown.

Austin-Round Rock


Bastrop


Caldwell


City of Austin


Hays County


Travis County


Williamson County

A lot of us predicted this at the start of the rate raising party. High rates combined with ongoing supply problems and a lack of building was never going to result in the crashing prices many buyers were cheering for. Gridlock! How long can it hold and which force will win?

979ag said:

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Red Pear Realty said:

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It's very difficult to see couples with two incomes, who have seemingly done everything "correctly" (dual income doctors, attorneys, O&G folks, etc) who cannot get a home under contract, even after offering a lot more than asking on homes.

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As an individual who falls into this category, and was looking to purchase a home in the next 6-12 months, this is incredibly depressing...

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+1

Good info, Red Pear. Always interesting.
What rental markets/price ranges do you see most in demand? Are the renters you're working with just trying to wait out the higher interest rates?

College Station Stats are up!

I don't rep many tenants so probably not the best to ask. I also have done more leases so far this year than I think I did all last year. I did help one of my wife's friends lease a place in the Heights. She is coming from out of state where she owns some rentals, so she was qualified to buy here, but chose to get a lay of the land for a year before buying next year.

100% spot on regarding pricing and what is and isn't selling. I put an offer in on a gorgeous home in immaculate condition but it's very overpriced. They would have had multiple offers, mine included, had they priced where it should be.

As emotionally attached as I am to the house, I'm not dumb.

SA Place Holder

So buy land and build??

Stringfellow Hawke said:

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So buy land and build??

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Wait....that's all I have to do?!?! Wish someone would have told me!

Serious question. I'm trying to sell a house in Sealy, right outside of the Katy/Jordan Ranch area. I feel like giving a significant discount per sq ft over local competition. Would that be a better solution, or what would y'all recommend to be more aggressive? I know that it's an extra 15 minutes but saving around 200k and the extra tax benefits seem like it should be helpful.

First time selling a house so I'll take any and all advice for the same market. Not trying to sell the house to yall but here's the link if anyone has a minute to critique.

https://www.zillow.com/homedetails/115-White-Wing-Ln-Sealy-TX-77474/2058059666_zpid/

Any chance you can provide details for the DFW market as well?

Thanks.

Temple/Belton Area Statistics:

• These areas are like Dr. Jekyll and Mr. Hyde! The median sales price for Temple is down 3.9% YOY while the median sales price for Belton shot up 25% YOY!
• Temple experienced an increase of 14% in closed sales YOY while Belton had a decrease of 21.7%.
• Both markets are still considered in a seller's market with both of them averaging about 2.6-3.0 months of inventory. That equates to about 2 buyers for every listing.

Always do a home inspection! It doesn't matter if it's a newly constructed home or even a renovated older home. My clients and I had to withdraw our offer on a newly renovated home in Temple. The seller stated that the plumbing had been updated. Everything was renovated except for the plumbing in the sub-floor. Our home inspector found exterior rusting in the cast iron plumbing and advised us to get the plumbing scoped. Our plumber found out that there was a break in the sewer piping. The wastewater was never getting to the city connection. He figured it would've cost at least $10K to update the plumbing to PVC from the city connection to underneath the (pier and beam)house. Needless to say, that killed the deal as the seller didn't want to budge.

Temple


Belton

North Texas

• After holding on to median price increases, DFW follows its other Texas city peers by posting a YoY median price decrease across the Metroplex.
• Interestingly enough, this is with an extremely relatively tight inventory of 2.1 months. However, inventory continues to grow with active listings up 129.8% YoY and Days on Market increasing by 28 days to 91 in March 2023. For perspective, Months of Inventory was 0.8 in March 2022.
• It appears that even in a low inventory environment, Powell has achieved his goals of cooling the Housing market and it emphasizes the diminished affordability non-cash buyers have in today's market.
• Virtually all North Texas major counties posted YoY price declines, with the holdouts being Rockwall & Parker Counties, which funny enough even though on opposite sides are my favorites when it comes to neighborhoods.

First Hand Experience

• I'm seeing robust activity when it comes to listings in the CBD, however, when it comes to listings in the further out suburbs, activity is greatly reduced due to builder inventory availability and overall increase in competition due to Buyers having a wider area to choose from.
• Price reduction conversations are starting to become more reasonable, whereas before sellers would not even contemplate it.
• For a buyer client in East Dallas, we were able to come in $10k under ask, and ended up at list with a new roof estimated at $15k and additional concession of ~$2k. Sellers are willing to work with Buyers within reason.

Other North Texas counties available upon request

I'm always curious what a seller expects to happen next in these situations.

They can either a.) disclose known issue to next buyer and hope they don't care about major plumbing issue (yeah right) b.) not disclose it and hope the next person doesn't do an inspection (and doesn't find out that seller is filthy liar later on and sue the pants off them)

Just seems short sighted. Had this happen to my client when the seller was a relo. We backed out when they didn't budge. I think they ended up selling for roughly $50K less to (try to) avoid the ~$10K repair.

Now do Abilene…

Diggity said:

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I'm always curious what a seller expects to happen next in these situations.

They can either a.) disclose known issue to next buyer and hope they don't care about major plumbing issue (yeah right) b.) not disclose it and hope the next person doesn't do an inspection (and doesn't find out that seller is filthy liar later on and sue the pants off them)

Just seems short sighted. Had this happen to my client when the seller was a relo. We backed out when they didn't budge. I think they ended up selling for roughly $50K less to (try to) avoid the ~$10K repair.

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I've been keeping up that same property and have checked the disclosures and they have NOT been updated. If it goes under contract again, I'll be reaching out to the buyer's agent to make sure they have received the updated disclosure.

don't blame you.

some real ****ty agents out there

Austin-RR stats are up!

DFW is up