HOUSTON

The Facts:

• Interest rates for owner occupied homes jumped to the mid-7% range this week. This is all dependent on the deal and your credit profile, but there was definitely a decent jump in rates this week.
• Inventory continued to inch up to 3.2 months vs. 3.1 months inventory last month.
• Median home price is down 2.3% YOY while the average home price is actually up 0.6%
• Compared to July 2019, before the pandemic, sales were down 15.3 percent, and compared to July 2018, five years back, they were down 5.8 percent.
• Days on Market (DOM) for single-family homes rose from 27 to 42 days.

https://www.har.com/content/department/newsroom?pid=1974

My Experiences:

• My personal deal volume is down about 35% YOY. But it's skewed such that I've done a LOT more leases this year than sales. I'll talk about three notable transactions from July. I know I've mentioned my deal board before, and while its still tilted dramatically toward future buyers, this last month its shifted a bit back to having some "seller" weight to it. If you are looking to sell, I would not doddle around.
• I helped a very nice couple close on a great home with a sweet back yard and pool setup in west Houston. The lesson on this deal was that you need a good Aggie team (including your lender) fighting for you, and sometimes its best to cut the other agent out of the loop and for your client to go speak with the other party directly. We had been looking for over a year so it felt good to help them find a great "forever" home like this.
• We closed a beachfront property in Crystal Beach that was a really fun deal. The lesson here was that sometimes, it's time to offer WAY under asking price just because you can. And sometimes you just might get it.
• Finally, I closed a great deal in Lake Jackson with an Aggie investor. That will be a fun house to make a home! Even in this market, you can find good ones, and in this case, it was one that someone else passed up after getting it under contract. Just because you pay all cash, does not mean that you are entitled to a $50,000 price chip in the option period for no reason. Also on the note of Lake Jackson, did y'all know this was here? Anyone know the name of the restaurant where this is located without looking it up?

That's Asiel's restaurant. They found those woolly mammoths in the sand pit behind BWood HS before it was filled up and turned into a lake. Used to go play down there when I was in middle school.

14TheRoad said:

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That's Asiel's restaurant. They found those woolly mammoths in the sand pit behind BWood HS before it was filled up and turned into a lake. Used to go play down there when I was in middle school.

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Winner!

Red Pear Realty said:

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• Also on the note of Lake Jackson, did y'all know this was here? Anyone know the name of the restaurant where this is located without looking it up?

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That's in Clute sir. You were on the north side of Dixie drive

979ag said:

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Red Pear Realty said:

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• Also on the note of Lake Jackson, did y'all know this was here? Anyone know the name of the restaurant where this is located without looking it up?

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That's in Clute sir. You were on the north side of Dixie drive

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He means East side. He must be from Richwood /s

But if you're on Dixie, Picket Fence and Taste of Nations are better choices than Asiels (other than the cool manmoth skull)

The herd in sales, mortgage and title is being thinned.

Austin-Round Rock Housing Data

July 2023 Data

Quote:

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"July's housing market activity underscores the resiliency within the MSA's market," Ashley Jackson, 2023 ABoR president, said. "We now have a direct year-over-year comparison of when our market began stabilizing, and the big fluctuations we've previously seen have started to even out. Potential buyers who have been on the fence about purchasing a home should know interest rates are settling, and now is the time to act. Working with an experienced REALTOR is the best thing you can do because they can help you make quick and confident decisions."

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• Medium sales drop of 10% to $462,000 YOY.
• An increase of 0.6% in closed sales YOY. People are still buying homes even with interest rates being higher than last year.
• It's taking 59 days from listing a home to contract. That's an increase of 37 days YOY. We were selling homes in less than a month last year.
• 14% increase in pending sales YOY should help out closing homes next month. I'm curious to see how closed sales did.
• I had two buyers close last month! My buyer clients saved an average of $5500 in closing costs by being Red Pear Realty clients.
• One of those closings was a site built home. Many often wonder if an agent is really needed with a brand new built home. I absolutely recommend using an agent anytime you're buying a new build. It doesn't matter whether it's new or a resale. They were also able to use our buyer rebate plus the home builder incentives.
• Some sellers will sometimes reject an offer with an FHA loan attached to it. I was able to close on a home earlier this week where the seller needed to do some FHA required repairs. It was a win for my client!

Austin-Round Rock


Bastrop County


Caldwell County


City of Austin


Hays County


Travis County


Williamson County

Bryan / College Station Area Statistics:

• A tale of two "markets" - average Days on Market for CS is 69 days vs 90 days for Bryan.
• The numbers compared to last year are almost the same for College Station, but are up 27 days from last year in Bryan.
• Inventory gap between the two cities is almost 1 month, as there is 2.0 months of supply for CS and 2.7 months for Bryan. Where as this time last year, the inventory supply was 1.7 vs 1.8 months respectively between the two.
• Home Prices across the Brazos Valley are up ~7% since last year.

My Take and Transactions:

• Deals still need some finesse and patience to get done. You need to really be flexible & patient with working the seller or buyer. Deals these days are never going to go either party's way.
  
• One of my deal's had the seller demand we close 2 weeks early (they were corporately relocating). So I worked with the Aggie lender and we came back a day later to the seller saying "cant do two weeks but we can close 1 week early", but the seller had already made other plans and said "no thanks". We were puzzled about why even make the demand/request in the first place?
  
• The $750K price range seems to be dividing upper line - where buyers are still committing to deals under that price but struggle as we close or above. Example is one house listed at $775K go under contract in 36 hours (before my clients could get to town that weekend to see it). But others around the $800K have sat at or longer then average Days on Market
  
• Homes from the $250-$500K range are still pretty competitive **if they are priced right**. New builds in that range also seem to have decent demand as well. Some builders might be offering interest rate buy-downs to help the affordability.

Bryan/College Station:



Bryan:



College Station:



If anyone needs a surrounding city/area - let me know!

BCS stats are up!

Frustrated in Bryan.

Considering selling in Austin Colony (2880sqft w/pool), and seems the going rate for newer builds is $200-220sqft.

Yay, great, except that's means market is about 75% higher than last time. So just to get something comparable to what I currently have, the purchase price would be in the $650-$750k range.

That means that in addition to paying 7ish % interest, my tax and insurance bills will double…..for not much different.

Just doesn't seem to make any sense, but when I drive around at the areas we are considering there are houses going up (sold) everywhere. How are people affording this market???

Any insight into DFW market?

AggieKatie2 said:

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Frustrated in Bryan.

Considering selling in Austin Colony (2880sqft w/pool), and seems the going rate for newer builds is $200-220sqft.

Yay, great, except that's means market is about 75% higher than last time. So just to get something comparable to what I currently have, the purchase price would be in the $650-$750k range.

That means that in addition to paying 7ish % interest, my tax and insurance bills will double…..for not much different.

Just doesn't seem to make any sense, but when I drive around at the areas we are considering there are houses going up (sold) everywhere. How are people affording this market???

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The tough part is looking at the other side of the equation....

Should we get any sniffle of rates being cut by the fed, I could really see another sustained uptick in demand for real estate as people can afford more with lower rates. It's going to push everyone back in trying to bid stuff up.

It feels like a damned if you do or damned if you don't situation. To which I would recommend that you just need to worry about when is the time right for you and no be worried about what ifs (as logical or illogical as they may be). If you decide to move forward, just need to mentally be comfortable affording that number knowing that if rates do ever drop, you can always refinance lower.

I think you answered your own question.

It doesn't make sense for your situation.

Pretty wild video below that is so full of stats I can't post them all. Biggest eye opening stat for me:

Quote:

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The share of outstanding mortgages for one-to-four unit properties with a missed payment stood at a seasonally adjusted 3.37% at the end of June, according to the MBA. The percentage reflected a 19 basis-point drop from 3.56% at first-quarter's end, the second lowest delinquency rate at the time since at least 1979, when the MBA first began reporting the data. At the end of second quarter 2022, the national delinquency rate was 3.64%.

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https://www.nationalmortgagenews.com/news/delinquency-rate-now-at-its-lowest-since-1979

Austin data is up!

North Texas / DFW Metroplex

Rockwall still hanging on to price increases. I'll have to do a deep dive to see what is going on in that market and report back to the group. Definitely an anomaly from the broader market.

Inventory months are starting to be in the 2s or greater, still low, however, a nice change from the 1s we have seen in the recent pass.

I sound like a broken record but the most desired areas/suburbs of the metroplex are still seeing a competitive multi-bid process play out. Specially for homes that are newer/renovated.

On the other hand, I have seen specific softness in townhome product. In particular I have been following a community in Fort Worth were the builder was able to increase prices throughout the three year development period by $200k-$300k for homes that started in the 370s-400s. Some of those homes that sold in the earlier part of the development are hitting the market, asking for the top end of the range of the final new build sales and they have sat on the market with little to no activity. Most sellers end up pulling the listing but the ones that need to move it have started to beat down the price significantly. Digging further, some of these listing were rentals or AirBnBs but they were unable to rent out or get the demand necessary to generate adequate cash flow.

I think we see some good opportunities in the horizon.





















Other North Texas counties available upon request

Have a friend who is a realtor in Rockwall. They sold us our current home. The demand is still strong. We have a 3250 sq.ft. '88 build 1.5 story(game room over the garage),with a 6 year old pool on 1/3 acre in a lakeside neighborhood. If we were to put our home on the market I have no doubt we'd get multiple offers on day 1. Loved it when we moved here 5 years ago but the overwhelming growth has created a traffic nightmare.

To quote one of my favorite Eagles recordings off Hotel California, specifically "The Last Resort".

You call someplace paradise
Kiss it goodbye

Wow.

Quote:

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• Demand for Houston rental homes soared in July, reflecting a continued quest for alternate housing amid lingering concerns about affordability and interest rates.
• July single-family home rentals jumped 19.0% year-over-year, with the average lease price up 3.0% to $2,363, a record high.
• A total of 4,211 leases were signed compared to 3,631 in June 2022. That is the highest volume of single-family leasing ever recorded.
• New listings of single-family rentals rose 11.6%.

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https://www.harconnect.com/wp-content/uploads/2023/08/edge082123.pdf

Any details for San Antonio/New Braunfels/San Marcos area?

Quote:

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In Bexar County, a total of 2,152 properties were sold, a 7.1% year-over-year decrease. Despite this, the average price displayed a positive trend, showing a modest 0.4% increase to reach $361,244. The median price, however, experienced a slight 2.7% year-over-year decrease, settling at $305,000. T

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What I'm noticing making the biggest impact on Buyers and Sellers in this area:

• Market has slowed down. Houses are still moving, but it's taking longer. SA area has always been on the longer end of the Texas Days on Market, but it is increasing pretty steadily each month. This is worrying Sellers, who got used to houses selling within a month.

Personal Deals from July:

• Helped Buyers secure a La Vernia lot to build their dream home after a long search for the perfect property
• Helped an Investor snag a city lot in Seguin for under market value to build an income source

https://sabor.com/Market-Research-and-Statistics/Market-Statistics/San-Antonio-Area-Market-Report

This just popped in my feed from CNBC. Waco coming in at #6.

https://apple.news/AgX-e5C3WTDa-Zgg421Dohw

"Texas has long been a migration hotspot in the U.S. The population grew 43% between 2002 and 2022, according to U.S. Census data. But despite this growth, home prices are slightly cheaper than the U.S. average, which makes for some of the most affordable homes in the country.

Here's a look at the top 15 cities for first-time homebuyers, along with each city's median home price.

Killeen, Texas: $252,833
Wichita Falls, Texas: $186,650
McAllen, Texas: $210,833"

Red Pear Medina said:

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WHERES COLLEGE STATION?!?!?

I know this is the July market update thread, but in advance of the August update, what have y'all been seeing over the past few weeks? I'm curious on the general trends as well as the Houston area specifically. We listed our home two weeks ago, and while it had decent initial interest, the past week has been completely dead. It looks like 30-year rates have come down off the crazy spike last week so I'm hoping that generates some activity this weekend...

I know you asked about Houston but I have my house listed north of Fort Worth. Same thing. Lots of initial interest and then it just died. Weeks without showings. Have had 3 showings this week which is more than I had in the 30 days before that.

Im selling one in north Bryan. Definitely seems to be more lower/ middle income homes hitting the market. I assume rental owners like myself, either getting out from under ARM loans or getting away from increasing taxes/ insurance. Everyone should have plenty of equity but if enough of these houses hit the market, it could hurt. I dont know if there's enough buyers that can handle the current rates. The B/CS starter home market has always been rock solid but Ill admit Im a little concerned.

This will probably be the last one I sell. If things crater, I'll start refinancing my keepers and go through another cycle of expansion. If not, Im happy where Im at with my remaining places either being free/ clear or on fixed 30 years.

I'll be honest - it's been really quiet. The only ones who are generating any activity are the sellers.

I know most of my buyers are just completely turned off at these interest rates - mostly due to sticker shock on monthly payments. That combined with the few houses that they are interested in getting snapped up, just saps the motivation.

Some interesting data for North Texas and specifically Fort Worth:


Median Days on Market increased 289% in August to 35 days for Fort Worth Townhome product and 90% for single family.

Single Family:




Single Family:




Townhome:





Single Family Showings Per Listing:

You are also getting to the tail end of the showing season. Things will continue to slow down until December on average. Rates are exacerbating that trend.

my traffic has been slowing. Had lots of "about to writes" then everything went kerplooey in the beginning of the month

Any data for August? I've gotten addicted to tracking this stuff...

I'll start working on my post now! Of course they posted Houston the week I got slammed!