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For the second year in a row, economic forces affecting the entire country caused its share of disruption to the Houston housing market. While 2023 saw significant growth in housing inventory and moderation in pricing, it was ultimately mortgage interest rates, which leapt to 20-year highs, that prompted many would-be buyers to scrap purchasing plans or pivot to rental housing in 2023. As 2024 gets underway, Houston's residential housing landscape is considered to be on solid footing if you factor out the uncertainty of what the Federal Reserve may do with interest rates and lingering consumer jitters over inflation.

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• Months inventory continued to fall month over month from 3.5 months to 3.3 months.
  
• Total sales fell very slightly MOM
• Average pricing is up 0.3% YOY and median pricing is flat (0.0%) YOY.
• The 10 year US treasury sits at 3.93% as of this moment, however, has been up and down after CPI data was released yesterday
• CPI numbers released yesterday were up 3.4% YOY and up 0.3% from November (greater than expected).

• This last month was a slower than normal December for me, but the month of January has been busy. Very busy. I had 5 past/current/future buyer clients call me on 1/1 and 1/2 to discuss immediate and future buying plans, and all referenced lower interest rates as well as trying to get ahead of the market in 2024. I've learned over the years that when I have such large amounts of conversations that all say the same thing in a short amount of time, it usually is indicative of a trend. It got busy enough one day that Felipe and I had to tag team showings in each others markets, which is abnormal.
• If rates fall to where the market believes they will (I'm not sure they will fall quite as fast as the market believes), I believe this will be a busy year, and prices will be driven up. Probably not 20% in a year like we saw in years past, but I believe they will be up market-wide (and not just in submarkets / pockets like we saw in 2023 in the Villages, Oak Forest, etc).
• CPI numbers came in higher than expected, which caused the 10 year to shoot up yesterday, but since then, it's DOWN. Core inflation was right at expectations, and I think this was the cause for the market pulling back from the ledge. It's definitely still something we should be watching.
• Has the Fed actually pulled off a soft landing? Have wee seen the end of inflation? Maybe just the slowing of disinflation? 2024 is going to be another interesting year, I'd say.

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"In 2023 the Austin-Round Rock MSA housing market continued its move towards a more sustainable pace," Kent Redding, 2024 ABoR president, said. "Housing inventory reached the highest level it's been in more than eight years, and while there was a drop in closed sales and median close price, these were both symptomatic of higher mortgage rates. In the current housing market, prospective homebuyers and sellers should engage the services of an expert REALTOR who can help navigate the real estate transaction process. Buyers can utilize this favorable market condition to get pre-qualified while sellers can use the time afforded by the balanced market to enhance their property before listing it for sale."

"The single biggest factor constraining the Central Texas housing market in 2023 was the gradual rise in mortgage rates, which peaked in late October. This caused sellers, and buyers essentially, to continually readjust to the current rate environment. While we have seen some leveling off in home prices, the Central Texas region still lacks a sufficient inventory of affordable homes for sale, especially those homes priced below $300,000, which is keeping many would-be first-time homebuyers on the sidelines."

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• Median sales prices fell 10% YTD to $450,000 while Closed Sales fell 9% YTD to 30,438.
• Median sales prices are at $443,753 which is an 1% decrease YOY.
• Closed sales were down 8% YOY as many people are on hold waiting for rates to go down.
• Months inventory fell month over month from 3.7 months to 3.0 months. This is still 0.4 months higher YOY.
• It's been a busy month for me. I helped a TexAgs client with getting an offer accepted on a home in Round Rock at $39K below asking price!
• I also have one south Austin duplex with a pending contract and am getting ready to put another one of my client's up for sale.

• Median Home Prices for the B/CS in December dropped by $4K from $300K to $296K.
• Days on Market increased slightly to 97 days from 94 days
• Average Sales Price is $369K with a decent uptick in homes above $500K being sold or going under contract.
• I've posted charts below for Average Days on Market, Sales Price and New Listings - so you can see/compare how 2023 stacked up against the last 5 years!

• I have noticed new builds getting a lot more attention including quite a few completed/spec houses going under contract. My hunch here is that the lower interest rates combined with builder offers has been solid enough to entice buyers. Maybe some of the new coaching staff is buying houses?
• Is anyone else shocked at what the asking prices are for land across the Brazos Valley? You can get 30 acres by Madisonville/Centerville and close by I-45 for $250K (~$8k or so per acre) or you can get 30 acres in Navasota for $500K (~$16k/acre)
• Speaking of new coaches - went to dinner last night for the wife's birthday and we saw New Head Football Coach Mike Elko there with Mr Liucci. It was great to see him be so kind and genuine to all the folks that came up to him. He was also kind enough to sit at a few tables and talk with folks. Think he's going to be a great addition to Aggieland!

• It seems buyers are starting to poke out of their hibernation caves in hopes of lower interest rates. I've had a few parties reach out to connect with lenders in order to get all their ducks in a row and be ready to go if the opportunity presents itself.
• DOM decreased YoY throughout the metro, yet many counties still seeing price increases, and as it relates to Dallas county, major active listings growth.
• A poster above asked about the percentage of sales attributed to New Construction vs. Existing Inventory, the chart below paints that picture for the state: