HOUSTON

Quote:

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The Greater Houston housing market showed signs of stability in September after recent market fluctuations. Home sales rebounded, prices held steady and inventory remained sufficient to meet buyer demand. These positive indicators point to a more balanced market. - HAR President

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My Take

• I am late on the draw on this month's post because we have all been pretty busy. Here we go!
• September was a hot one! I closed deals in Memorial, Oak Forest, Rice Military, Brookshire, and Santa Fe, AND picked up several new listings (including a portfolio in Galveston), AND closed on our commercial loans for our developments in Oak Forest and Spring Branch. A real estate agent told me this last month that her company brought in a consultant who predicted that their company would do 40% of their 2024 revenue in 4Q and I laughed at that, and then the next day a seller called me who wanted to liquidate a portfolio of 6 houses in Galveston. Maybe not so crazy after all.
• Even with the little interest rate decline that we've seen since the first half of the year, buyer demand is definitely up. I had two different clients get into multiple offer situations this last month, and we are outside of the normal "busy season". This winter will definitely be telling, but I could definitely see us back in a 2022 type of market next spring/summer.
• The inventory that is on the market kind of stinks right now, and good homes are tough to find for my buyers. A lot of sellers are just in denial about what they have and want more than top dollar for it. Case in point. I had a buyer client go under contract on a home about two months ago. The house had a 25 year old HVAC system that went out between contract signing and the inspection, the wiring was not grounded even though they had 3 prong plugs throughout the house, and the insurance companies (140+) all rejected the 15 year old roof (partially because of the age and partially because of a large oak branch that extended over the roof). We did our inspections, told the owner and agent about all these issues, and they refused to fix them. Basically told us, "take it or leave it". So we left it. About 60 days later, it's still on the market, but the seller finally replaced the roof and HVAC system, but has done nothing else. And then they increased their asking price by 10%. DELULU.

The Facts

• Home sales were UP slightly (1.7%) for the first time in months.
• On a related note, inventory was actually DOWN from 4.5 to 4.4 months. It should be going up in September in a normal year. We will know a lot more over the winter months.
• Sales prices were essentially flat, with an increase of 0.3% and 1.1% in the mean/median pricing year over year.
• The market is betting with about 92% certainty that the Fed will drop their interest rate target 25 bps in its November meeting just after the election.
• The 10 Year Treasury is at 4.132% as I type this.

https://www.har.com/content/department/newsroom?pid=2124

https://www.cmegroup.com/markets/interest-rates/cme-fedwatch-tool.html?redirect=/trading/interest-rates/countdown-to-fomc.html

https://www.cnbc.com/quotes/US10Y

Dallas / Fort Worth

• Sales across the Metroplex rose 1.3%, however, this is likely more a factor of inventory increasing dramatically (41% YoY) with 4.1 months of inventory compared to 2.8 in September 2023.
• Overall, median sales price is down 1.3% due to rapid increase in inventory and persistently elevated interest rates.
• Earlier this month 30-Year Conventional rates with no points down were inside of 6.5%, fast forward to today and they've jumped 25bps due to the run up in treasuries.
• This is causing a grid lock on existing inventory, as not only are we in the slower part of the season, but interest rates are not helping at all.
• Some sellers are starting to realize that past comps are likely top of market indicators more so than current market indicators. I just put a deal under contract at $580k, which originally listed for $620k and reduced 2 weeks ago at $599k. Crazy thing is that there was an exact comp that had traded a month prior to listing which supported the $620k price point.
• I think we are at a point were coastal migration has tapered off and typical buyers are those who are local to DFW, thus more susceptible to affordability pressures.
• Conversely, I was chatting with a property manager for a big apartment operator who mentioned that she had seen an up tick in people terminating their leases due to buying homes. I think some people are taking opportunities and still forecasting lower rates next year to refinance.
• However, the bond market seems to be more skittish on the rate cut plan, thus, the recent rise in treasury yields.

Bryan / College Station Area Statistics:


My Take:

• "Its not the price of the homes, it's the monthly cost of the home that just doesn't make sense" - This quote encapsulates the current market in Bryan/College Station. Simply put - people are having a hard time rationalizing the expected monthly burden of owning compared to their current situation. Every agent and person I've talked has echoed this sentiment.
• Almost all of my current clients are investors and they are all coming at any potential transaction looking to make DEALS and are quicker to cut bait than you see Nic Scourton sack a QB who trash talks Kyle Field or the 12th man. But really though - it feels like anything happening right now is either cash or someone who has the cash and doesn't care about the rate.
• I had an agent reach out to me asking if my clients was still interested in their property because they "recently dropped the price and the sellers are wondering if your clients would be interested? My client is willing to try and make a deal!" In reality - they dropped the asking price by $30K (almost 8%) over 40 days ago and still hadn't garnered much interest.
• I am working on a commercial transaction for an apartment complex. It was previously under contract but that sale fell through and the buyer I am working with was able to offer 20% lower then the previous bidder/contract and was successful in getting awarded the deal because they promised to close by 12/31/2024. I am not going to brag about the numbers, but let's just say the savings was easily over $2M.

The Facts:

• Homes are continuing to sit on the market for longer - Evidenced by the average days on market increased by 5 days from August's 93 days to 98 days in September (see College Station-Bryan MSA data page). Sellers are marking prices down (sometimes repeatedly) and still not gaining traction with buyers.
• Active listings are down slightly 1,239 in August to 1,215 in September.
• Closed Sales are down from 287 closed sales in August to 204 sales in September. That represents a 28.9% decrease month over month. Will be interesting to see October closed sales to assess the post-fed rate cut dip we had.

Bryan/College Station MSA:





Brazos County:


Bryan:



College Station:



Rental Stats Thru Sept:

ElephantRider said:

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Dropping the ball, Luke

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I'm sorry we aren't meeting your standard with presenting free data to the public! I wouldn't describe our presentation as spotty but it's ok to disagree. Our first duty is to our clients and day to day responsibilities, so we will always put those before this. I've tried to communicate recently that each of us has had an unusually high workload for an October and I don't think many here understand that the market is on the verge of exploding again. I just found out that another house a client was going to look at today already has multiple offers. That kind of thing has a way of making plans get delayed.

Red Pear Realty said:

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I'm sorry we aren't meeting your standard with presenting free data to the public! I wouldn't describe our presentation as spotty but it's ok to disagree. Our first duty is to our clients and day to day responsibilities, so we will always put those before this. I've tried to communicate recently that each of us has had an unusually high workload for an October and I don't think many here understand that the market is on the verge of exploding again. I just found out that another house a client was going to look at today already has multiple offers. That kind of thing has a way of making plans get delayed.

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Sorry for the complaint, and apologies for not better appreciating what is put forth on a free forum.

Some MLS' are faster than others when reporting data as well.

You don't need Red Pear to pull the data for you. They're not compiling the data, just bringing it over from each association's database. For instance, I have been watching the Highland Lakes area. I can find current and historical monthly data here: https://www.highlandlakesrealtors.com/pages/monthlymarketstats/

It's nice of Red Pear to consolidate all that data here for us, but probably their most valuable information is their personal anecdotes of what they're seeing.