Experts offer mid-year look at Houston real estate market
It’s summertime, which typically means an uptick in relocation activity in the Houston area, as people rush to get their children moved and settled before the start of the school year.
For that reason, relocation buyers and sellers need to be able to have a clear and accurate understanding of the local market.
And while there are market statistics readily available, they tend to examine the Houston market from a broad perspective, as opposed to drilling down to specific neighborhoods and properties.
The most recent MLS report released by HAR (Houston Association of Realtors) revealed an increase in the number of homes on the market.
While that sounds like good news for people who are moving to Houston, since more inventory means more choices, that doesn’t necessarily reflect the availability of properties in all areas of the city.
“That’s why it is hugely important for relocation buyers and sellers to work with a Realtor who has expertise in specific market areas,” said Kirsten Abney, senior vice president of Heritage Texas Properties. “A buyer might look at the broad HAR statistics and assume that we are still in a seller’s market. Without the knowledge of an agent who can really guide the buyer about what is happening in a specific area, the buyer might make incorrect assumptions.”
Abney said that it is equally important for sellers to understand what the market conditions are in their specific area, especially if they are relocating and need to sell their home within a relatively short period of time.
“A seller might think that they are in a seller’s market, which might not be the case for their particular market area or neighborhood. So, a relocation seller needs to work with an agent who really knows the market, and will be honest about what it’s going to take to get the house sold,” Abney said.
She also pointed out that while there might be a surplus of inventory in a particular area, that it doesn’t necessarily follow that a home listed for sale in that area will take longer to sell.
“If a home comes on the market, and it’s priced well and in good condition, it could still bring multiple offers. Even if there’s a huge surplus of inventory in the area, a property could come on the market and be gone in a week. So, buyers and sellers shouldn’t make assumptions based on broad market trends, because we never know how real estate markets are going to fluctuate,” Abney said.
Fortunately for buyers and sellers, Houston’s housing market has remained very strong, even in light of the recent downturn brought on by lower oil prices. That downturn could have crippled the local market, but that was not the case.
Ted C. Jones, PhD, chief economist for Stewart Title Guaranty Co., referred to this as “the best oil downturn that Houston, Texas has ever seen.”
“At the end of April, the Houston area had 3.04 million jobs, and the demand for housing is purely a function of job growth,” he said.
According to the Texas Workforce Commission, the Houston metropolitan area created 18,700 jobs in April, which marks one of the highest increases in the last 35 years.
“What we are looking at now, is a much better job growth this year than almost anybody had anticipated, albeit only a little bit better than half of our normal rate,” Jones said.
He added, “When you look at Brazoria, Fort Bend, Galveston, Harris, and Montgomery counties from January through May, sales of single-family homes were up 6.2 percent year-over-year from May of 2016. Last year was an all-time record, so we are on pace to top that this year.”
Jones said that the townhouse and condo market is also doing very well, with a current inventory of 4.2 months of available properties.
“The one segment that hasn’t shown an increase is the mid- to higher-priced condo sales,” Jones said. “Other than that, we are seeing a very strong Houston real estate market.”
In terms of available inventory, Jones agreed with Abney and said that it depends largely on location, price range, and the condition of a property.
“We are seeing some bidding wars right now, but that certainly isn’t systemic across the whole market. What we do have is an incredibly healthy housing market. It’s also a very competitive seller’s market,” Jones said.