OK. I’m going to say it. SELLER’S MARKET!! A market is usually considered a “seller’s” market when inventory supply is six months or less. The current Houston inventory has been below six months supply since last December.
After three long years of sluggish sales, the buyers out there in Houston, and many other markets across the country, seem to have finally figured it out – prices aren’t likely to going to go any lower and interest rates are still bargains.
What is the result? My main market is the inner-loop, so I can’t say for sure about the rest of the city, but the inner-loop market is on fire. I’m even seeing prices in my own neighborhood (East Montrose) that are getting back to where they were before the “crash”. I’m also seeing multiple offers, offers sight unseen, and homes going sale pending in just days in the Heights. Other areas that I do a lot of business in (Southampton for example) are also seeing fairly quick sales. The one caveat to this is that overpriced homes are sitting longer.
There are still a lot of “what-ifs” happening that might change all of this, such as the turmoil in Europe and it’s possible effect on the world economy, but we will just have to wait and see.
The recent poor job creation numbers were also very disappointing, but one month’s data does necessarily mean a trend.
The upcoming election season, well, that’s another whole blog entry in itself!
The biggest issue that I still see is that it is harder to get a mortgage for potential buyers without great credit. The pendulum really swung from one extreme (easy money and little paperwork!!) to the other (no money and we want your firstborn to get approved for what we have!), but I also see that this issue has a way to go before resolving itself. The “tightness” of money goes a long way to explain why only one market – home sales under $100,000 – have fallen by 9.7%. Just about anyone with decent credit, a good job (duh!), and a little bit to put down can get a FHA mortgage, and conventional mortgages can still be obtained with relatively modest down payments. The rumors that buyers need at least 20-30% down are simply not true.
I’m guessing that the stock market is too volatile, CD’s and savings accounts aren’t paying diddly-squat for interest, and mortgage interest rates are at historical lows, so real estate seems to be the current best bet. Rents are also rising as well (especially in more sought after areas). There also seems to be a lot of all cash buyers out there as well.
So what does all of this mean? My hope is that the real estate market, or as I like to call it “the real estate roller-coaster”, has finally hit the bottom and has nowhere to go but up, so hold your hands up and the air and go for the ride! Weeeeeeeeeeeee!!!
Want some more stats? Then check out the latest newsroom report from the Houston Association of Realtors at this link.
Feel free to call or email me for all of your real estate needs!