Okay, I have to admit that I am a bit confused on where the market is headed. Everything should point to a healthy one.Oil is in the $70’s, consumer confidence is way up, employment is rising, Summer should bring increased buying activity and rising interest rates normally is a short-term stimulus. Thus, all indicators point to what should be an invigorated market for home sales. Yet, the results simply aren’t there.In fact, the market is actually trending downward…albeit slightly.
Market Results for or all of Zip Code 77441:
Trending beneath the surface for the last three months has been an “undertow” pulling the market down. There have been positive results, but they were on the margins. Rising inventory has been a problem, and June enhances that concern with a significant increase. Coupled with this was yet another decrease in the number of Listings in Pending Status. Taken together, that is not a foreteller of good things to happen. The only good news, and it was good news, is that Solds were up.
As insight, Karen Davis and I work as a team and we Closed 11-homes in June. This represents 20% of the total for all of zip code 77441. We should be pleased. However, it is not the number we Sold, rather it is the ones we haven’t. That is troubling and tugs at your heartstrings because our Clients are depending on us to sell their home…not someone elses. The problem is that there is simply too much supply and not enough Buyers.
Total Active Listings: June: 293 May: 274 Change: +19 % Change: 6.9%
Listings in Pending Status: June:91 May:109 Change: -18 % Change: -16.5%
Homes that Sold & Closed: June:59 May: 51 Change +8 % Change: +15.7%
Below are the June results by Community.
Weston Lakes:
“Rising” is the apt description for June. The last few months has been witness to the rising inventory of Active homes. That trend continued and the number now rests at (60). As perspective, that is almost double what it was starting the year. However, there were some rewarding results in June.Although, the number of Listings in Pending Status dropped from (15) in May to (12) in June, that is still a healthy number. There were also (12) that Sold. The best news is that the average Sales Price has risen to an impressive $512,650 with an average Price Per Square Foot of $143.
Fulbrook:
Over the last 2-years, Fulbrook has been the “shining star” of acreage communities. Ironically, now I’m concerned how Fulbrook will perform in better times. Active inventory has risen slightly to a total of (8). No worries here. There are currently (4) homes in Pending Status and (3) that Closed in June. That is rewarding too. That said, the concern is that the Actives are comprised mostly of Listings over $1 million, while those in Pending are in a lower price range. Is this an indication of the market, or just an aberration? We will soon find out to see how much demand there is for the higher-end homes. As insight, in all of zip codes 77441 and 77406 there has only been (1) Listing that Sold in the last 6-months that was over $1 million and located on 1 to 5 Acres. Yet, there are 16-Active Listings aging on the market.
Fulbrook On Fulshear Creek:
This is the toughest community I know of for Sellers. A great place for Buyers though! So, any good news is always rewarding to share.In June, the Active inventory remained the same at (25).Good news, yet that is still a high number. There are (4) homes in Pending Status, and one Listing was ours. It went under contract in just (15) days and is one of the highest priced ever. That is a good sign! Unfortunately, there was only (1) home that Sold. However, it was a Resale and Sold in just (2) days and at full price. It did so at $111 per square foot though.The results show if you have a very nice home priced right, there are Buyers for it. Maybe not though, for Listings that aren’t…
Cross Creek Ranch:
The last two months were witness to positive results with the Active inventory declining. It reversed course in June and rose by 10% to a total of (124). Worse?The number of Listings in Pending Status dropped to just (46), down 12%. However, the number that Sold increased significantly to (35). Yet, at this sales rate, it would indicate nearly a 5-month supply.In short, Active inventory is rising and the number of homes going under contract is declining. So, call your friends and family and tell them now is a great time to buy in Cross Creek Ranch!
Fulshear Run:
The results continue to be positive. The number of Active homes on the market has remained stable. In June, it increased by just (1) to a total of (5), which is still reasonable.There is (1) home in Pending and the (1) that Sold did so at an impressive $186 per square foot. That is setting a firm foundation for future sales. Again, for a new community, in the upper price range, the results were rewarding.
Summary:As indicated in the opening, the market is not as healthy as it should be and I lack an adequate explanation as to why. However, I would like to share some advice and recommendations for Sellers and Buyers alike.
For Sellers,as you move towards a Buyer’s market (over supply), the Buyers tend to “cherry pick” and only purchase the very best homes. Why buy a home that doesn’t meet everything you want, when there are plenty of others from which to choose? Buyers normally would prefer new. As such, they are in no mood for “fixer uppers”, homes with “interesting” floor plans, that are outdated or those that simply don’t show well. In short, Buyers become very demanding and insatiable. Little issues become “deal breakers”. So, Sellers need to be cognizant of who their Buyer isand what they have to do to meet their demands.Else, the Buyer simply purchases a home that does.In a Seller’s market, it is the reverse. Homes “fly off the shelves” with multiple offers, and Buyers are lucky to be able to buy anything. All defects are forgiven.
For Buyers,it is the overused metaphor of “buy low and sell high”. Obviously, the best time to buy is in a tough market where sales are slow and prices low.It is a time with much greater selection and when you can get a “deal”.Yet, Buyers follow the herd and don’t. Instead, they tend to do the exact opposite and purchase when the market is “hot”, because that is when everyone else is buying.So, with plenty of inventory and lots of good deals on the market, now is a good time to be just that…a Buyer. In addition, interest rates are beginning to rise. That means the effective price of the home you are Buying is going to cost you a lot more. As an example; if you are purchasing a $500,000 home with 20% down at 4% interest, and rates rise to 5%, it increases the effective price of the home by $33,000.So, there is not a better time to be a Buyer than today.