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Normalization of Housing Market

mortgage rates on rise

Over the past few years, the housing market, especially in Texas, has seen rapid growth – a “comeback” if you will, from the damage done in 2008. In fact, Houston recorded the highest ever real estate sales year in 2014. With that boom, bust, and boom again cycle we’ve come to expect the unexpected in home sales. Fortunately though, it seems that The Woodlands and north Houston areas are catching up to the rest of the US, statistically speaking, which will allow for a more predictable market.
It appears as though the north Houston housing market is beginning to “normalize” compared to the rest of the country. One telling statistic is “months of inventory” or “MOI.” Homes priced below $400,000 tend to be listed for anywhere between one to four months, while homes priced between $500,000 – $1 million average 6 months, and homes over $1 million are typically on the market for about 10 months. Realtors use these statistics to determine whether it is a seller’s market or a buyer’s market. Based on these numbers, lower priced homes are still considered to be a seller’s market, while homes at a half million and above are in a buyer’s market.
New construction homes are seeing a very small slow down, as inventory catches up to the high-demand. That said, Houston may come in second place this year to Dallas in terms of new home sales for the first time in several years.
Additionally, with the diversity of industry in the greater Houston area, we can look at more than just the oil and gas economy to help predict housing performance. The overall national economy will be more of a determining factor in the months to come. Since we live in such a diverse place, the overall home values tend to rise slowly and steadily, making north Houston an ideal place to work, live, and raise a family for the long term.