HOUSTON

• First up, I was very wrong on my predictions on this. Despite inventory remaining very low (2.6 months vs 2.7 months in January), prices have dropped YOY for the first time in Houston in more than two years. Looking at the data, a price drop coupled with very low inventory has almost never happened. I believe that rising interest rates have hit the market very hard, causing this (see video linked below). I do not see interest rates decreasing any time soon, and given that, I think prices will continue to fall in Houston for the foreseeable future. Further, given the velocity of the change in pricing, this could get very ugly very quickly. And the reverse holds true if the Fed is forced to pivot on its rate policy measures. But I was wrong before, and could be wrong again.
• I do think it is a valid point to compare against pre-covid numbers, but it should be done very gently. A full on comparison is not valid. It's excuse making. 2023 is not 2019.
• I don't think the inventory numbers shift much in the near future given where 99% of folks interest rates are. That is, until we start seeing major job losses. Will we? My guess is that we will know by this summer.
• Jerome Powell is testifying again today. His comments yesterday shifted the interest rate futures up significantly. Next meeting is in 14 days. https://www.cmegroup.com/markets/interest-rates/cme-fedwatch-tool.html?redirect=/trading/interest-rates/countdown-to-fomc.html
• It's rodeo season in Houston. Given that, I believe it is fitting to say, "Buckle up boys and girls. This is gunna be a wild ride."

I'm quoting a lot of this because I think there is a lot of stuff going on right now.

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As the Houston housing market continues to transition to pre-pandemic conditions, positive indicators are beginning to blossom. While February sales were down year-over-year, they were up compared to the last pre-pandemic February, in 2019. In addition, year-over-year pricing fell for the first time in more than two years and more homes were listed for sale. These are among the signs that would-be homebuyers have anticipated after moving to the sidelines last year when mortgage interest rates began to rise.

According to the Houston Association of Realtors' (HAR) February 2023 Market Update, single-family home sales fell 23.0 percent, with 5,723 units sold compared to 7,430 in February 2022. That marks the 11th consecutive monthly decline. However, when compared to the last February before the pandemic February of 2019, with sales volume of 5,339 units sales were up 7.2 percent.

All housing segments saw year-over-year declines in February. By contrast, both single-family and townhome/condominium rentals had solid gains, with buyers pivoting to the rental market until mortgage rates ease and inflation subsides. HAR will issue its latest report on rental trends in the February 2023 Rental Home Update, to be released next Wednesday, March 15.

"For a true apples-to-apples comparison of the Houston housing market, you have to examine where we were before the pandemic, in 2019, and by that standard, we are in similar territory," said HAR Chair Cathy Treviño with Side, Inc. "The traditional year-over-year comparison shows a market slowdown, but even then, there are positive trends in the form of moderating prices and growing inventory that bode well for spring homebuying."

Single family home prices fell for the first time since the spring of 2020. The average price dropped 2.4 percent to $385,103 and the median price declined 1.6 percent to $320,000. That is in sharp contrast to when prices reached record highs of $438,294 (average) in May 2022 and $353,995 (median) in June 2022.

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https://www.har.com/content/department/newsroom?pid=1923

https://www.harconnect.com/wp-content/uploads/2023/03/har_weeklystats-23-9.pdf

NORTH TEXAS

• YoY price decreases are starting to appear in certain areas of the Metroplex, with other counties seeing a continued downward trend on price appreciation growth
• Inventory is still relatively tight, however, Buyers are feeling the pressure on affordability due to the continued rise in interest rates.
• Showing activity remains robust and Buyers are still out there, however, Sellers are struggling to maintain pricing. Pricing the home right is key in order to increase odds of a multiple offer situation, which, even in this economical environment, is not unlikely due to the low inventory.
• Buyers are focusing more on closing costs, asking Seller's to pay for title or focusing more on inspection findings and repair costs.

San Antonio Data:

• 17% Decrease in Sales as expected during a notoriously slow month
• 2% Increase in Sales Price (YOY). which is being inflated by new build data
"In February, we saw a 28% decline in existing home sales but also a 28% spike in new construction homes," said Sara Briseño Gerrish, SABOR's 2023 Chair of the Board.

• 70 DOM, up from 66 in January. I expect this number to decrease as we move into the busy season.

New Braunfels:


Spring Branch:


Gonzales:


Texas Data:



If you need a different market area, please ask!

https://sabor.com/Market-Research-and-Statistics/Market-Statistics/San-Antonio-Area-Market-Report

February Housing Data

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AUSTIN, Texas In February, home buyers continued to gain leverage across the Austin-Round Rock MSA as housing inventory increased to 2.6 months according to the Austin Board of REALTORS latest Central Texas Housing Report. This increase in supply fuels growing confidence in the market from REALTORS and home builders across Central Texas.

"Austin's housing market is trending in the right direction. Buyers have more options and negotiating power with each passing month, and sellers have more time to make their next move," Ashley Jackson, 2023 ABoR president, said. "Remember, a healthy housing market isn't defined by breaking records every month, but by market activity that's steady-paced and sustainable."

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• Wow! Three straight months of declining median sales prices! This month's drop is 12% from the previous year.
• Active listings are up 500% from last year yet new listings are down less than 1% from the previous year.
• Just as the ABOR president mentioned, buyers are starting to get some of that negotiating power back.
• I currently have one house in escrow where my seller offered $5000 in concessions. That house should be closing next week. I also have another client who is on the receiving end of $6000 in concessions and that house should close in April.

Austin-Round Rock


Bastrop County


Caldwell County


City of Austin


Hays County


Travis County


Williamson County

How soon if at all will land pricing fall in North, North west of Houston. Montgomery County, Waller County, Grimes County, Chapel Hill areas?

Finding land to build has been a pain in the ass. If you are looking for 1~3 acres, the price per acre is around 60k, which is ridiculous compared to 3~5 years ago. Some of these properties have been on the market 200+ days and haven't budged

Diggity said:

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Red Pear Realty said:

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HOUSTON

• First up, I was very wrong on my predictions on this. Despite inventory remaining very low (2.6 months vs 2.7 months in January), prices have dropped YOY for the first time in Houston in more than two years. Looking at the data, a price drop coupled with very low inventory has almost never happened. I believe that rising interest rates have hit the market very hard, causing this (see video linked below). I do not see interest rates decreasing any time soon, and given that, I think prices will continue to fall in Houston for the foreseeable future. Further, given the velocity of the change in pricing, this could get very ugly very quickly. And the reverse holds true if the Fed is forced to pivot on its rate policy measures. But I was wrong before, and could be wrong again.
• I do think it is a valid point to compare against pre-covid numbers, but it should be done very gently. A full on comparison is not valid. It's excuse making. 2023 is not 2019.
• I don't think the inventory numbers shift much in the near future given where 99% of folks interest rates are. That is, until we start seeing major job losses. Will we? My guess is that we will know by this summer.
• Jerome Powell is testifying again today. His comments yesterday shifted the interest rate futures up significantly. Next meeting is in 14 days. https://www.cmegroup.com/markets/interest-rates/cme-fedwatch-tool.html?redirect=/trading/interest-rates/countdown-to-fomc.html
• It's rodeo season in Houston. Given that, I believe it is fitting to say, "Buckle up boys and girls. This is gunna be a wild ride."

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I will admit that I chuckled to myself as soon as that headline hit my inbox. Talk about moving the goalposts.

I get that HAR has to paint a rosy picture no matter the market, but they tend to go overboard sometimes.

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My financial advisor's position is that they're going to raise rates until housing prices go back to pre pandemic levels. We'll see

During the Great Financial Crisis, the Case-Shiller Index peaked in July of 2006 at 184.607. By December 2006, it had fallen to 183.23, or a total of 0.75%. Fast forward to the trough in February 2012, and prices had fallen a total of 27.4%.

Fast forward to the next peak in June 2022, and the index hit 308.356. The last data from December 2022 had fallen 4.44% to 294.679.

So in similar 6-month time horizons, we now have prices falling at a rate almost six times faster than the great financial crisis.

https://fred.stlouisfed.org/series/CSUSHPINSA

AgsMyDude said:

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QBCade said:

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Diggity said:

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Red Pear Realty said:

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HOUSTON

• First up, I was very wrong on my predictions on this. Despite inventory remaining very low (2.6 months vs 2.7 months in January), prices have dropped YOY for the first time in Houston in more than two years. Looking at the data, a price drop coupled with very low inventory has almost never happened. I believe that rising interest rates have hit the market very hard, causing this (see video linked below). I do not see interest rates decreasing any time soon, and given that, I think prices will continue to fall in Houston for the foreseeable future. Further, given the velocity of the change in pricing, this could get very ugly very quickly. And the reverse holds true if the Fed is forced to pivot on its rate policy measures. But I was wrong before, and could be wrong again.
• I do think it is a valid point to compare against pre-covid numbers, but it should be done very gently. A full on comparison is not valid. It's excuse making. 2023 is not 2019.
• I don't think the inventory numbers shift much in the near future given where 99% of folks interest rates are. That is, until we start seeing major job losses. Will we? My guess is that we will know by this summer.
• Jerome Powell is testifying again today. His comments yesterday shifted the interest rate futures up significantly. Next meeting is in 14 days. https://www.cmegroup.com/markets/interest-rates/cme-fedwatch-tool.html?redirect=/trading/interest-rates/countdown-to-fomc.html
• It's rodeo season in Houston. Given that, I believe it is fitting to say, "Buckle up boys and girls. This is gunna be a wild ride."

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I will admit that I chuckled to myself as soon as that headline hit my inbox. Talk about moving the goalposts.

I get that HAR has to paint a rosy picture no matter the market, but they tend to go overboard sometimes.

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My financial advisor's position is that they're going to raise rates until housing prices go back to pre pandemic levels. We'll see

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I could see them targeting what 2023 would be given normal appreciation levels from the pre pandemic prices. But going back to late 2019 or early 2020 prices would cause a world of hurt.

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Correct, would be a massive impact to a huge portion of the country. I don't agree that they'll take it that far, but I could still see a 15-20% retreat in pricing.

BCS Stats are up!

Would be nice if I saw some of this slowdown in the area of Houston we're looking......

Metroplex stats are up!

Austin stats are up!

It's getting spicy

Do you happen to have any of this data/graphics for the gulf coast?

Are you talking about other states? Or Texas cities/counties along the coast?

Yeah, sorry. Texas coast. Specifically, Rockport/Corpus Christi area. Aransas and Nueces County

We will have these for you by Monday.

I'm about to have a 140k price point 2/2 somewhere in Houston. What's the demand like in that price range/ size?

Really depends on where it is. But from what I've seen, the under $300k and over $1M markets in Houston have done just fine.

rmp15 said:

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Yeah, sorry. Texas coast. Specifically, Rockport/Corpus Christi area. Aransas and Nueces County

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Here you go!

Awesome! Thanks so much!

Temple/Belton/Killeen

February Housing Report

I'm also going to starting helping clients in the Temple/Belton/Killeen area as well. I'm currently helping a client that has a house in escrow in Temple at the moment. We were able to negotiate $25K off the price!

• Belton and Killeen saw increases in median sales price, while Temple saw a small decrease of almost 1%.
• Temple had the highest increase in active listings with 612% YOY.
• All three cities would be considered seller's markets at the moment, but from my example above, there are many incentives for buyer clients at the moment to get the best deal.

Temple


Belton


Killeen

Red Pear Realty said:

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This analysis is thorough and seems pretty accurate.

SA Data is up!

WSJ: Home Prices Fell in February for First Time in 11 Years

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Sales of previously owned homes, which make up most of the housing market, rose 14.5% in February from the prior month, but were down 22.6% from a year earlier, the National Association of Realtors said Tuesday. Sales had decreased for 12 consecutive months through January.

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The national median existing-home sale price fell 0.2% in February from a year earlier to $363,000, the first year-over-year decline since February 2012. Median prices, which aren't seasonally adjusted, were down 12.3% from a record high in June.

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The latest data reflect a period before a pair of bank failures roiled financial markets. Homes typically go under contract a month or two before the contract closes, so the February sales data largely reflect purchase decisions made in January and December.

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In the short term, any decline in mortgage rates is likely to spur more home-buying activity, said Orphe Divounguy, a senior economist at digital real-estate company Zillow Group Inc.

But if unrest in the banking sector makes consumers more anxious about the economy entering a recession, that could weigh on demand, he said. Banks could also tighten lending standards, making it harder for home buyers to obtain mortgages, said Capital Economics in a note to clients.

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My anecdotal observation from Collin County is that activity is way up around me in the last month. Quite a few homes hitting the market and going under contract pretty quickly.

List prices are a little scattered, but mostly in line with where they have been the last 6 months or so. I will be interested to see the next few months of data.

I certainly believe that nationally things are trending down, but hoping I am in an area that is more well insulated from the shock.

This is definitely the case where we're looking in Houston. In the last two weeks we've put offers on two houses, over asking, within a week, in different neighborhoods and didn't get either.