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September Housing Data Across Texas

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Red Pear Realty
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11:27a, 10/16/23
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HOUSTON


The FACTS

  • Sales volume is down almost 10% year over year (YOY, down for the 18th straight month), while active listings are up almost 14% YOY. This is huge.
  • Mean and Median pricing is up 0.8% and down 2.2% YOY.
  • Months Inventory is continuing to climb from 3.3 months last month to 3.5 months currently. This should continue to climb into December, then drop, and then climb again into April.
  • Interest rates at par for many owner occupants ticked above 8% this past month. EIGHT
  • The 10 year US Treasury yield is hovering around 4.70% this week.



[url=https://www.har.com/content/department/newsroom]https://www.har.com/content/department/mls?y=2023&m=10[/url]

My Take

  • This last month has been slow for new business but it's hard to tell if that is all seasonal, or super interest rate sensitivity. We will not really get a hint until December, and then know for sure until April or so.
  • I've closed a few deals on the sale and buy side since my last monthly post, but those were signed when interest rates were in the low 6% range, as crazy as that sounds today.
  • One deal was in Cypress and listed at what I thought was very fair pricing. It went under contract immediately and was smooth for everyone!
  • Another deal, just south of Cypress, got a TON of showings, but only one offer that first weekend. It was a good deal for the buyer, and they got it because they acted quickly. The lesson is that in any interest rate environment, you can still identify and buy good deals.
  • Myself and a few other family members closed on the purchase of my family land and homes in Apple Springs this last week (from my grandparent's, who passed this summer, estate). I'm proud to continue our family ownership. Here are two pics of a pretty cool old barn with hand cut logs that my great grandfather moved onto the land around a hundred years ago or so. The logs are for sure older than that, and they lived in it while they built their first home while they farmed. We just had a new metal roof put on it to help preserve it, and I'd be happy to pass along the contractor's name if you need some work done in East Texas. He is a combat injured Marine veteran friend of mine from high school. Good, honest dude. Buy dirt.



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Red Pear Luke
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6:57p, 10/16/23
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Bryan / College Station Area Statistics:

  • Bryan/College Station continues to see homes sit on the market longer - avg length is now 89 days vs 82 days in August
  • The number of sales Month over Month has dropped by 1/3 from 306 in August to 203 in September, reasoning is likely attributable to August sales had rates locked when we were 1.50% lower in the early to mid summer.
  • The data says inventory levels in the area have increased from 2.4 months of supply in September 2022 vs 3.5 in September 2023. The rise is not because more people are choosing to sell, but rather homes are taking longer to close.


My Take and Transactions:

  • Sellers are struggling reduce prices to meet buyer expectations on prices. Home buyers are really beginning to dwindle in numbers as interest rates price people out. The few buyers remaining in the market are continuing to negotiate prices that meet their budgets.
  • Both sides of the transaction need to recognize and respect that each counter party have bottom lines on what they will accept.
  • One of my deals representing a home buyer recently fell through during the option period. Both sides ended up going their respective ways but the seller's agent was convinced they would have other offers waiting for them shortly after relisting. The house has continued to sit and a bird in the hand is better then two in the bush.

Bryan/College Station:





Bryan:



College Station:



If anyone needs a surrounding city/area or has additional questions, let me know!

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Red Pear Jack
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10:03p, 10/16/23
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NORTH TEXAS

Data is all over the map this month.

Rockwall county with a double digit price decline after holding onto price increases throughout the majority of the rate hike cycle.

Interestingly, active listings in much of the counties are dropping compared to last year with the exception of Parker County and the two CBDs. Are sellers just giving up and not willing to drop the price? I think that even dropping price won't help (unless its a drastic drop) as buyers have gone into hibernation as a result of the rates.

A buyer that budgeted $3,500 for home costs could afford a $700k home at a 3% rate, today, they can afford a $475k home. That's a big lifestyle difference.

Months of inventory is still relatively unchanged and remaining low.

Showings per listing continues to drop and evidence of the reduced buyer pool. I would think you would see showing per listing drop if inventory rises but as said previously months of inventory remains low and virtually unchanged.





















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Red Pear Realty
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In reply to Red Pear Jack • 7:40a, 10/17/23
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That showings per active listing chart is awesome. Did you create that yourself?
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Red Pear Jack
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In reply to Red Pear Realty • 7:53a, 10/17/23
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I did, the MLS has a trends app and you can toggle different metrics on there to graph.

I wish they had a withdrawn/cancelled/expired option. It would be interesting to see the trend there.
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TxAG#2011
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8:28a, 10/17/23
Sellers haven't faced the music yet. The market can't afford these already high home prices and now even moreso with these rates slapped on top. Refinancing at a lower rate in a few years is much less appealing when your value has dropped 20%.
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Eliminatus
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In reply to TxAG#2011 • 10:10a, 10/17/23
AG
TxAG#2011 said:
Sellers haven't faced the music yet. The market can't afford these already high home prices and now even moreso with these rates slapped on top. Refinancing at a lower rate in a few years is much less appealing when your value has dropped 20%.


Agreed. I've been holding on and hoping to see if the market prices would adjust quickly to the rates but just not seeing it in my area. Sellers are pretty stalwart though and with the lack of selection, inflated home prices are still rewarded here with buyers needing something. generally speaking. I think I have resigned myself to another year of renting. Frustrating situation for me.
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Heineken-Ashi
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12:41p, 10/17/23
There won't be sellers until layoffs pick up.
"H-A: In return for the flattery, can you reduce the size of your signature? It's the only part of your posts that don't add value. In its' place, just put "I'm an investing savant, and make no apologies for it", as oldarmy1 would do."
- I Bleed Maroon (distracted easily by signatures)
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Ferris Wheel Allstar
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In reply to TxAG#2011 • 4:48p, 10/17/23
AG
TxAG#2011 said:
Sellers haven't faced the music yet. The market can't afford these already high home prices and now even moreso with these rates slapped on top. Refinancing at a lower rate in a few years is much less appealing when your value has dropped 20%.
I am somewhat in the market for a house in Houston and have noticed prices are dropping from my saved HAR searches.
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jja79
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5:02p, 10/17/23
AG
I am no expert but I was talking to an existing mortgage client earlier today. Their plan had been to move early 2024 and we discussed the fact that many potential sellers will choose not to sell and move to protect their mortgage rate. While I think we may see some drops I also think this rate protection strategy some/many may employ will keep inventory down and maybe soften the blow. But as I said I'm no expert.
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Red Pear Luke
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7:45a, 10/19/23
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BCS Stats are up!
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Red Pear Realty
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8:21a, 10/19/23
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Red Pear Realty
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8:27a, 10/19/23
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MAS444
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In reply to Red Pear Realty • 8:59a, 10/19/23
AG
"highest rate of foreclosures" compared to what? I understand foreclosures are way up...but not sure I understand the context.
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Red Pear Realty
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In reply to MAS444 • 9:11a, 10/19/23
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It's overall rate of foreclosure compared to other MSAs:

https://www.attomdata.com/news/market-trends/foreclosures/attom-q3-and-september-2023-u-s-foreclosure-market-report/

Quote:
Among 223 metropolitan statistical areas analyzed in the report, those with the highest foreclosure rates in Q3 2023 were Houston, Texas (one in every 371 housing units with a foreclosure filing); Atlantic City, New Jersey (one in every 453); Cleveland, Ohio (one in every 459); Bakersfield, California (one in every 465); and Columbia, South Carolina (one in every 503).
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MAS444
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In reply to Red Pear Realty • 9:16a, 10/19/23
AG
Damn - that's what I assumed it meant but hoped not. Very surprising to me. Any thoughts on why?
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jja79
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9:19a, 10/19/23
AG
Probably not good to have a higher foreclosure rate than Atlantic City and Cleveland. 10 year Treasury has gone through and sustained 4.9% and climbing so expect higher mortgage rates.
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Sea Speed
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In reply to MAS444 • 9:23a, 10/19/23
AG
MAS444 said:
Damn - that's what I assumed it meant but wasn't sure. That's surprising. Any thoughts on why?


That is VERY surprising to me.
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htxag09
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9:42a, 10/19/23
AG
Wonder what, if any, impact property taxes have on that statistic?
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txaggie_08
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10:36a, 10/19/23
AG
Cracks in the market starting to get wider and wider? Seems there could be a significant break over the next few months. Q1 '24 could be interesting across the entire economy.
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Red Pear Realty
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In reply to txaggie_08 • 12:37p, 10/19/23
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This is my take. I'd like to know exactly where those foreclosures are because the Houston market is so different from submarket to submarket, but the psychological impact can't be ignored on the overall market. I'm still pf the opinion that the top tier submarkets won't see much value impact or could still even go up while the tier 3 stuff gets hit 30-40%.

Next 12 months are going to be interesting.
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Red Pear Jack
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1:23p, 10/19/23
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Isn't the rate of foreclosures still significantly low?
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jamesaaron0187
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In reply to TxAG#2011 • 2:12p, 10/19/23
TxAG#2011 said:
Sellers haven't faced the music yet. The market can't afford these already high home prices and now even moreso with these rates slapped on top. Refinancing at a lower rate in a few years is much less appealing when your value has dropped 20%.

Genuinely trying to learn here ... but why would home values drop 20%?

And once mortgage rates drop, won't the increase in buyers getting back into the market drive home values up?
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Diggity
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2:16p, 10/19/23
AG
maybe Lina wasn't allowing any foreclosure auctions while she was getting the help she needed?
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Red Pear Felipe
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3:18p, 10/19/23
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Austin-Round Rock Housing Data

Austin-Round Rock MSA housing market inventory hits highest level in over eight years

Quote:
"It's imperative for Central Texans to have a game plan and strategize with their REALTOR when navigating the housing market," Ashley Jackson, 2023 ABoR president, said. "It's also important to understand that the housing market today is no longer the housing market of the past few years. The benefit of this for buyers is they can take advantage of this extra time to get pre-qualified, while sellers can improve their home's curb appeal. These intentional preparations will result in better experiences and outcomes on both sides of the transaction."

"Sellers who cling to the housing market of the past few years are doing themselves a disservice, as the housing market and mortgage rates are ever evolving. REALTORS know how to expertly navigate these dynamic factors and price homes for the current state of the market."



  • Sales have dropped 18.2% YOY to 2,387 sales!
  • Median sales priced dropped in the single digits when it has had double digit decreases throughout the year. There was a drop of 4.3% in median sales price YOY. I'd still like to see this number dip a bit more to help those first time home buyers facing higher interest rates.
  • Things have been SLOW in my area. I'm still getting some leads via Zillow but this is expected as we are coming into the fall.
  • My Liberty Hill listing is still on the market for $699,999.
  • As the market starts to slow, we are seeing large amounts of inventory in Austin. As a realtor, we can get creative by increasing the buyer's agent commission or adding seller credits to get the house sold. This isn't the housing market of a few years ago where FSBOs were receiving offers as soon as the sign was planted.

Austin-RR


Bastrop County


Caldwell County


City of Austin


Hays County


Travis County


Williamson County

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Red Pear Felipe
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3:29p, 10/19/23
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Austin Rental Data

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bullard21k
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In reply to Red Pear Realty • 10:46p, 10/22/23
AG
Red Pear Realty said:
This is my take. I'd like to know exactly where those foreclosures are because the Houston market is so different from submarket to submarket, but the psychological impact can't be ignored on the overall market. I'm still pf the opinion that the top tier submarkets won't see much value impact or could still even go up while the tier 3 stuff gets hit 30-40%.

Next 12 months are going to be interesting.

If someone was looking in the spring branch area for instance are you saying you feel like there are going to be some good opportunities to buy some good deals (especially if they have cash) or it's going to be more of a sellers market?
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Diggity
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In reply to bullard21k • 10:57p, 10/22/23
AG
SB would be one of the "top tier" markets, unless you're talking about the fringe areas north of LP. I could see those dropping off at some point because of the mediocre schools.

Anywhere in SB zoned to good schools is a sellers market.
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Red Pear Realty
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In reply to bullard21k • 10:35p, 10/27/23
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I was elk hunting this last week or so and didn't have signal until we walked out of the mountains this afternoon (in a snowstorm), so apologies for my late reply.

I agree with Diggity. My theory, based on data from previous recessions, is that the "top tier" submarkets will be flat or even up. Basically, a sellers market. The mid tier submarkets will be flat to slightly (-10%?) negative. And the tertiary/speculative submarkets will see significant price declines.
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PDEMDHC
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In reply to TxAG#2011 • 6:58a, 10/28/23
AG
TxAG#2011 said:
Sellers haven't faced the music yet. The market can't afford these already high home prices and now even moreso with these rates slapped on top. Refinancing at a lower rate in a few years is much less appealing when your value has dropped 20%.


I'm watching this happen live in my neighborhood.

Identical house 3 blocks down went on market 3 months ago for $445k. They just updated it for $395k and still no takers. Along CTP in Fort Worth.

Watching it as I wouldn't mind selling at $450k if possible but will never happen. We would have made $150k in profit in 3 years after paying RE agents! We are moving to another part of the state for family health reasons and moving into a family home that's already paid off.

Thinking we will lease/air bnb it instead of trying to sell.
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