2017 was a good year, especially for the upper high end market. New construction prices are up and lots are selling about on par with 2016. The middle market has seen some softening, with the exception of “move-in ready” homes. For those not impacted by Hurricane Harvey and flooding it has been business as usual. Flooded homes and lots are hitting the market and are selling at discounts often below land value. Many residents in neighborhoods flooded due to the dam release are rebuilding. What a statement that makes for the resiliency of these lovely neighborhoods. A year or two from now they will be full of beautifully remodeled and new construction homes. It may be a tough year or two ahead but I believe down the road these neighborhoods will shine even brighter after rebuilding.
The Memorial Villages 2016 Market Review shows a correction, as anticipated. Average price of Resales is down 12%, Average price of New Construction is down 21% and lot prices are down approximately 3% over the past year. You can compare the numbers in the chart below to my post about a year ago for 2015. The good news is that consumer sentiment is more positive….buyers are out looking, the election is past, and interest rates are likely to rise so buyers who have been on the fence have a new sense of urgency to make the move they have been deliberating this year.
Fortunately most of our markets were not overbuilt with too many speculative new homes. For the most part we are seeing normal balanced markets today with a few submarkets of oversupply. Without question there are fewer buyers in the market than a year ago but fortunately we currently don’t have an oversupply in inventory. In many submarkets prices are down a little (often to 2014 levels) but some pockets have remained surprisingly resiliant where there is low inventory.
I pulled a historical look at Memorial (MLS area 23) through the last recession. We saw individual values in Memorial fall up to 20-30% during those years even as the total averages dropped less dramatically. Of note is that it took 4 years for prices to recover previous highs and the last few years have been extradordinary. Also interesting to note is the number of homes closed in 2015 was about the same as 2009. Volume is down, we are fortunate that inventory has remained low.
Most of the submarkets in Houston are in “balanced” or “normal” inventory conditions…that means neither the seller or buyer has an advantage. Real estate is local, and will differ among submarkets and price points. Currently there are only a few submarkets that are “buyer’s markets”. Click here for a detailed snapshot of the markets Greenwood King tracks, or call me!
The Memorial Villages ended the year with steady sales prices, higher inventory (noteably new construction), and strong lot prices. The table above is as of December 11th. There were several year end closings of lot sales at similar prices of the yearly averages. The decline in oil price has not affected lot sales yet.
Normally we don’t see multiple offers in the multimillion dollar price range. This GK listing was the exception. Beautifully decorated by Don Connally of Area (Highland Village) it showed great. My favorite idea was the use of this barn door that adjoins the pool. Open the door and you have additional entertaining area ….ping pong table…or whatever in this one bay garage space. Interesting observation…the home only had a one car garage yet that didn’t keep the buyers from bidding. Just because your home doesn’t have “everything perfect” doesn’t mean it won’t sell. Click on the top photo above for more details.
Yes, home values have escalated greatly this year. I often hear, how long can it continue? Is this a bubble? This bar graph tells us that the upper end market is not currently overbuilt. And based on the scarcity of lots this year, probably won’t be overbuilt in the near term. An important component of our market is the upper end, even if it isn’t your market. The above bar graph shows supply and demand for single family homes in Memorial ranging in price from $2,500,000 to $4,000,000 as of August 31, 2014. The red bars are steady supply….pretty level. The blue bars are homes going under contract, and the green bars are homes that have sold….which appear to be at good healthy levels.
This year has seen exceptional activity and price increases in our area. The Memorial Villages includes Bunker Hill, Hedwig, Hunters Creek and Piney Point. A quick glance at a similar table about this time last year (my 10/30/2012 post) shows half acre lots increased 12%. Even if you aren’t in the market for a lot, you should be aware of what is happening there as lot prices and availability affect resale and new construction prices too. I am hopeful 2014 will be another strong year!
July was Greenwood King’s best month ever and our market is still a strong Seller’s Market. Despite a slight uptick in interest rates, and very little inventory, buyers are still looking and sellers are enjoying record prices. The June 30, 2013 numbers are really quite staggering. Here are some highlights:
* Inventory in Memorial is 60% LESS than last year….that means buyers have 60% fewer homes to look at.
* New construction is 24% of all sales in Spring Valley….why? more affordable lots
* Prices are up 6% over last year in the major markets GK serves
* Many of our markets have less than 2 months of inventory supply…..6 to 9 months is considered a balanced market
I predict a strong fall selling season….there is still time to put your home on the market this year. Click here for the link for the Greenwood King Market Report.
Here is a lovely fixer upper that has extra large rooms and lots of potential:
Click here for more details
This red, blue and green bar graph tells the story. In the $2,000,000 to $3,000,000 single family price range in Tanglewood the red bars are homes available for sale…..inventory has dropped significantly. The shorter blue and green bars at the bottom represent homes sold and under contract in each month in this same price range….there was quite a number of homes that went under contract and sold at the end of the year.
This is a general overview of the market. Please call me for a detailed analysis if you are thinking of buying or selling.