Heights Area Real Estate Market-Then & Now
January 2014 Update: This is a 2009 post. I keep it around to show what the market used to be like…the good old days. Back then I showed Days on Market (DOM) to be 6-7 months. The 2014 DOM is currently about 30 days. Here is a more recent post on current conditions in Houston Heights.
October 2009 Market Conditions: Total chaos is the only way to describe Heights Area real estate market. Sales volume is down ~20%, but that alone doesn’t begin to describe it.
Is it a buyer’s market? That’s what headlines would have you believe. But no. Sales are down, but so is inventory. So, the months inventory is still rocking along at 6-7 months. Thus the market is about neutral..
Months inventory = total homes available in a specific market divided by sales/month. Example, 100 homes on market; Selling at 20/month = 5 months inventory.
6-7 months inventory is neutral. Below this is Seller’s Market. Above that is Buyer’s Market.
So, does this mean that the market is sluggish but predictable?
No again! It is screwy, mixed up, unpredictable, slow and frantic at the same time. The phones ring like mad one week. Sales are Good! Then they don’t ring at all the next week. Sales are bad!
Buyers flock to open houses; look at everything on the market; they make offers; then poof, they are gone! “I changed my mind“, “My astrologer said it wasn’t a good time to buy“, “My Mom in Detroit said if I don’t get a 30% reduction in price, I shouldn’t buy it“, “My investor Dad said to make multiple low-ball offers until someone takes it”.
I’ve heard all of these reasons for backing out of a contract in the last few months. Stressful? Chaotic? Yes. What does a Seller/Buyer do? Be better prepared. Be carefully guided.
What are the top 5 things a realtor does in this market?
- Carefully guide the clients through this minefield.
- Forewarn them of what pitfalls might lie ahead
- Provide good advice (as opposed from advice from well-meaning relatives, friends, Yankees) and tell the client what might happen.
- Be extremely careful in contracts. Be meticulous in details. Pay attention to critical deadlines and remind both parties of impending dates.
- Be extremely courteous in dealing with everyone involved in the process. Stressful situations can lead to people doing stupid things.
So, is this a good time to buy in Houston Inner Loop Market or Near Northside?
The people sitting on the fence right now, may not have this buying opportunity again. When this down-turn ends (This is where my crystal ball gets foggy) builders will be out buying land again, pushing prices up. When interest rates go up (I’m sorry but you can’t spend trillions of dollars, and borrow and print money without effect), affordability goes down.
There, I’m off my soapbox. Go forth: Buy, Sell, Be Happy.
If you are not sure where to buy, or even where all these nearby neighborhoods are, see My Interactive Map of Neighborhoods.