One benefit of the slowing housing market is a much-needed increase in housing inventory, local real estate professionals say. The number of active single-family home listings in the Houston metro area has rebounded after plummeting to a 90-day average of 7,020 homes in May 2022, a record low. The 90-day average number of actively listed single-family homes as of mid-May 2024 was 21,943, about 4,000 units below May 2019 levels.
“Inventories are really starting to build,” said Richard Garcia. RE/MAX Signature II agent. “From two and a half months of inventory in April 2023 a year ago, to nearly four months of inventory in April this year.
“But in conversations with sellers right now, it’s still hard for many of them to be willing to give up a 3 percent rate for a 7 percent rate.”
While local agents believe the market remains strong and currently fairly balanced, they say things have clearly cooled down over the past two years. One thing that hasn’t changed, however, is the number of out-of-town buyers looking for properties in the Houston area.
“I see a lot of people moving here from other Texas cities and out of state,” Garcia said. “A lot of my buyer leads now come from there.”
According to Shay Kotal, Exp Properties Texas Managing Broker and Chairman-Elect houston association of realtorsjob opportunities bring many relocation buyers to the Houston area.
“I see a lot of new people coming to the area to work in energy jobs and technology jobs,” Cotal said. “There’s a lot of construction going on in the energy sector right now, so a lot of people are on multi-year contracts and some are choosing to rent, which puts additional pressure on the rental market. Everyone else is buying.
While agents have no doubt the market has slowed, they say they are still seeing areas with high levels of activity.
“I spoke to an agent two weeks ago who had 25 offers at the open house. It feels like we’re back in 2020, but there are other areas where homes are on the market for 35 days. 40 days or even 50 days, that’s helping our inventory grow,” Cotal said.
Local real estate professionals say most of these market hotspots are located in suburban areas.
“We’re seeing a lot of homebuyers being drawn to suburban communities that are further away from the city center,” Cotal said. “That’s due to a couple of different factors – one is obviously affordability becomes less important the further you get from the city – but people also want more space.”
But despite activity in some of these suburbs, local agents say mortgage rates continue to constrain buyers.
“Some homes are pretty stagnant and we’re seeing an increase in days on market because interest rates are preventing some people from buying now,” Wimsey said.
The 90-day rolling average of median market days in the Houston metro area was 56 days in late May 2024, Altos data shows. summer.
While demand continues to be strong, buyer hesitancy, coupled with a strong new build market, has kept inventory levels in suburban markets healthy.
In the part of Montgomery County north of downtown Houston, 68% of home sales earlier this year were for new construction, Kotal said.
“Houston presents a great opportunity for builders because builders can use these infill parcels because we have a land bank here and we have a community land trust with the land bank,” Wimsey added. “The The city works with these builders to build inventory at certain price points, which helps keep [homes] At an affordable price.
As temperatures continue to rise in the Houston area, local professionals expect housing market conditions to heat up as well.
“We had a pretty slow start to the year, but we did bounce back in April,” Cotal said. “As always, people are always going through transitions of all kinds, people are always looking for their first home or downsizing or upsizing. The trend is there, even if it’s a little cautious now, but next (in 2024) Half the year will be very healthy.
