Since the oil prices have gone down, one of the first question people always ask is how is it affecting the real estate market. Until recently, the answer was: not so much.
However, the July 2016 monthly report from the Houston Association of Realtor (https://www.har.com/content/mls/) is the first one to show a significant decline in property sales
(-8.6%) but the average sales price has basically remained flat. What we are observing is that the higher end market is definitely slowing down, nicer property still go off market quickly but not so updated homes take longer to sell.
On what I like to call the ‘median market’ (property that can be afforded by people earning around the median US salary) in the price range 150k-250k property are still receiving several offers after a few days or weeks on the market. The under construction in that price point in the last three years has left Houston with a structural unbalance between the offer and demand which is not close to being rebalanced.
It is to be noted that rentals are up both on a sales number and rent amount basis.
What is the takeaway?
1.If you are a buyer in:
a.The high end market
Now is the time to shop, there is plenty of inventory and room for negotiation.
b.The ‘median market’
This market is still ‘hot’ and you need to be ready for bidding wars and making fast offers to get the property you want.
2.If you are a seller:
a.In the high end market
Your property needs to be in good condition, the times of receiving multiple offers regardless the level of upgrade are over.
b.In the ‘median market’
You are still in a strong position, if you present your house well, it will get multiple offers in a short time, it is a good position to be in.
3.If you are an investor buying rental properties
When time are uncertain, people have a tendency to rent more than to buy, it was the case after the 2008-9 financial crisis and it is observed again today: rentals bellow $2000 are in high demand and there is no shortage of renters.