How buying a home in Houston has changed over the past 5 years – Over the last few years, the real estate sector, particularly for home buyers, has seen significant changes and upheavals. Some of these changes are the result of COVID’s introduction, while others are simply the outcome of natural cycles. Whatever the reason, house buyers need to be aware of what has changed so that they can anticipate what they will face. So, here’s a look at how home buying in Houston has changed over the last five years.
Inventory Has Decreased
One important way buying a home has changed over the past few years is that inventory has fallen. Thee are more buyers than there are homes for sale, that is, not enough product to meet demand.
Previously, in a “strong” real estate market, there would be roughly six months’ worth of unsold inventory. “At the present sales rate, it would take six months for all of the homes on the market to sell.” According to figures from the National Association of Realtors, unsold inventory nationwide was less than half of that in recent months, and much lower in hot cities like Houston.”
While this low-stocking situation is projected to improve in the coming months, inventory levels remain low for the time being. As a result, there has been fierce rivalry, various offers, and escalating costs (which we’ll discuss further below). Contact a local agent at (713) 866-4000 to learn more about inventories in Houston.
Competition Has Grown Fierce
As we mentioned, buyer competition for homes, owing in large part to the low inventory, has grown pretty fierce. And anyone buying a home in {market_city] needs to take this into account.
“In some hot areas, the competition is so tight that successful buyers feel almost like sweepstakes winners,” industry insiders add. Nearly half of all home sellers receive several offers, up from 40% during the recession’s worst days.”
This keen competition has also meant more and more frequent offers above the asking price. And this in turn has resulted in fewer sellers taking the first offer they get.
Desirable Homes Sell More Quickly
With little inventory and fierce buyer competition, desirable properties are selling far faster than they were just a few years ago. When buying a property, this is yet another vital factor to consider, as well as another incentive to engage with an experienced Houston agent.
Consider that formerly “available inventory would sit on the market for longer. Just before the initial recovery [from the last recession], a mere 22% of homes sold in less than two weeks; now, 28% of homes sell that quickly.”
Prices Have Risen Dramatically
Further, as we indicated, anyone buying a home is now likely to pay more because home prices have been on an upward trend. The rate of the increase in prices is slowing, but are still going up.
According to the National Association of Realtors, home prices surged 14.7 percent in 2021, but are predicted to decline to 2.8 percent in 2022. “Other experts’ forecasts differ, but expected percentage improvements remain in the single digits.” According to Fannie Mae, the increase will be 7.4 percent. Freddie Mac estimates a 7.1% increase, while the Mortgage Bankers Association predicts a 5.1 percent increase.”
So, however you cut it, home prices have gone up and will continue to increase. To find out about price trends in your market, contact a Houston agent at (713) 866-4000.
The Millennials Have Arrived
Buying a home in Houston has also changed over the past 5 years because of the huge influx of millennials – now the “biggest group of first-time homebuyers” – into the buying market. Two salient changes stand out . . .
First and foremost, walkability has become a major concern. “A mix of popular daily shopping and social locations within a short distance” is what walkability refers to. “[H]omes with above-average walk scores fetch a premium of between $4k and $34k in typical metro settings.”
Second, home shopping and buying a home have gone largely online, with the Internet becoming “the tool of choice for house hunters.” Of course, home buyers used the Internet before, but “the way property shoppers use the Internet has changed.”
“Many homebuyers have already compiled a shortlist of residences that catch their attention from [a variety of online sources]. Although there is still a demand for agents and brokers, their primary focus has shifted in many ways. They are no longer the sole sources of information and curators. Experts, negotiators, and facilitators are in high demand now more than ever.”
Online Mortgages Have Become More Common
Another aspect of home purchase that has evolved in recent years is financing. In the past, purchasers would inquire about mortgage possibilities and apply for a loan at a bank or other brick-and-mortar lender. But that is no longer the case.
“Today’s younger generation uses the Internet to compare mortgage offers. The aspects of the internet that this generation adores also apply to the online mortgage market. They like simple user interfaces, immediate digital communication, and on-demand service when they’re ready to buy.” It’s no wonder, then, that non-bank lenders now account for more than half of the top mortgage lenders.
A Good Houston Agent Is More Important
Given the developments outlined above, the most significant shift in buying a house in Houston over the last 5 years is the increased importance of a reputable local realtor for buyer. In such a market, a local agent’s experience has become crucial, especially with low inventory, fierce competition, and escalating prices. So, if buying a home is now on your mind, give us a call at (713) 866-4000.