They say that blogging is more like sharing a story, interest, feeling or maybe some just some facts that people may or may not read…well this is my first blog so we will see how it goes! I hope that you will walk away with some type of new perspective if nothing else.
I moved to Austin, TX in August of 2013 from Orlando, FL, the 2nd largest economically distressed state in all of the U.S. back in 2007. I had sold real estate since 2010 and over 100+ homes a year. Meeting with families who were financially, emotionally, and physically distressed was one of the most challenging aspects of the business, and when I got to help them, the most rewarding time as a Realtor. Now, what does that have to do with anything in Texas? I can smell changes in the market from months away!
As soon as I moved to Austin and started helping agents in Lakeway, TX I noticed that Days on Market was getting longer, List Price to Sales Price started going down, and more options (inventory) were popping up for the buyers. Although these changes were very subtle, if you watch these trends closely you can statistically “guestimate” when Market Shifts will occur.
Before moving on I would like to disclose that market shifts in different locations can last for varying lengths of time. In Florida it took almost 8 years to see stabilization, whereas in Austin I noticed that it only lasted about a year and now here in Houston…who knows? 1 year? 2 years? Maybe 3?
Now to Houston, will the bubble burst? Gary Keller, Co-Founder of Keller Williams, states we should be expecting another recession between now and 2020 based on trends. I respect him highly, so I wont disagree; however, what I do know is that once again:
- 1. Inventory has gone up
- 2. List Price to Sales Price ration has gone down
- a. < $200K: 98%
- b. $200-$300K: 97%
- c. $300- $500K: 95%
- d. $500-999K: 93%
- e. $1M+: 89%
- 3. DOM average is 89 days
***Now please note this has been pulled for all North Houston and in the last 90 days.
We are in a Buyers Market no matter what Sellers, Newspapers, or other agents who don’t study these numbers say.
This doesn’t mean that if you price to market it wont sell! Another statistic found was if a home had a DOM less than 30, it sold on Average 99% LP/SP.
Want a last warning sign? More For Sale by Owner homes and haggling with a Realtors commission. There becomes a smaller margin for profit for sellers, so they want to get a $1 where ever they can.
So does this mean the bubble is bursting? To a certain extent I think it is, because in a way Houston still has a sense that we are in a Seller’s market, so it is “bursting” but will it be 2007 all over again? No, I do not think so.
- 1. The most recent closing is now considered your “Ceiling” for your new listing.
- 2. Your competition becomes broader. Know it, and price according to how you have VALUE.
- 3. Study the Hot Sheets of what’s happening out in the market every morning.
- 4. Do not be blind to it, it only hurts the Seller & you & your family!!!
- 5. Stay Focused.