Want to know what’s happening in the real estate market? Craziness. Throughout all of 2021 we experienced a massive inventory shortage. There simply are not enough homes for sale to keep up with buyer demand. That problem persists. In January, the inventory of single family homes in the Greater Houston Area was just 1.4 months. That means it would only take 1.4 months to sell every available home listed. Six months of inventory is the benchmark for a balanced market. So to say that we are in a seller’s market is an understatement.
This massive supply and demand problem has pushed sales prices up to unbelievable levels. The average sales price of a single family home in the Greater Houston Area was $377,738 in January. That’s the highest average sales price ever for a January.
WHEN WILL THIS CRAZY APPRECIATION SLOW DOWN?
No one really knows. BUT, we can tell you this. Interest rates are rising. At their lowest point last year, we were seeing interest rates in the 2’s. They’re now topping 4%. The Fed has tapered its purchase of mortgage-backed securities and will stop purchasing them altogether as early as March. We don’t know how high rates will go, but it seems that at some point, insanely high sales prices coupled with higher interest rates will price a lot of buyers out of the market. Will an unfortunate mortgage affordability problem ease the inventory problem? It seems likely, and that’s what we’re keeping an eye on.
SELLERS, HERES THE BOTTOM LINE:
If you’ve got plans to sell in 2022, you might think about listing ASAP while demand is high, prices are high, and interest rates are still manageable for your potential buyers. If you wait until rates go up further, you might miss out on a whole pool of buyers who can no longer afford to buy your home. If you want to know more, give us a call at 281.691.6177 or send us an email to send me an email. Read more about what we do for our sellers HERE.