Houston's Best & Worst Housing Markets
Read this if you’re looking to buy or sell a home in Houston this year.
Background
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Houston home sales fell 9.1% year-over-year(1). Rising inflation and mortgage rates continue to bring housing demand back to pre-pandemic levels.
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Active listings are up by 27%, but the current 2.0 months Houston home inventory rate is still below the national housing supply rate of 2.6 months. A 6-month home inventory is generally considered a “balanced market”.
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However, these numbers can be misleading. You don’t buy an average Houston house. Sales data can vary wildly based on property type, price point, and location.
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Buyers and sellers need to look at trends within their targeted segments instead of just relying on the overall stats.
Our greatest concern is that last year’s euphoria (2021 home sales were up 13%, and total dollar volume was up 28%) led to some really risky deals that violated the 9 Kisses of Death – the 20-year research study of what NOT to buy in Houston.
The data below, along with our case studies of last year's home buying and selling mistakes, highlight the value of targeted trends vs "full Houston market averages".
Summary
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We have mapped out the sales trends of 12 different housing segments.
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Broken down by property type and price point, we have prepared the 10-year sales data of EACH segment to gain insight on how that specific section of the market will trend.
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Houston real estate is hyper-local. For buyers and sellers, it's imperative that we understand which segments and price points are in a buyer's and seller's market.
Takeaway
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This data set should serve as a guide to your negotiating style & pricing strategy.
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If you use the wrong negotiating or pricing module, it can cost you significant time, money and heartache.
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This data is presented by property type & price range for “close in Houston.” (Other formats: Top Schools, Best Appreciation, Best Suburbs, or Request your own format.)
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Since Houston real estate is hyper-local, understanding the gradations in your particular niche is critical.
"The Houston Properties Team is the #1 boutique real estate team in Houston for good reason. Paige, Lisa & Shannon are incredibly candid and professional and they go the extra mile. Their analytics system is 2nd to none, their Success Team is exceptional and on the ball, and they have vendors for everything you'll need." – Google review
Table of Contents
- Houston Real Estate: The Good, The Bad, & The Ugly
- Absorption Rates And What It Means For You
- Houston Housing Market: 10-Year Appreciation Rates
- Houston Housing Market: 5-Year Appreciation Rates
- Houston Housing Market: 1-Year Appreciation Rates
- Sources, Methodology & Disclosures
- Paige Martin & The Houston Properties Team
Houston Real Estate: The Good, The Bad, & The Ugly
“Paige Martin is the best Houston Realtor. She is highly experienced and very knowledgeable. Paige and The Houston Properties Team made our buying experience an enjoyable one, not only for us, but for our daughter, son-in-law and several of our friends. We have bought and sold many houses, and Paige has been the best realtor we have ever worked with. We highly recommend her.” - Jeremy & Lynn Greene
Inflation, mortgage rates, oil price hike, and the post-lockdown return to normal life are starting to impact the Houston real estate market.
Houston home sales are down 9.1% year-over-year(1). At 2 months, Houston home inventory is still well below what is considered a balanced market (6 months).
However, this outlook can be a bit misleading for buyers & sellers. Why?
- You don't buy or sell an average house.
- The average* stats don't reflect the trends in your specific target Houston housing segments.
- The government response to the pandemic has skewed personal finances. We're well over two years into the pandemic and we're still seeing its unprecedented impact on the way the housing market moves.
- The price of oil continues to be a wildcard.
- Typically there's a 6- to 12-month lag on how the market reacts to economic dips or spikes.
For example, when you divide the Close-In Houston real estate market(2) into 12 segments based on property type & price range, the data indicates:
- There's a big gap in the appreciation rates.
- More than half of the market is still down from when oil prices peaked 7-8 years ago.
- 33% of the market is still in a “strong buyer’s market.”
- Sellers currently still have the upper hand in about 50-60% of the market.
Now is a good time to be a buyer of:
- $1M+ Highrise / Midrise Condos
- $500K – $1M Highrise / Midrise Condos
- $250K - $500K Highrise / Midrise Condos
- $1M+ Townhomes
Now is a good time to be a seller of:
- $100K – $250K Townhomes
- $250K – $500K Townhomes
- $100K – $250K Single Family Homes
- $250K – $500K Single Family Homes
- $500K – $1M Single Family Homes
- $1M+ Single Family Homes
Over the past 10 years, the best appreciation rates have come from:
- Land value
- Homes zoned to top-ranked schools
- Homes close to major job centers
- Homes within the top suburbs
Absorption Rates And What It Means For You
Many of Houston’s most popular neighborhoods are also, historically, the best performers in real estate appreciation. Contact us for a custom list of homes in these areas and a comprehensive Houston real estate market forecast.
The absorption rate shows how many months it will take to sell out the current supply of homes available (excluding any new listings) based upon the current rate of sales.
As a sample, if there are 10 homes for sale on your block, and 1 home sells every month, then there are 10 months of inventory (e.g. it should take 10 months to sell all of the homes on your block.)
5 – 7 months is a “balanced market.”
A smaller number is better for sellers. A larger number is better for buyers.
Right now, in Houston, it’s a good time to be a buyer of:
- $1M+ Highrise / Midrise Condos
- $500K – $1M Highrise / Midrise Condos
- $250K - $500K Highrise / Midrise Condos
- $1M+ Townhomes
Right now, in Houston, it’s a good time to be a seller of:
- $100K – $250K Townhomes
- $250K – $500K Townhomes
- $100K – $250K Single Family Homes
- $250K – $500K Single Family Homes
- $500K – $1M Single Family Homes
- $1M+ Single Family Homes
Houston Housing Market: 10-Year Appreciation Rates
“Paige is simply amazing! Paige is a customer service driven agent that doesn’t let any small details slip past her. She is meticulous with her offers, inspections, and knows how to effectively negotiate the right price for her buyers and sellers” - William Swallen
Over the past decade, nearly all types of Houston real estate have performed well.
Townhomes between $100K-$250K are top performers. The development of affordable housing in some of Houston's Best Suburbs has spurred this growth.
Condos have seen a significant jump as well. This can be attributed to the rapid growth in the Inner Loop areas, and due to more people looking to move to flood-proof homes.
Luxury townhomes over $1,000,000 are starting to pick up, along with other luxury properties. This may be partly due to the Houston home prices falling slightly, and the fact that many of these luxury townhomes are within neighborhoods that did not flood during Harvey.
Despite this, townhome sales are still lagging behind performance-wise. When comparing Houston townhomes vs Houston single family homes, the appreciation of land value typically exceeds appreciation for any given structure.
Read more about Houston Best Real Estate Investment Themes.
Houston Housing Market: 5-Year Appreciation Rates
Whether you buy or sell first depends on the current market and your unique situation. Both options come with an element of risk. Our experience taught us to make the proper assessment out of the overall scenario every homeowner is in. Contact us to help you make the most viable decision.
Over the past five years, properties within or in close proximity to major job centers (e.g. Downtown, Medical Center or Galleria) have appreciated very well.
In addition, here are some of the key success themes for the three property types that appreciated the most over the past 5 years:
- School zoning;
- Close proximity to a major job centers (Downtown, Galleria or Medical Center).
- The Medical Center area has also been in continual high demand.
- Two bedrooms are often easier to resell or rent out, as it can be rented to people with a roommate.
- Access to public transportation (METRORail or good bus lines).
- Try and avoid being right on a railroad or freeway.
- Having a good floor plan matters.
Houston Housing Market: 1-Year Appreciation Rates
Buying or selling a home within the best neighborhoods can be very tricky, especially with the current Houston property prices and segments. With over $500M real estate sales, the Houston Properties Team is the #1 Boutique Real Estate Team in Houston. Contact us for a custom Houston cost of living calculator, and we can review your options.
Last year, the Houston housing market saw an unprecedented shift due to the economic whiplash of COVID-19. We entered 2021 in a seller’s market.
This year, we're seeing a lot of volatility across the board driven by inflation, mortgage rates, and a global economic correction (after a very strong surge post-Covid-19 lockdowns).
When comparing 2022 results to the full 2021 data, the Houston housing prices trend is very notable, including:
- The luxury condo market is seeing a resurgence. New construction mid-rise condo projects that entered the market during or right before Covid-19 is seeing renewed interest. People are also returning to the main hubs. However, more units mean higher competition. We may see some market correction in the very near future.
- Condos at some of the older buildings have mixed sales, making it increasingly important to buy a condo in one of Houston’s premier condo buildings. (For a detailed report on which buildings are performing better, contact us.)
- We're seeing a market correction in single-family home sales. The home buying frenzy of the last 1-2 years have led to some really risky deals. Inflation and rising mortgage rates have also pushed a lot of buyers back to the sidelines.
Please contact me if you’re interested in seeing Houston housing market predictions in 2020 or if you are interested in knowing how your home, neighborhood or area of interest has performed over the last decade.
Sources, Methodology & Disclosures
With all the available information out there about Houston's top areas, it can be confusing when finally making a decision on which neighborhood to choose. We provide comprehensive and substantial Houston home guides and Houston real estate market news to keep you informed and up-to-date. Get advice from the best Houston Realtors and remove the guesswork when looking for one of the best homes in Houston to live in.
- (1) According to the most recent Houston real estate HAR report at https://www.har.com/content/newsroom/ as of the time of this writing.
- (2) Statistical Houston property real estate market trends data for the Close-In Houston real estate market listed above is defined by the HAR MLS Areas 2,4,9,16,17,22,23,24 (originally created by KeyMap), unless otherwise noted.
- Appreciation rates based on Median Sales Price Per Square Foot.
- Sales volume data for 2022 is based on annualized HAR sales figures as of 07/18/2022.
- All Houston property sale information was sourced by the HAR MLS database.
- Data is deemed accurate, but is not guaranteed. Information is provided for informational purposes only.
- If you’d like to see any neighborhoods, master-planned communities or subdivisions added to this bi-annually updated watch list, or want to get an updated Houston housing market trends in 2022, please let me know.
Paige Martin & The Houston Properties Team
The Houston Properties Team has a well-defined structure based on the individual strengths of each member. Each member is a specialist in their role – which is why our homes sell faster and for more money than average.
Paige Martin, Broker Associate with Keller Williams Realty, and the Houston Properties Team are ranked among the top residential Realtors in the world.
They have been featured on TV and in dozens of publications including The Wall Street Journal, Fortune Magazine, Reuters, Fox News in the Morning, Money Magazine, Houston Business Journal, Houstonia, and Houston Chronicle.
Paige Martin was just ranked as the #5 agent in the world with Keller Williams, completing over $1 Billion in Houston residential real estate sales.
Recent awards include:
– 2022: #1 Residential Real Estate Team by Sales Volume, Houston Business Journal
– 2021: Best Real Estate Teams in America, RealTrends.com
– 2021: Top 100 Women Leaders in Real Estate of 2021
– 2021: America’s Top 100 Real Estate Agents
– 2021: Top Real Estate Team (Houston Properties Team), Houston Business Journal
– 2021: Best Houston Real Estate Team, Best of Reader’s Choice
– 2021: Top Real Estate Team (Houston Properties Team), Houston Business Journal
– 2021: #1 Real Estate Team, Keller Williams Memorial
– 2020: America’s Best Real Estate Teams, Best of America Trends
– 2020: Best Houston Real Estate Team, Best of Reader’s Choice
– 2020: Top Real Estate Team (Houston Properties Team), Houston Business Journal
– 2020: #6 Individual Agent, Keller Williams, Worldwide
– 2020: #1 Individual Agent, Keller Williams, Texas (Top Keller Williams Realtor)
– 2020: #1 Real Estate Team, Keller Williams Memorial
- 2019: Top Residential Realtors in Houston, Houston Business Journal
- 2019: America’s Best Real Estate Agents, RealTrends.com
- 2019: #5 Individual Agent, KW Worldwide
- 2019: #1 Individual Agent, KW Texas
- 2018: #5 Individual Agent, Keller Williams, Worldwide
- 2018: #1 Individual Agent, Keller Williams, Texas
- 2018: #1 Individual Agent, Keller Williams, Houston
- 2018: America’s Best Real Estate Agents, RealTrends.com
- 2018: Top 25 Residential Realtors in Houston, Houston Business Journal
- 2018: Texas’ Most Influential Realtors
- 2017: #1 Individual Agent, Keller Williams, Texas
- 2017: #1 Individual Agent, Keller Williams, Houston
- 2017: #10 Individual Agent, Keller Williams, Worldwide
- 2017: America’s Best Real Estate Agents, RealTrends.com
- 2017: Top 25 Residential Realtors in Houston, Houston Business Journal
- 2017: Texas’ Most Influential Realtors
- 2016: #1 Individual Agent, Keller Williams, Texas
- 2016: #1 Individual Agent, Keller Williams, Houston
- 2016: #20 Individual Agent, Keller Williams, Worldwide
- 2016: Texas’ Most Influential Realtors
- 2016: Top 25 Residential Realtors in Houston, HBJ
- 2016: Five Star Realtor, Featured in Texas Monthly
- 2016: America’s Best Real Estate Agents, RealTrends.com
- 2015: #9 Individual Agent, Keller Williams, United States
- 2015: #1 Individual Agent, Keller Williams, Texas
- 2015: #1 Individual Agent, Keller Williams, Houston
- 2015: America’s Best Real Estate Agents, RealTrends.com
- 2015: Top 25 Residential Realtors in Houston, HBJ
- 2015: Five Star Realtor, Texas Monthly Magazine
- 2014: America’s Best Real Estate Agents, RealTrends.com
- 2014: #1 Individual Agent, Keller Williams Memorial
...in addition to over 318 additional awards.
Paige also serves a variety of non-profits, and civic and community boards. She was appointed by the mayor of Houston to be on the downtown TIRZ board.
Benefits Of Working With The Houston Properties Team
Our team, composed of distinguished and competent Houston luxury realtors, has a well-defined structure based on the individual strengths of each member.
We find the team approach as the most effective way to sell homes. We have dedicated people doing staging, marketing, social media, open houses, and showings. Each Houston Properties Team member is a specialist in their role—which is why our homes sell faster and for more money than average.
The benefits of working with a team include:
- the ability to be in two or three places at one time; a member can handle showings, while another answer calls
- collective time and experience of members
- targeted advice and marketing of agent expert in your area
- competitive advantage by simply having more resources, more ideas, and more perspectives
- a “checks and balances” system; selling and buying a home in Houston is an intensely complex process
- more people addressing field calls and questions from buyers and agents to facilitate a faster, successful sale
- efficient multi-tasking; one agent takes care of inspections and repair work, while another agent focuses on administrative details
- multiple marketing channels using members’ networks
- constant attention: guaranteed focus on your home and your transaction
- lower risk for mistakes. Multiple moving parts increase oversights. A team approach handles these “parts” separately
- flexibility in negotiation and marketing
- better management of document flow
- increased foot traffic through more timely and effective showing schedule coordination; and
- increased sphere of influence and exposure to more potential buyers.
To meet all the award-winning members of the Houston Properties Team, please go here.
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- Houston Texas Zip Code Map | HoustonProperties
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- Houston Neighborhoods | Houston Map, Real Estate, Homes
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