New Year, New Market?

What’s going on with Houston's housing market as we enter 2023? *

Sales of single-family homes have slowed down from 2022 by about 31% due in part to
rising interest rates. Homes are also taking a bit longer to sell than a few months ago (from 35
to 48 days). However, inventory has increased, meaning there are more houses for sale than
last year.

Despite some of this bad news, Houston is weathering the downturn better than many other
markets. We have a diversified economy, and we are still a growing city due to impressive job
opportunities, a low cost of living, zero income tax and warm weather year-round.

Is it a buyers’ market or a sellers’ market? **

A 6-month supply of houses is considered a balanced market. Since we now have 2.9 months of
inventory (compared to 1.5 months of inventory a year ago) we are moving towards a balanced
market and away from a market where multiple offers were common.

What does this mean for you?

With more houses on the market and longer days on market, as a buyer you may have more
negotiating power. As a seller, it is important to list at an appropriate price, make sure your
home has curb appeal and trust the expert advice of your realtor.

Remember that all homes sell whether in an up market or down market as everyone needs
housing. The difference may be the sales price, time on the market and number of offers
received.

What are the opportunities in this market?

It may be a good time to buy an investment property to lease out, as rental rates have
increased, and some prospective buyers have shifted to the rental market until the economy
and interest rates improve.

Any helpful tips?

If you purchase a property, consider asking the seller to contribute funds to lower your interest
rate. This is called a buy down. This is advantageous to a buyer because it lowers their interest
rates for a couple of years. It is also advantageous to a seller as it makes their property more
competitive by offering buyers a lower interest rate. Also, many mortgage companies will
refinance free of charge in order to get your business, which will be useful when the interest
rates decline.

*National Association of Realtors
**Houston association of Realtors