Houston Real Estate Market Trending to Favor the Buyer
The Houston Real Estate Market has been unusually volatile during the last few years; it was almost a perfect storm of variables in a great economy.
- The housing inventory was extremely low
- A good economy encouraged folks to consider upgrades, and
- A pandemic changed the workplace for a large percentage of the workforce
The constant factor about the real estate market is that it constantly changes. If volatility and competition have sidelined you, recent changes might be just the encouragement you need to consider taking another look at the current state of the marketplace.
- Improved Inventory. One of the factors that drove prices higher is low inventory; there were more buyers than sellers, and not enough houses available for the market. While the inventory is still low, it has improved by 27% compared with last September.1 More inventory relieves pressure, giving more buyers an opportunity to buy.
- Closing Cost Shares. Prior to the pandemic market rise, motivated sellers commonly paid a portion of the closing cost as a negotiating strategy. During a seller’s market, this tactic was no longer necessary; buyers paid all of the closing costs—between 2 and 5%.
One result of the market slowdown is the return of closing cost negotiation. According to realtor.com,2 32% of current sellers are willing to pay some or all the closing cost. On a $400,000 home purchase, closing costs will range between $8,000 and $20,000; this trend can result in a tremendous bargain.
Remember: the amount of closing cost that can be rolled into your mortgage is set by the lender and may be governed by a state regulatory agency. Closing cost negotiations can make or break a real estate purchase.
- Price Negotiation. For a period of time, desirable properties commanded top dollar; in February 2022 82% of homes sold at or above the asking price. Within the last month, that percentage has dropped by about 13%. That is good news for buyers.
- Buyer Safeguards. Normally, a few contingencies usually slow the purchase process and serve to protect the buyer. A home inspection detects potential problems with costly repairs and appraisals make sure the home value covers the asking price. A buyer caught up in a bidding war might forego these safeguards to seal the deal.
According to the National Association of Realtors, these practices are on the decline.3 A recent survey reveals that 95% of buyers requested a home inspection and 67% of sellers negotiated with buyers concerning necessary repairs uncovered by the inspection. After an interest rate increase, appraisal becomes more of a necessity.
Stay tuned, folks! Houston Real Estate Market shifts happen often and fast. Perhaps some of these changes will entice you to make a move, both figuratively and literally. Stay in touch with your realtor for the latest trends in the Houston Real Estate Market.
