Change is in the air – October 2015

With the cooler weather comes a cooler RE season – at least, that’s the typical cycle. We can definitely argue that last year (2014) was an anomaly in the business, given all the folks that moved into our area to fill in the 13,000+ spots in the XOM and other campuses recently built. So, with all the jobs here, and continued low interest rates rates should indicate that the local economy is thriving.  What’s going on right now?

As we indicated previously, oil prices and consumer confidence are a strong barometer of RE activity. Although expert opinion from the energy industry is encouraging (barrel over $80 in the spring – W. Mark Meyer, Tudor Pickering Holt & Co), we can clearly see that at this time, the RE market has shifted towards Buyers. Here are a few data points:

– Inventory has risen dramatically across town. This includes leftover activity from the summer, as well as new listings that come to the market as a result of “normal” turnover activity, like job transfers. This is normal – the volume just appears larger simply because the number of people living in the area is also larger.

– Builders are  offering aggressive incentives to home buyers to get rid of “stock” inventory. Fiscal year end deadlines are upon them, and they want to look good in front of investors. Again, this is normal behavior by builders – just remember that earlier in the year they were aggressively acting upon land that they acquired years ago.

 

 

What this translates to for Buyers is that they are presented a wide array of choices, as they weigh in price, quality (upgrades) and quantity (lot size, square footage, and yes, cash in their pockets!).  To Sellers, this is a time to reflect on how quickly you need to sell the property. The market is definitely not last summer’s, so we must adapt to stay ahead of the other choices that Buyers have. As my swim coach would put it, “if you can’t beat the competition, beat the competition.”

What does the typical “sold” home look like? The sweet spot is 450K and up with a pool, with over 3000 sqft, located in 77382 or 77381, due to its location. Luxury listings (over $1MM) are also experiencing lower Days on Market, depending on location and price.

What we should expect in 2016 – Luckily, the energy sector is not the only source of employment in our area. CHI St. Lukes is set to open its Springwood Village campus in 2016, while Methodist and Texas Childrens continue to roll out parts of their respective campuses through 2017. The Woodlands is slowly transforming itself into a satellite Medical Center, and that’s good for our community in the macroeconomic level. We anticipate a move back to the pre-surge numbers, at least for the time being.

About Danny Sanchez

Joining Rianne's award-winning team after a successful career as a Program and Operations Manager for a global outsourcing firm (with Fortune 100 companies as his primary clients), Danny has seen The Woodlands grow to what it has become today since 2001. An advocate for innovation and perfecting the Best Possible Real Estate experience, he understands very well that clients always come first. In his own words, "success looks like clients feel that they don't have any needs - because you've more than anticipated them."