As fewer buyers come into the market, home sellers in Houston are cutting their asking prices. This is another sign that the housing market is cooling.
Recent information from two major real estate agencies shows that more people in Houston are lowering the prices they want for their homes. Redfin, a residential brokerage, says that prices were cut on more than a third (38%) of the homes for sale in the Houston area in June. Redfin says that about 25% of homes in Houston had price drops a year ago.
On the other hand, Zillow's numbers are more conservative. They say that 16.8% of Houston homes for sale had their prices cut in June, which is up about 5.6 percentage points from the same month last year.
Even though the numbers are different, they show that home sellers may be starting to lose the advantage they had during the pandemic.
"Home sellers are dealing with a market that is changing quickly," said Redfin Senior Economist Sheharyar Bokhari in a statement. "This is especially true in areas where they're used to seeing their neighbors' homes get multiple offers and sell for more than the asking price." "Potential buyers in popular places to move are putting their plans on hold because mortgage rates are going up and there could be a recession. Sellers are changing their expectations as they realize they might not get the same price as their neighbor did two months ago.
A small town north of Houston is getting a 400-acre luxury home development.
Houston home sellers, on the other hand, don't seem to be under as much pressure to lower their prices as sellers in other major metros, where a rush of people moving because of the pandemic may have led to bigger real estate gains earlier in the pandemic.
According to Redfin, Boise was one of the most popular places for people to move because of a pandemic. As a result, the average home price there jumped to $550,000 in May, which was more than a 60% increase from two years earlier. Based on Redfin's analysis, 61.5 percent of homes for sale in Boise had their prices cut in June, which was the most of any city in the country.
According to the Redfin analysis, more than 25% of sellers in about three quarters of the country's biggest cities lowered their asking prices.
In Texas, home sellers are seeing the biggest price drops in Austin, where a lot of people moved because of the pandemic and drove up real estate prices quickly. Redfin says that the prices of about 41.6% of the homes for sale in Austin dropped in June, compared to only 14.9% at the same time last year. In June, the prices of about 37.5% of the homes for sale in Dallas and San Antonio dropped, which was a little less than in Houston.
Even though the market isn't as crazy as it used to be, prices are still going up, albeit at a slower rate. Most metro areas in Texas are still getting a lot of out-of-state buyers because homes are still relatively affordable. In California, for example, a typical home sells for more than $1.5 million in many of the state's biggest cities.
The Houston Association of Realtors says that the average price of a home in Houston in June was $436,000. On Redfin's list of the top cities where people wanted to move, San Antonio was ninth, Dallas was tenth, and Houston was eleventh.
Redfin's Deputy Chief Economist Taylor Marr said, "These factors, along with the fact that more companies are giving employees the permanent option to work from home, are making more buyers think about homes in other parts of the country." "Someone who couldn't buy a home in Los Angeles without going over their budget might be able to in Phoenix or San Antonio."
Marr could have also said something about Houston. In the second quarter, the top places where Redfin users who didn't already live in Houston were looking to move from were Los Angeles, New York City, and the Bay Area.
Leslie Don Wilson
Realtor - ABR AHWD ALHS CIPS CNE CRS GREEN GRI MCNE SFR SRES TRLP
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Texas Pride Realty Group
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