The Houston housing market has seen some notable changes over the past year. As of October 2023, home prices in Houston have moderated after experiencing rapid growth in 2021 and 2022. This slowdown can be attributed to rising mortgage rates, which have reduced buyer demand and softened competition.
While 2022 saw home prices in Houston peak, the market a year later in 2023 tells a different story. Inventory is higher than it was a year ago, giving buyers more options. Bidding wars are less common and homes are staying on the market longer now.
In this blog post, we’ll take a closer look at key indicators in the Houston housing market. We’ll analyze the data to understand where the market was compared to today and what this means for Houston homebuyers and sellers moving forward. Let's see where September's numbers were at!
Our internal numbers in 2022 & 2023 compared:
*Includes adjustment for larger client base
The data on yard sign installations, removals, average time on market, rebills, and additional services provides interesting insights into the current state of the Houston real estate market.
Taken together, these metrics demonstrate a significant cool-down in Houston's housing market compared to the frenzy of 2021. While prices remain high, buyers have more selection and less competition. Sellers still maintain an advantage in this sellers' market but cannot expect homes to fly off the shelf like last year. The market appears to be returning to more balanced conditions.
With Winter quickly approaching, the housing market activity is already cooling due to eye-popping home prices and interest rates - may be on the verge of a deep freeze according to National Association of Realtors (NAR) .
As we enter the final months of 2023, expectations for the Houston housing market are stabilization and slower growth after the breakneck pace of 2021-2022.
Inventory levels are projected to continue increasing, providing buyers with more options and less intense competition for homes. Seller dominance will begin to decline as supply catches up with demand. Home price appreciation will moderate, slowing to single-digit increases by the end of 2023 compared to double-digit gains in the past two years. Mortgage rates may fluctuate but remain above 5% through year's end.
Overall, Houston's housing market appears headed for a cool-down phase, transitioning from an overheated sellers' market to a more balanced environment. While still competitive, buyers will regain some leverage at the negotiating table. For sellers, it will take more effort to successfully move properties. The frenzied conditions of the pandemic boom years are easing as the market normalizes.
What are your thoughts on the market? What else would you like to know? Shoot us your thoughts. We plan on sending out these unique market analysis reports regularly to help our agents better grasp what's been going on and more importantly what to expect.