Friday, May 6, 2016

What Real Estate Agents Need to Know About the Market in 2015

What real estate agents need to know about the market in 2015

*This is a post I wrote back in December 2014. I hate to see it coming true right before my very eyes, but we've seen this before and I'm sure we'll see it again. 

There’s been some speculation about what will happen to Houston real estate with $50-$55 oil. I have been in the business for 28 years, and have lived through two bubbles and two recessions. With age comes wisdom…and calmness. I’m here to tell you that all is well, that what goes up can come down and vice versa.  

So what do agents need to know to prepare for 2015? This:
  • The November/December numbers are going to be low. This doesn’t mean that the housing is poised for a crash. It means that 60% of the buyers in Houston are transferees and they don’t move at this time of year. They will finish out the school year.
  •  No, it will not be like 2014. Selling a home will go back to becoming a process versus a one-day-open-house-and-it’s-sold scenario.  In other words, homes will no longer sell the first hour they’re on the market. We’re going from speed dating back to traditional courtship.
  • Fewer sales means more agents will leave the business. You will see more of them retiring and younger agents feeling like they need more stability in a job and paycheck.
  • Buyers will misread the headlines.  News has become like a tapas bar-we only read the headlines.  The headline reads, “Houston sales will be down 10-15%” yet buyers will interpret that to mean prices will fall 10-15%.  If you read past the headlines, “prices will continue to increase”.  
  • We will have steady appreciation and fewer bidding wars.  Buyers will have time to make smart decisions versus impulsive ones. With this, comes a new slower pace for the real estate market… a normal pace. 
  • It will be a great time to represent buyers because we will see a 1-3% appreciation versus a larger appreciation, which means homes will be more affordable.
  • We have continued in-migration but at a slower rate. People still are moving into Texas, not leaving. Seven of the fifteen fastest growing cities in the U.S. are located in here. 
  • We’re #1 in job creation. Texas leads the nation in the creation of jobs: 40% since 2009. (If it slows down, we’ll still be happy. It would give us time to fix our roads.) 
  • Homes must be priced on the market, not overpriced and you must look at how many homes are available in that price range.  Inventory/competition will become a key factor in pricing. 
  •  Minimal building. When oil prices go down, lenders get a little uneasy.  Spec building comes to almost a complete halt. But on the bright side, this stabilizes the supply and demand side of housing. Apartment building slows down. Yippee!