Punxsutawney Phil didn’t see his shadow, so he’s forecasting an early Spring. I’m patiently (yea, right) waiting for the market to “heat up” too, with better results for both Buyers and Sellers. So, let’s hope that Phil is an appropriate metaphor for the local real estate market and we’ll see an early Spring with “blooming” sales activity.
January always has mixed results because it is the first month after the Holidays, which are the slowest months of the year. Usually this is a month that is witness to a modest increase in Buying activity, as Buyers begin to re-enter the market. Unfortunately, that didn’t happen. Active Listing rose by (17). And, the number of Listings in Pending Status dropped in January. Not by much from December, yet they should have gone up. Consider this fact though, in January 2018, there were (99) in Pending, nearly double this January. It would also be reasonable to expect the number of homes that Closed (Sold) in January to be lower since most of the Contracts were written in December. “Lower” is what you would expect, but not to plummet to less than half of December, which it did. This was 50% lower than last January. Imagine; just (23) homes Sold in an entire zip code. Really! Being positive though (I try), it only means we start the year at the bottom and can only go up from here.
Below are the January results by Community.
Although the market slowed and the number of Active homes on the market increased from (44) to (48); with all things considered, this was acceptable news. Unfortunately, that was the only “good” news for January. There are only (4) homes in Pending Status and that is less than you can count on the proverbial “one hand”. Can it be worse? Yes, Virginia it can be. There were only (2) homes that Sold. Both were Resales, yet both Closed at a lower cost per square foot than what would be normal. What doesn’t change though, is that our neighborhood is special and it will do well even in challenging markets.
According to band Three Dog Night, “One is the Loneliest Number”. This would be fitting to describe the results for Fulbrook. There is only (1) home in Pending Status. This Listing is ours and was a Contingency. It worked out well for both and Seller, but took forever to get to Closing! There was (1) Listing that Expired, so that means total Active Listings declined by (1). As a result, just like in the preceding months, there was NO other activity. None. However, there wasn’t much activity anywhere else either. So, it is reasonable to expect that in the higher-end of the market, the results would not be any better. In fact, in the last 6-months only (2) homes have Sold above $1 million in the entire 77441 zip code.
Fulbrook On Fulshear Creek:
Last month I was trying to be positive, and indicated that “the good news is that Active Listings declined from (30) to (29)”. “Not much, but a drop is better than an increase” Well, that was in December. So, what do you say in January when Active Listings rose yet again? This time by 26%, to a total of (38). Additionally, there are only (4) Listings in Pending Status. Worse yet, all were New Homes except for (1). Can the results get any worse for Homeowners in this fabulous community? Yes, they can! January witnessed the first time, in a long time, where there was not even one home that Closed. Not the best way to stat the New Year and a lot like the bride being left at the altar. This is an exceptional community though, and hopefully, it won’t be long before Buyers discover this fact.
Cross Creek Ranch:
In December, the number of Active homes on the market continued to decline. That rewarding trend ended in January where the Active’s rose from (108) to (117). An 8% increase, yet considering the overall market conditions, this was actually good news. That gives some insight into the challenges Sellers (and Agents) are facing when bad news that isn’t so bad, actually means it was good news! There were some sound positive results though. There are (34) Listings in Pending Status, which for January, would be welcomed results. Unfortunately, (25) or 74%, were New Homes. And, there were just (16) homes that Sold. Which may make this the lowest January total since 2014. Once Buyers come out of hibernation, all the results will quickly trend positive though, and will turn this from a “bear” market to one that can run with the bulls…
There was one “shining star” that posted results contrary to the overall market. That was Fulshear Run. It is a community comprised of only higher-end homes. It opened in 2016, hit the ground running, and hasn’t stopped out performing most all other communities. In January, the number of Active Listings remained the same at (9). There are (3) homes in Pending Status. And, the only reason that there are not any Closings, is that the homes in Pending are not yet completed.
It is a fact that the market determines Prices and Days on the Market (DOM). It doesn’t matter what you paid for you home, how much you want to “net” from the sale, or how quickly you need to Close. The market determines this. That means, in more challenging market conditions, Sellers need to react accordingly and set realistic expectations. In a true Seller’s market, everything sells and does so quickly. Doesn’t matter if you have stained carpet, that your home is cluttered, that it backs to a very busy road, that you have laminate counter tops and vinyl floors in the Baths. There is always a Buyer, because they don’t have other choices.
Not so in a Buyer’s market. They take just the “cream de la cream” and leave the rest to languish on the market, coupled with Price reduction after Price reduction. And, why shouldn’t Buyers pick only the best? What would give a Buyer reason to purchase a home that is not exactly what they want? Why would they want to go through remodeling or updating a home, when there are plenty of other homes on the market from which to choose? One’s they like better. So, if a Seller doesn’t want to update their own home that they are trying to sell, what would make this appealing for a Buyer to do so?
Below is how Sellers see their home on the left, and how Buyers see the same home on the right.
The fact is we are in a challenging market. It’s not quite the proverbial “Buyer’s Market”, yet it is far from a Seller’s market. What is also unique to our market is the fierce competition from the extraordinary amount of New Homes that are concentrated in our area. And, Buyers want what New Homes offer. They want the latest in designs, colors, floor plans and amenities. As I mention to our Clients, we are in a war against the New and Sellers need to meet Buyer demands, If Sellers don’t, they are in essence telling Buyers, “I don’t want to incur the inconvenience, nor the cost to fix up my home, I want you to do it”. This doesn’t go over too well with Buyers. Just offer a lower price? That still means you are trying to sell a home that Buyers don’t like. In short, selling a home is no different than when you detail a car before you try to sell it. You make it look its best to extract the highest value and the greatest emotional appeal. The fundamentals of marketing.
(Advertisement) This is also why we don’t charge to professionally stage your home, why we use value driven contractors to do the work and why we supervise the job for free. Because we know it is very difficult for most Sellers to do this and Buyers simply won’t…
Mike is consistently one of the “Top 5” RE/MAX Agents in Texas and one of the Top 50 nationally. In addition, he is recognized every year by the Houston Business Journal as being one of the Top 10 Realtors in the Greater Houston area.