Most, if offered the choice, tend to buy New. Those looking at vehicles, prefer the shiny New one off the Showroom floor rather than a used one off the back lot. And, those that can afford the price tag of a $400,000 Ferrari, definitely want to buy New. Yes, an overused metaphor perhaps, yet this is the same for Homebuyers too. Most, if spending hundreds of thousands of dollars on a home prefer New. And, that is the moral of this “story” because the New homes are controlling our market.
As per below, the overall results for October reveal a reasonably good month; and using another metaphor, the “waters” appear calm. Yet, the New are creating an “undertow” that is pulling the Resales down. As insight, nearly 70% of the Active Listings have Price Reductions while the average Days on Market (DOM) is steadily rising. However, when looking closer, 72% of those in Pending Status are New and nearly 50% of those that Sold are New Homes and this is reveals how the New are pulling down the Resales…
October Results by Community
The trend lines here have not been very rewarding over the last several months for Sellers. Unfortunately, that continued into October. Active inventory may have stabilized at (49), but this is at the higher-end of the spectrum. There are (9) homes in Pending Status, and that is very favorable. As perspective, this is more than double that of September. There were only (4) homes that Sold though, which is even down from just (5) in September. However, that is because there were so few homes in Pending. In short, for the last few months it’s been a tough market for Sellers, especially in the higher price range, but Weston Lakes is one of the most desirable communities, so Sellers just need to have their home looking as “new as possible” and try to be patient.
This is one of the finest acreage communities in the Houston area and it was rewarding to see the results for October where Active Listings remained the same at (7). We were also pleased to have one of our Listings enter Pending Status in just (21) days. However, the best news is found with the (2) homes that Sold. That is impressive when you consider Fulbrook is comprised mostly of homes valued above $800,000 and the market has not been kind to Sellers in this Price Range. One may be the “loneliest number” (Three Dog Night), but not here. In all of Zip Code 77441, there were only (3) homes that Sold above $800,000 and (1) of these was in Fulbrook. In addition, there was (1) other Listing that Sold in Fulbrook. So, it is “weathering the storm” well in a very tough market.
Fulbrook On Fulshear Creek:
In 2019, it has taken “tough mudders” to slug their way through this very difficult market. Sellers living in such a desirable community in fabulous homes, makes this even harder to comprehend why it isn’t more appealing to Buyers here? Unfortunately, it wasn’t in October where Active inventory rose to (29). That is on top of the 25% increase in September. There are (4) homes in Pending Status and the good news is that (2) of these were Resales. Yea! However, only (3) Sold and all were New Homes. So, can it get any more difficult for Sellers? Regrettably, the answer is “yes, it can”. The slower winter and Holiday months are now upon us.
Cross Creek Ranch:
Not that I like metaphors (yea, right), yet finding good news in this market is often like trying to find the proverbial “needle in a haystack”. Well, if the needle is big enough, it’s a bit easier to find! That was the case in CCR. First, Active inventory dropped to an even (100) and that was pleasing. Although, the Listings in Pending declined from (44) in September to (39) in October, this was offset by (29) Listings that Sold. This was a significant rebound from a low of (13) in September. Even though there was a “needle” of good news, the New Homes adversely impacted the Resales. The New comprised 59% of the Actives, a whopping 85% of the Listings in Pending Status and 55% of those that Sold. My concern is that with the end of year fast approaching, this is when most New Home Builders offer increased incentives to reduce their year-end inventory and thus become even more competitive.
In September, Fulshear Run was witness to an end of its long run of posting results that were better than the overall market. So, October results were refreshing to see, as this mostly New Home community of higher-end homes, returned to “normal” with positive results again Active inventory dropped, albeit by just (1) to a total of (7). However, in this market, any decline is positive. In addition, there is now (1) home in Pending Status. More impressive, it was Listed over $700,000 which shows the strength and appeal of this community.
For outperforming the market by leaps and bounds, the “Shining Star” award goes to Polo Ranch. This New Home community just recently opened and has witnessed more than impressive results. There are now (19) Active homes on the market, which is a dramatic increase over the (7) in September. No worries though. That’s because they sell them just about as fast as they can build them! Want proof? There were (25) homes in Pending Status at the end of October. The homes in Active Status averaged just over $247,000, and at $123 per square foot, while those in Pending averaged $224,000 and at $134 per square foot. As with most communities, Polo Ranch has two distinct neighborhoods. Almost all the activity has been in the lower priced range neighborhood. Currently, in the upper-end neighborhood there is only (1) home under contract above $300,000. So, we’ll see how this trends as Polo Ranch develops further.
You only have to look at the front page of Sunday’s Houston Chronicle to see how fast the Fulshear area is growing. It is certainly not the small town where just a few years ago many didn’t even know where it is located. Not anymore. Nope, the growth is phenomenal and there are lots of homes selling. So, what could possibly be of concern? The issue is not the number of homes selling though, it is which ones that are. As a Broker, my responsibility is to help the Resales. That’s because the large Builders and Developers have huge resources and thus are able to fend for themselves. Not so much for most families trying to sell their home and wanting to move on with their lives. As such, the undertones of my Reports lately have been to bring awareness to the impact of the New Homes.
Our market area is unique to Houston because of the wealth of so many New Homes. So, here I am again, standing on my proverbial “soap box” hoping to help Sellers understand the competition posed by the New; which is formidable. Just look at all the new Developments. Consider, every New Home sold, is one taken from a family trying to Resell their home. And, this is compounded by the fact that Buyers don’t just want just a New home. If so, that would be difficult enough. No, it’s that at this moment in time, the market is witnessing a dramatic change in what Buyers want. FASHION OBSOLESCENCE IS THE PROBLEM and the New homes are delivering the solution. Except for the last year or two, most homes built in the last 10-15 years have a beige color pallet. That’s now out. So too, are the older granites; especially those with bull nose edges. Huge Islands are in, raised Breakfast Bars out. Wood floors are being replaced by ceramic tile that looks like wood. And, the list goes on. As insight, remember long ago when parents had beautiful silver tea sets? Well, polishing up the “silver” (metaphor) doesn’t work any longer, because Buyers don’t want “silver”; polished or not. You can’t even give the sets to your kids. Again, Buyers want (demand) what’s in style today. Yes, normally, Resales area better value, but how much do you have to lower the Sales Price of a home to make it attractive to Buyers that don’t like it?
In short, as Agents, we can’t change the market. We can only do our best to help our Sellers in the market that we are in. Thus, in order for Resale homes to sell reasonably quickly and at a fair market price, Sellers must meet the expectations of the Buyer. Obviously, if they don’t, the Buyer will simply look elsewhere. And, “elsewhere” are the New Homes. Not rewarding news at all, yet not all news is. We understand that this is a difficult time for Sellers, and if you would like to learn more about the market, please call us. We’re here to help!
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.