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With a cost of living below the national average and a strong local job market, Houston offers the best of both worlds, attracting people who seek both big-city amenities and affordability. But here, as in many cities nationwide, the housing market is somewhat in flux as calendars roll into 2023.
On the one hand, the pace of sales is slowing and the number of days on the market rising in the latter half of 2022, as higher mortgage rates put many potential homebuyers on pause. On the other, single-family home prices remain relatively high and inventory tight, especially in the more desirable neighborhoods.
Houston real estate market trends
As they have since mid-2021, median single-family home prices remain above $300,000 in the Houston metropolitan area, according to the Houston Association of Realtors (HAR), and the average price of a single-family home is just over $400,000, as of October 2022.
However, homes currently spend well over a month on the market, averaging 43 days in October, and inventory is higher than at any point since July 2020. As more homes linger on the market, prices will likely stabilize, shifting somewhat in favor of buyers — as long as their budgets can accommodate the price tags and current mortgage rates.
Despite this sea change, sellers are still at an advantage. However, they are no longer likely to see the record-setting prices they could have expected earlier this year.
Houston housing market predictions
Things are slowing down in Houston — but in a good way, real estate pros insist. “The Houston housing market is heading towards more balanced conditions,” said HAR Chair Jennifer Wauhob in an October statement that discussed the softening real estate scene. True, the “years of unprecedented growth” are apparently over, and higher mortgage rates are dampening demand for now. But she felt confident that “as prices level off and inventory grows, we’re going to see more consumers move from the sidelines to the marketplace.”
Is the Houston housing market going to crash?
Investors, house-hunters and homeowners may wonder if a housing market crash is on the horizon in Houston. In short, the answer on everyone’s lips seems to be “no.” Though 30-year mortgage interest rates are higher than they have been in years, loan balances are not outpacing the value of homes here. And, while robust, the Houston market has not spiraled as dramatically as other metro areas have and so is less likely to go into freefall.
Though mortgage rates rose through 2022, so did inflation across other sectors of the economy. Plus, the city has strong employment numbers. Houston will not likely see a violent pop to its housing bubble in 2023 — though it might shrivel a bit.
Should I buy or sell a house now in Houston?
There are pros and cons to purchasing a home in the current market, just as there are pros and cons to selling. Right now, inventory in the Houston metropolitan area is on the rise — so buyers may benefit from hanging tight and waiting for more properties to be listed. Not only will this impact the selection of homes, but it may also level off list prices as the market becomes more competitive.
At the same time, there is a benefit to buying sooner rather than later. Buyers who take the leap can begin building equity with each mortgage payment, a valuable investment — especially since local rental prices continue to skew high.
For those looking to list their homes, inventory in the Houston area is expanding but still tight: at a 2.8 months’ supply, there remains a limited number of listings versus demand. So if you’re thinking of unloading, now might well be the time to move, while the balance remains in your favor.
Finding a trusted real estate agent in Houston
Once you decide to buy or sell a home in the Houston area, it is wise to enlist the help of a seasoned real estate agent. Realtors are members of a national, venerable trade group, the National Association of Realtors, and abide by a code of ethics that guides their professional conduct.
With more than 1.5 million Realtors practicing in the United States, choosing someone to work with can be overwhelming. First, consider asking friends, family, and colleagues for local recommendations. Then interview several professionals before deciding whom to work with. Since the Greater Houston area is quite large and varied, it’s important to find someone who’s not only licensed, but local — especially if you’re relocating from out of state — and a specialist in particular neighborhoods suited to your familial and financial needs.