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2016 Real Estate Forecast

What does 2016 have in store for Houston real estate?

Worried that oil prices will have a drastic impact on Houston real estate this year?
The Houston real estate market managed to resist most of the effects of the energy downturn thus far, with home sales up. Coming off the last few years of an amazing real estate high, you may be worried when you see homes in your neighborhood not being sold in less than a week. However, it is still a sellers market. It’s just that the inventory is slowly increasing. A normal market is 6 months of inventory and anything over that is when the market is considered a buyers market.
Currently we are still at three to four months of inventory, which is allowing buyers more options than they’ve had the past two years. This normalizing market now offers buyers more time and therefore, more negotiating power. today making it a sellers market.

According to February’s monthly report compiled by the Houston Association of Realtors (HAR), single-family home sales rose 2.2 percent this February versus February 2015, with a total of 4,602 sales compared to 4,505 a year earlier. New listings helped inventory grow from a 2.7-months supply to 3.4 months.

“So far in 2016, the Houston housing market has remained healthy despite the ongoing strains facing the energy industry,” said HAR Chairman Mario Arriaga with First Group. “Sales are still down in the luxury home market, but, just as we saw in January, mid-range housing performed well and inventory levels grew. There was also a lot of activity among rental properties.”

Last week, the Greater Houston Partnership (GHP) reported revised Texas Workforce Commission data showing that the Houston metropolitan area gained 15,200 jobs in 2015, not the 23,200 jobs previously estimated. The GHP report also stated that nearly 51,000 jobs were lost in January, a 1.7 percent decline and slightly above what is considered average for that time of year.

Single-family homes priced between $150,000 and $500,000 recorded positive sales volume while the luxury home segment experienced the biggest decline.

If you are considering selling your home to upgrade to the $500,000+ range, this is your year. With the most negotiating power and time than we’ve seen in years, don’t hesitate to start looking for your next home now.

We’ve also started seeing an influx of Millennials interested in moving from inside the loop to Spring Branch and other neighborhoods on the west side of Houston in search of homes with more space and a yard in the $325,000 price range.

For more information on Houston real estate trends, contact us!

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