December was a great month for all of us to take a break from the bidding wars to buy homes and the desperate hunt for a home for our buyers in a dwindling inventory market.
The article in the Houston Agent Market confirmed my predictions for December—both buyer traffic and new listings declined in the month of December as people took a break for the holidays. With Omicron hanging over our heads as we went into the holidays, that holiday lull was greater than expected as buyer traffic dropped 12.5% from 2020 and new listing traffic dropped 10%, according to the Houston Agent Magazine.
Let’s face it though—we all needed the break! 2021 was a record year for home sales and leases, and definitely a record year for Energy Realty! While the seller’s market was very appealing for sellers, buyers struggled to find homes in one of the lowest inventory markets Houston has ever seen, and in most cases, buyers were forced to overpay for homes. I work closely with some of my agents, and it was a common theme to hear their buyers offering up to 10% above a list price (this should be the market value) AND signing appraisal waivers.
Buyers overpaid for homes in 2021, pushing values in the suburbs like Katy up 20%! We have not seen this kind of appreciation since 2013 and 2014, and this kind of appreciation is usually unheard of in Houston.
The Energy Corridor market came to life in 2021 as oil prices headed to values higher than we have seen since 2014, but the appreciation and demand in this market have still not reached the demand of the Katy market. With the price of oil lingering in the $80’s, we should see the Energy Corridor continue to rebound in 2022.
What is happening in the inner city? The appeal of townhomes and inner-city living with less space and more people took a hit since COVID but seemed to come to life towards the end of 2021. Let’s see if Omicron slows that market down again, or if buyers once again move towards the appeal of the urban lifestyle.
It is still too early to predict 2022, but January has kicked off with a bang! Energy Realty re-opened our office after a short holiday break on January 3, and I feel like someone rang the bell and we are off to the races!
by Sherry Campbell