As we head into the last month of the second quarter, the real estate market
remains unpredictable because of the uncertainty of what the Feds will do about interest
rates.

On a positive note, inventory levels are increasing, which is great news for
buyers. According to HAR, the inventory of homes for sale in April 2024 compared to
April 2023 has risen by over 30%! Houston is on the verge of becoming more of a
balanced market, although this is not true in some of the suburbs like Katy, which still
has only a 2.2 month’s supply of inventory. Katy remains a Seller’s market as we head
into the summer months.

The Energy Corridor and Memorial markets also remain a seller’s market with 3
month’s supply of inventory.

At the beginning of the year, economist predicted that we would see interest
rates drop to 6% by the third quarter, but with the latest reports indicating that inflation is
still above the Fed’s target rate, a drop in interest rates is still not in the forecast so we
ended the month of May with the average interest rate on a 30-year mortgage at 7.22%.
This is not great news as we head into the heat of the Summer in Houston because
many buyers may choose to hold off their plans to buy a house this year until interest
rates drop below 7% again.

Although we are selling homes like crazy at Energy Realty, we have started to
feel the affects of the unpredictable interest rates on the average days it takes to sell a
home. The multiple offers seem to be cooling off, and buyers appear to be taking a
more cautious approach to home buying. Sellers can expect to see buyers become
more hesitant to “overpay” for homes and start looking for homes that are fully
renovated if they are to pay top dollar.

Remember at the beginning of the year I predicted that we would sell most of our
homes from January -June because we are in an election year? The game changer will
be if interest rates drop below 6.5%. Buyers that have been sitting on the fence may
make a move as soon as rates drop. The question is when and if that will happen in the
third quarter of 2024.

There are lots of unknowns this year, but Energy Realty agents will be trained to
guide our clients in any market, whether you are looking to buy or sell a home.