What Will Happen in the 2017 Houston Real Estate Market?

Houston Real Estate Podcast with Mike Gray

What will happen in the 2017 real estate market? I’ll go over my predictions today, as well as a few important numbers from the 2016 market.

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What will happen in the 2017 real estate market? First, we have to take a quick look back at 2016 to see where we’re coming from in order to understand where we’re going.

2016 was a record year, which many people find hard to believe. However, if you look at the total number of homes sold, that number jumped up from 77,595 in 2015 to 79,126 in 2016.

When you break that number down, though, 72,058 of those 79,126 home sales were in the $500,000 and under price range. That price range saw a 2.69% increase in sales from 2015.

Every other price range saw decreases in home sales. For instance, home sales in the $500,000 to $749,999 range dropped by 3.88%. Home sales in the $750,000 to $999,999 range dropped by 8.92%, and home sales over $1 million dropped by 3.95%. As a result, a lot of people don’t feel like last year was a record year, even though it technically was.

This year, I predict that we can expect even more home sales under $500,000. Experts predict that our area will see anywhere from 30,000 to 50,000 new jobs. Plus, more entry level buyers will be coming into the market, causing builders to make a push to get that product on the ground.

We are optimistic about the 2017 market.

Unfortunately, I predict that higher-end homes will continue to move a bit slower than the $500,000 and under market. Overall, our market will see a fairly steady incline.

What Houston really needs is $60 oil. That’s when building really kicks in. If you look at the last 30 years, the sweet spot for building has been between $55 and $85. When oil gets above that $85 mark, it’s counterproductive for builders. Why? If gas costs consumers $4 a gallon, they are going to be more cautious about making big purchases.

We are optimistic about 2017. There are two major factors that you should keep an eye on, though. One is that there will be a change in regulation thanks to the new administration. The other is that interest rates will go up. Last June, rates were at 3.5% and now they are at 4.125%. Rates are expected to increase three more times this year. These two factors will really drive the market.

If you have any other questions about the 2017 market, give us a call or send us an email. We would be happy to help you!