Obviously, it has been quite a dramatic couple of weeks in Houston and around the world. Covid-19, or Coronavirus, is all anyone wants to talk about and that is no less true in real estate. Any market or societal disruption of this size is going to have a huge impact on the local real estate market and Houston has not been immune. Here's a quick update on where the local real estate market stands today.
First, it is very difficult to track the real estate market in the short term. Real estate is a slow-moving industry. It isn't like the stock market where we can track it second by second. If a home goes under contract today, that contract usually doesn't close for 30 to 45 days. That being the case, there are two metrics that we can follow over the short term to discover the impact of our response to Covid-19: Pending Sales and Showings.
"Pending sales" is probably our best metric to judge the near term trends in the local market. Over the past couple of weeks, we have been following these numbers very closely. Although Covid-19 has had a downward impact, it hasn't been as large as we had originally thought it might. In Harris County specifically, pending sales have fallen about 10% week over week as of March 23rd. This is certainly a fall, but really just a rollback to the numbers we were seeing in a very good January and February of this year.
According to ShowingTime, one of the largest showing service in the United States, the 7-day moving average for showings ending today is down 30% in the state of Texas. Since the stay home, safe work ordinance announced on March 24th, we anticipate these numbers will continue to slow through the April 3rd expiration of that ordinance. Based on our own anecdotal conversations with home buyers, we think this number is going to come back in a big way once the ordinance is lifted. Many home shoppers appear to be anxious to resume their home search.
So what's next? What can we expect after things start to get back to normal? Until our response to containing the virus began a couple of weeks ago, the Houston Real Estate market was on track to have a very good year. Home sales, home prices, and sales volume were all up on the year. At this time, we fully expect to have a lot of pent up demand and activity after we re-establish our freedom of movement. Although mortgage rates are slightly up since they reached all-time lows a couple of weeks ago, they are still historically low and the Federal Reserve has a lot of incentive to help keep them low for the foreseeable future. For home sellers that are ready to list, we would recommend evaluating your options
Over the longer term, there has been a lot of talk about recession. It may be counter-intuitive, but a recession doesn't necessarily mean a downturn in home prices. In fact, according to ATTOM data solutions, 3 out of the 5 recessions have seen an increase in home prices. Now every economic circumstance is different and this one certainly is unique. Although the outlook is muddled, it doesn't mean that it is dire.
If you were considering buying or selling a home in 2020, we would recommend that you enlist the advice of a local professional that serves your specific market. Every market will be impacted differently during uncertain times and there is never a one size fits all model in real estate. The solution that best fits your cousin in New York City is not necessarily the best one for you down here in H-Town. Or for that matter, the solution that best fits a home seller in Sugar Land is not necessarily the best one that fits a home seller in the Heights.
If you would like to talk to an agent about your specific situation, Feel free to give us a call at 713-869-5700 or fill out the form below and we will match you with an agent.
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