At least once a day I am asked, “What’s up in the real estate market”. Well, after forty years in this market, I can tell you that I have to stop and try my best to predict what will happen. I do know what has happened, but still cannot tell you what has driven it to these unprecedented jumps in prices.
This has been the most challenging market for buyers and for their agents. The sellers have had all the power of naming their price, terms, and financing choices. In so many cases, there would be multiple offers many higher than list. Title policies, which traditionally were seller’s expenses became buyer’s if they wanted to win the bid. In a few cases, buyer’s even gave up the option period which meant buying without repair requests.
This trend kept evolving over the past year until listing prices were based on the last highest sale in a neighborhood, then that would be bid up on the phase of homes on the market. It kept going to the point of ridiculous in many cases and put most first time buyers or those needing to borrow large amounts, completely out of the market. Eventually prices rose to more than 30% above what they were selling for a year ago.
In East Shore, the 25 lots offered for sale on a bidding platform, went anywhere from 37%-60% above the starting bid. Resales in Carlton Woods and East Shore, along with other high end areas, netted sellers huge profits from a few years ago.
Now what everyone wants to know is what will happen moving forward. From my prospective as a local expert and with my Corcoran ties across the country and internationally, I see it “softening”. We see listings staying on the market for longer periods of time, price reductions that we haven’t seen much of before, and more inventory to choose from. Add to this rising interest rates and the picture worsens. My initial thoughts and hopes are that we won’t see a “crash”, but that prices will have to level out and most likely dip over the next year not only in The Woodlands, but in most parts of the country.
I would love to hear from you at beth@ferester.com if you have any specific questions about the market or your individual real estate portfolio.
Beth Ferester