THE BASICS:
The decreased supply in the real estate markets due to the news media induced panic has increased prices! The statistics are in for the February 2008 sales in the Houston Metropolitan area. While total number of sales have decreased from one year ago (due to the aforementioned media driven panic), the average price of a home in the area has gone up by 5.6% over February 2007. The median home sales price has also rose by 3.1% over February 2007. All in all, this goes to show once again that Houston is an isolated and steady market compared to the rest of the nation. There’s no reason to panic here!
MY ANALYSIS:
Demand to live in Houston has been high for over 15 years. People move to Houston for many reasons; cheap cost of living, for jobs, and for the mild climate to name a few. Houston is host to many oil, engineering and software companies. Each of these industries have been growing for years. These “attractions” toward Houston help to anchor our market steady. So, in short, demand has remained virtually unchanged over the last year.
Supply has been affected. The major influence on supply has been the sub-prime mortgage crisis, which has been blown out of proportion due to the media. The crisis sparked a nation-wide decrease in prices.
With the crisis being a major national topic of discussion and on the news for the past 10 months, it has caused all sellers to believe this is a bad time to sell. Many sellers have put off their plans and decided to wait, due to the scare, and this has caused a drop in the number of home sales over the last year. With steady demand and a decrease in supply, prices rise; as indicated by Supply-Demand theory.
To sum it all up, if you are in the Houston Metro area, you have nothing to worry about. Go ahead and sell that home and make your move. With a reduction in supply and a constant demand, we have seen home prices appreciate here locally, while nation-wide the prices are depreciating.
-Michael
Multi-Million Dollar Producer serving The Woodlands, Spring, and Conroe. Michael has a Broker's License and a Degree in Business and Marketing.
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