Katy Edition | July 2022

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According to the National Association of Realtors, six months of housing supply is associated with moderate price appreciation, while fewer months’ supply pushes prices up faster. While local inventory is still historically low, July data shows an uptick—indicating a transition to a more balanced market, according to local Realtors. TRANSITIONING MARKET North Katy Southwest Katy Southeast Katy MONTHS OF INVENTORY KATY AREA

over the last two years and that is due to supply and demand issues.” Though RE/MAX broker Charlie Russo, who works primarily in the West Houston and Katy area, antici- pates prices will begin to steady, data from Texas A&M University’s Texas Real Estate Research Center shows the housing market has grown more expensive in the Katy area over the last year with the average price of single-family homes rising 27%-32% between April 2021 and April 2022, depending on the area of Katy. Texas Real Estate Research Center data shows the Katy area’s housing inventory remains at around the low- est it has been since 2015 with a 0.5- to 0.7-month supply within the areas of Katy in 2022. Russo said when housing inventory sinks below three months in the Katy area, it represents a “hyper-seller’s market.” Katy’s low inventory goes hand in hand with rising home costs, Wauhob said. According to data from the Texas Real Estate Research Center, in the Katy-area north of Katy Freeway, the average single-family housing price grew from $257,505 in May 2021 to $322,759 this May. The Katy-area southeast of Grand Parkway saw the average home price increase from $394,883 to $475,630 in the same time frame. And in the Katy-area south- west of Grand Parkway, the average home price grew from $450,121 in May 2021 to $582,588 this May. Homebuyer demand in the area, however, remains strong, experts said—especially within certain Ful- shear and Katy-area neighborhoods, such as the Sunterra, Cross Creek West and Tamarron master-planned communities, which will add more than 15,000 new homes between the three developments by 2031.

Coventry Homes Regional Presi- dent Paul Blackburn said the company favors building homesites in the Katy communities of Cane Island and Fire- thorne, citing the stability and pro- jected growth of the master-planned community market. “If there’s ever going to be a kind of softening of the market, the mas- ter-planned communities will con- tinue to sell,” he said. Rising rates Low housing inventory and high demand present extra hurdles for potential homebuyers, and some have either been unable or unwilling to win a bidding war, experts said. Others have simply been priced out. “From 2017 through 2022, we have had historically low interest rates,” Russo said. “Then all of a sudden, rates have started to increase. [In coming months] we are going to see sales falling down. The prices aren’t pulling back, even though interest rates are going up.” The national 30-year xed-rate mortgage hit 5.3% on July 7, according to the Federal Home Loan Mortgage Corp., known as Freddie Mac. While that rate is still low compared to his- toric numbers, rates have gone up almost 3% since January 2021, when the rate hit 2.65%. That means at a 5.3% 30-year xed mortgage rate and a home price of $475,630, a homeowner with a 20% down payment would need to pay $2,113 per month on their mortgage, according to nancial technology company Smartasset.com’s mortgage calculator. In January 2021, that same homeowner would have needed to pay $1,533 per month on their mortgage. Meanwhile, the demand for sin- gle-family rentals across the Greater

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SOURCES: TEXAS REAL ESTATE RESEARCH CENTERCOMMUNITY IMPACT NEWSPAPER

Houston area reects that growing homebuying hesitation. A June 15 report from the HAR showed a near 25% increase in single-family home leases in May compared to May 2021. A 2022 Consumer Sentiment and Home Aordability Survey from the HAR released in May revealed of 600 survey respondents across the Greater Houston area, 79% of those who stopped searching for a home said they did so because they were priced out of the market, while 62% stopped searching because there was not enough inventory. This comes as the HAR reported the median monthly price for sin- gle-family rentals in the Houston area

went up 8.1% year over year to $2,000 per month. Investment rms have also—in the last two years—increasingly been buying land and properties to rent instead of sell, according to property data from the Harris County Appraisal District. As of June, nearly 7,000 homes in Harris County are owned by the same ve National Rental Home Council members and their subsid- iaries: American Homes 4 Rent; First- Key Homes, whose parent company is Cerberus Capital Management; Prog- ress Residential; Invitation Homes; and Tricon Residential. Additionally, build-to-rent com- munities—or new single-family rental

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