Cy-Fair Edition | July 2022

2022 REAL ESTATE EDITION

HOW CY-FAIR COMPARES

A smaller segment of the population of Cypress can aord a home in the current market compared to the state and national average.

median home price of $368,200, o- cials from HAR said about 47% of res- idents in the Greater Houston region could aord the metro’s median home price of $330,800. “We do have inventory that is below that, so don’t just assume that you’re one of those 53% who can’t qualify based on your income,” HAR Chair Jennifer Wauhob said. While the entry-level price point in northwest Houston was previ- ously about $150,000, now it is any- thing under $300,000, Hall said. Of the homes sold in Cy-Fair this April, about 38% were more than $300,000. Less than 2% sold for under $150,000, according to data from The Baker Foreman Team. Local prices seem more aordable, however, to clients moving from states where housing is more expen- sive, such as California, New York and Michigan, Hall said. “Aordability is denitely becom- ing a problem, but then we’ve got this inux of people coming in from out of town, … our prices look great to them,” she said. While homes in the Houston region may seem out of reach for many of its residents, Dean agreed Houston maintains its status as aordable when compared to other major met- ros across the state and the U.S. “It is less aordable here than it used to be, but still relative to other housing markets, it is aordable. This market just used to be an amazingly aordable market, and it’s not quite that anymore,” Dean said. Hunter Marrow and George Wiebe contributed to this report.

Median home price

Minimum qualifying household income

Aordability index

Year-over-year income requirement increase

United States $74,400 $368,200

Jersey Village $97,200 $375,000

Cypress

$103,200 $395,000

45%

3O%

33%

26.5%

25.9%

52.8%

Katy

Texas

Tomball

$115,600 $450,000

$73,200 $328,990

$76,800 $337,500

26%

45%

42%

29.8%

17.8%

38.9%

Houston

Spring

Harris County $78,400 $315,000

$74,400 $368,200

$61,600 $245,000

41%

38%

52%

24.8%

17.5%

29.4%

SOURCE: HOUSTON ASSOCIATION OF REALTORSCOMMUNITY IMPACT NEWSPAPER

Interest rate eects

since the organization began tracking months of inventory at the submarket level in 2015. “It’s going to take a hot second to even build up enough inventory to sat- isfy all the buyers that are [looking],” Hall said. “When you do have 20 oers for every one house, you’ve got 19 buy- ers that are still looking for houses.” Following the Great Recession in 2007-09, housing prices only slightly increased from year to year for about a decade. However, Hall said houses gain about 4% value per year, so the prices buyers see today are more in line with what they would have been if not for the Great Recession. “While we may see that houses are not going to keep appreciating in the volume that they are right now, 10% and 20% year over year, it’s going to slow back down to 4%, but it’s not going to severely dip,” Hall said. “It’s not going to go back to normal.” Master-planned communities Bridgeland, Marvida and Avalon at Cypress are expected to add the most single-family homes to Cypress in the next decade at 3,478, 2,588 and 1,684, respectively, according to PASA.

would be extremely more favorable for buyers than anything buyers have experienced in two years at this rate,” he said. “So I wouldn’t be surprised if that kind of evolves over the balance of this year, just as increased inter- est rates do kind of what the federal government intended for them to do, which is slow down a frothy, hot econ- omy and drop the hot housing market and related pricing.” Aordability concerns As housing prices and interest rates continue to rise, experts said fewer people could be able to aord homes. Hall said many rst-time homebuyers are not able to compete with prices on the market at this time. According to HAR’s Housing Aord- ability Index, only 30% of Cypress households earn the minimum quali- fying income of $103,200 to aord the median home price of $395,000. This minimum qualifying income rose about 25.9% in just one year, similar to the national increase of 26.5%. While HAR reports the Cypress and Jersey Village submarkets have higher median home prices than the national

The Houston metro’s median sin- gle-family home value rose 16% from May 2021 to May 2022 and is now the highest on record at $351,000 despite fewer sales year over year, accord- ing to HAR. Rising interest rates are expected to be a large cause of declin- ing property sales. Dean said those who have purchased homes in the past two years were able to aord higher prices because inter- est rates dropped to historic lows. Monthly housing costs were about the same as they would have been histor- ically for a less expensive home at a higher interest rate, he said. However, since the start of the year, interest rates have been trend- ing up again and are now even higher than they were before the pandemic. According to Freddie Mac, the U.S. average 30-year xed-rate mortgage was 3.11% at the end of 2021 and rose to 5.78% by mid-June. Dean said this trend could contrib- ute to a pivot to a more balanced mar- ket in the coming months. “Even just being a balanced market

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CYFAIR EDITION • JULY 2022