Saturday, March 11, 2017 / by Priyanka Johri
Our local real estate market is coming out of the doldrums
Last couple of years I have been talking about how the plunging oil prices, coupled with the over-expectation of what the arrival of the Exxon campus would bring, caused a surplus of homes for sale inventory and a decline in number of homebuyers. The Woodlands and surrounding areas has experienced lower home values and longer market times. In a definite deviation from the national trend, while the rest of the country saw an increase in home prices, we saw a decline; though some of the decline in fact is more to do with price correction in 2015 due to hedging of home values in 2013 and 2014 based on Exxon move.
Between late 2014 to last July, the region lost nearly 25,000 oil production and services jobs and more than 29,000 manufacturing jobs, according to The University of Houston’s Bauer College of Business. A too-high percentage of those jobs lost were from our area.
In the article I wrote then, I encouraged buyers to buy to take advantage of buyer’s market and advised my sellers to “hang in there.” I suggested that mid-2017 would bring a turnaround in oil prices, and with it an influx of jobs. It seems as if my crystal ball was on the job, because the tide is indeed turning! The Woodlands area real estate market is picking back up at a brisk pace. What else is causing this positive trend?
- The votes were cast. Uncertainty about the election is now over. Business owners are expecting that the new presidential administration will include a stronger business-friendly environment; this optimism is making our own business climate more bullish.
- Greater interest. Over the past few years, the Fed has brought us some of the lowest mortgage rates in history. Now, all indications are that interest rates will go up, which is prompting countless buyers who have been sitting on the fence to hop off and start actively buying their homes.
- Upping at the pump. As I pointed out above, oil prices are creeping up and they should continue to do so. The drilling rig count is up more than 50 percent already. The oil companies that survived this generations “bust” are gearing up to “boom” again, and an increase in oil prices means an increase in exploration and production, which means more employees. Our own local O&G powerhouse Anadarko is already hiring at a stronger pace.
- Supply and demand. With these new jobs comes an increased demand for housing. As people from other part of the country move here for these new jobs, they will need office and living spaces to rent and homes to buy. The retail and service industries will likewise go up, which means more jobs in those industries, resulting in a surge in housing demand in our surrounding areas.
- It’s not just the oil. The news from the oil industry isn’t the only good news nowadays. While the energy sector was languishing over the past couple of years, the medical industry was in a slow uptick; while O&G jobs were lost, more than 9,000 medical-related jobs were added in the Houston area last year. Seemingly overnight, The Woodlands has become North Houston’s Medical Center. Memorial Hermann and CHI St. Luke’s are now joined by Houston Methodist and Texas Children’s. MD Anderson has also bought large piece of land to build its own facility. Methodist and Texas Children’s hospitals in particular are hiring at all levels and bringing influx of new residents to the area. You can read a great article about the local healthcare industry at https://communityimpact.com/houston/the-woodlands/healthcare/2016/11/10/woodlands-becoming-health-care-hub/.
What’s the bottom line to all these facts and figures? Simple: if you’ve been waiting for market to hit the bottom, guess what? It has. And now the pendulum is swinging in the other direction and the markets are picking back up. This is the perfect business climate for both home buyers and sellers.
For the people who are moving here, some will go ahead and buy, while some will rent until they explore the area and figure out where they want to live. 2017 and 2018 should see some increased sales from the increase in new employees, although I caution people to not overestimate the impact of the jobs to the extent that originally led to the massive amounts of empty loft-living apartments due to overconfidence in what I called “The Exxon Effect.” But looking around you can see that builders are building new homes with high rollers such as Woodforest and Johnson Development, meaning people will have ample choices, no matter whether they buying a new home or an existing one.
For the people who have been waiting to sell their homes, they should stop waiting and start planning to sell. Right now, I am sitting down with all my clients and strategizing to get the best value for their home. It takes a lot of time, energy and resources to get a home ready for sale, especially when you are competing with new homes. My team is working with our seller clients to enhance curb appeal, staging, repairs, and all the other action plans that ensure our clients’ homes shine when they come on the market. Timing it right is also essential. You don’t want to be too early or too late coming in the market. Long story short, if you want to sell your home this spring or summer, the time to plan your strategy is now.
According to Nobel-winning economist Paul Krugman, “I think if you’ve been sitting on the fence, the Trump election, plus the likelihood of Fed rate increases over the next 15 months, means you should jump off the fence right now.” My advice to all buyers and investors is to take the advantage of today’s buyer’s market before it becomes a seller’s market. I have been able to negotiate some pretty good deals for my clients in last few months and can do the same for you.
For an entire year, I have been telling my seller clients to hold on; their patience is about to be rewarded. I just sent everyone an email to start getting ready to put their homes on the market, and I am scheduling appointments with my seller clients to strategize our marketing to sell their homes quickly and for top dollar. At the end of the days, it all comes down to timing it right.
I’m available and eager to sit down with you and offer a free consulting session. Not only will you receive invaluable information if you’re looking to buy or sell a home, but I’ll also tell you about the extras we provide that make this the smoothest experience possible, including our Free Staging and Curb Appeal services. For more information, call me at 832-277-3577 or visit www.ViewNorthHoustonHomes.com.