50% of the basic economic equation is supply. Too little of it, prices climb, too much, they fall. In the real estate market 6mos is considered “equilibrium” where supply meets demand. When you have too little supply and still increasing demand, you can just about guarantee higher prices. The Houston housing market is seeing this very phenomena currently and has been for some time. April 2015 was a record month for the Houston housing market which beat April 2014, which beat April 2013…etc…etc (see a trend?)
With a current supply of <3mos (this is despite builders racing to bring more homes to market) and demand increasing (total sales up, single family sales up, condo sales up and pending sales up 39%) there are no price declines on the horizon. Now, inventory did rocket up (sarcasm) from 2.7 to 2.9mos and to be honest that is a good thing, the market desperately needs more homes.
As for our HHC , add these dynamics to the equation and then add in 10,000 XOM employees who are going to start moving to the new campus a stones throw from the Woodlands and connected to Bridgland (HHC’s MPC’s) by the new Grand Parkway. Also add in scores of other businesses who are relocating to the area to be closer to XOM. That adds even more demand to the equation for northwest Houston.
Builders are trying to accommodate demand so do not be surprised to see inventory continue to climb. As long as sales are climbing with it, all is well. I’ve long said that I expect the housing market in Houston to recede from 2014’s breakneck pace and at some point it may happen. Oil (USO) went from $100 to $40 and Houston still has a very significant oil complex. To date housing there has barely acknowledged oil’s fall and now has oil has rebounded to the $60 range………maybe the Houston economy is more diversified and even stronger than I gave it credit for…….
