We always enjoy crunching the numbers to see what kind of trends ooze out. Here we’ve tracked eight sets of the market demographics for 2017 River Oaks home sales and purchases. (Like numbers? To read more of this kind of thing, order a copy of our just-released River Oaks Market Report 2018 Outlook.)
Mortgage loans have paid for about 65% of sales in River Oaks in recent years, but that fell to well below 50% in 2017. It wasn’t that more buyers were paying cash – that number hasn’t changed much. We saw more private banking loans and notes from family trusts being used. This was partly a means of side-stepping onerous underwriting requirements that are typical for mortgages these days. An increase in new-construction financing played a part, too.
In 2017 sales of lots between 10,000 square feet and half an acre – with and without houses on them – accounted for 75% of the market. This was in contrast to 2016 when the one acre-plus properties dominated sales. Around 20,000 square feet was the sweet spot in 2017. And while sub-10,000-square-foot lots accounted for only $16 million of sales, far too many of these were to speculative builders.
ORIGIN OF BUYERS
We can’t remember the last time the number-one origin of buyers for River Oaks was not River Oaks itself. It was no different last year, with local River Oaksians taking a larger share than ever before. The adjacent area and the West U/Southampton areas typically follow. Another perennial trend is the rarity of buyers from overseas.
DESTINATION OF SELLERS
Half of sellers choose to stay nearby, either in River Oaks itself or in the adjacent neighborhoods. It was no surprise that the middle-aged sellers in their 40s and 50s mostly moved to another single-family house in River Oaks, and the older ones moved to patio homes and high-rises in the adjacent neighborhoods. The other continuing trend is a significant number of sellers moving to Tanglewood, where the country club and private schools are draws.
For the first time ever, financial professionals, albeit often involved in energy investments, were the number one buyer category. It’s a telling change in the character of the energy sector. Buyers are as likely to work in venture capital, hedge funds or a family investment office as in basic oil and gas exploration, production or distribution.
Real estate investors and professionals are becoming a steady fixture, too.
While energy executives counted for a larger share of sellers in 2017 than we usually see, it would give the wrong impression to say that this was simply a result of the three-year shakeout of energy markets. Many of them were simply moving to something fancier in River Oaks. That said, there was some shaking out in 2017 and more will follow in 2018.
AGE OF BUYERS
Buyers in their 30s, 40s and 50s carved up the market in fairly equal portions. What was new in 2017 was the share taken by the 30-somethings. It neatly mirrors the switch of buyer occupations (see above), conjuring up an image of number-crunching whiz kids claiming their place in the Houston Establishment. It’s a cliché, but pretty accurate all the same.
AGE OF SELLERS
Most of the sellers in their 40s – a quarter of the market – were moving to another house within River Oaks, but scarcely any of the sellers 60 or older stayed in the subdivision. The older sellers moved to the adjacent neighborhood, the West U/Southampton area or Tanglewood or are retiring out of state, in fairly equal proportions.