This month let’s look at the overall River Oaks market and how activity in the various price ranges compares.
By mid-April 2016, inventory levels have crept up to a new critical level. While there is nothing unusual about 12 months or more of inventory at this time of year (as measured by the number of houses on the market divided by sales so far this year), what is different is that the pace of inventory growth is well ahead of sales.
The picture could quickly be reversed. In mid-April there were nine River Oaks properties under contract, with six of those scheduled to close within the month. However, without question, the level of new contract activity has lagged behind recent years. We are experiencing a situation where, despite an abundance of qualified demand at all levels of the market, there continues to be tangible hesitation among buyers.
Let’s break the River Oaks market down into three segments:
THE MARKET PRICED BELOW $2 MILLION
Inventory remains low at the entry level of the market, and much of that is not particularly appealing. This has held back sales. Even for the more attractive offerings buyers are showing no hurry to jump in.
THE MARKET PRICED BETWEEN $2 MILLION AND $4 MILLION
This is the sector in which inventory growth has been the strongest, probably lured out by bumper sales numbers in 2015. Sales, however, have been unimpressive in the first quarter of 2016.
THE MARKET PRICED ABOVE $4 MILLION
What we call the high end of the market has been the bright spot of 2016. Far more houses have sold in this sector than in any previous year. However, one should note that all but one of those sales has been at the lower end of this sector.
It is encouraging to see that viewing activity in all the central Houston markets for houses priced above $1 million has shot up since mid-March. This might be an indication that some confidence is returning to the market. Most of the viewing activity has been for houses priced between $1 million and $2 million. If that confidence translates into buyers parting with their savings before the summer, we may see another strong year, even after such a tepid start. After all, life must go on.