With Thanksgiving out of the way one might assume it would be appropriate seasonal behavior to wind real estate business down for December and jump ahead to thinking about the new year. Nothing could be further from the truth for those of us working in the River Oaks market.

In past years, especially before 2008, December was commonly one of the busiest months of the year for closings. And while there are eight River Oaks properties scheduled to close before the end of 2016, we have also seen the same number of properties being withdrawn from the market in recent weeks.

Arguably, what we need is more inventory, not less. Looking at the graph for inventory at all price levels below, one might think that that inventory is adequate, if not plentiful. The problem is that most of the available houses are in the wrong price range.

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Not that there is anything wrong with having all these high-priced properties for sale (see graph below inventory over $4 million). They sell eventually, albeit after a slow dance. They’re just not subject to the usual push-and-pull of market forces. Right now, we have a greater inventory of houses at the top of the market than ever before.

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What would be a blessing in this market is more houses at the entry level – that is, priced below $2 million. There is strong demand for less-expensive houses from eager younger buyers from the surrounding neighborhoods trying to get a foothold in River Oaks, as well as from downsizing empty-nesters who want to stay in the area. There’s just not much to choose from (see graph below for inventory under $2 million). This is a price-sensitive sector, so the sky is not the limit. Fair pricing results in quick sales. Overpriced properties will languish.

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The mid-sector of the market could also use some fresh stock (see graph below for inventory priced between $2 and $4 million), especially for houses in fine condition and in good locations priced at around $3 million. Newcomers to the market at this price-point would be greeted by qualified buyer interest from within the neighborhood, many with cash for a quick close, thereby freeing up more inventory at the entry-level.

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Earlier in November we attended the C. T. Bauer College of Business Institute for Regional Forecasting Fall Symposium with Dr. Bill Gilmer. As you are no doubt aware, this is no Pollyanna outfit. However, the forecast was very positive for a sustainable recovery in oil markets in 2017 (as measured by the number of working rigs in the US), perhaps as early as the start of the new year. Since the summer break, so many buyers – who are often would-be sellers, too – have been cautiously holding back. It is time to move forward.

One of the least understood and most defining qualities of the River Oaks real estate market is that it is supply-driven. So, please, bring it on.

Here’s an update on local real estate activity:

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