Demographics are a fascinating study, and we always find it satisfying to crunch the data we collect on River Oaks homebuyers and sellers. Some of the results, shown in the pie graphs below, help us to chart the changes in the neighborhood. We run through this exercise every six months and publish our findings in the twice-yearly River Oaks Market Report. Here’s a sneak peek at what will be in the ROMR 2019 Outlook, which drops in the mail this week.
In 2017, mortgage loans accounted for 44 percent of financing in the River Oaks market, so we’ve seen an uptick in that method to 53 percent year over year. (Trending: Several area lenders offer special mortgage deals for doctors.) Meanwhile, cash purchases have dropped from 31 percent in 2017 to 25 percent in 2018, the percentage of construction loans has gone up (from 15 percent to 20 percent) and trust fund money has declined (9 percent to 2 percent).
All four lot sizes that we track have seen significant increases in total dollar volume. As was true last year, sales of lots between 10,000 square feet and half an acre – with and without houses on them – accounted for the great majority of the market. Of special interest are the largest lots, those that are one acre or bigger. The 2018 sales volume of $48 million was an impressive jump over 2017’s $29 million … but still falls far short of 2016’s astounding $72 million.
Origin of Buyers
While we typically see the majority of River Oaks buyers coming from the neighborhood itself, in 2018 that has shifted to people from adjacent neighborhoods, increasing from 19 percent in 2017 to 28 percent in 2018. The other side of that seesaw is River Oaks-based buyers dropping from 38 percent in 2017 to 26 percent in 2018. We also saw fewer buyers from West U last year: Many are choosing to stay south of Highway 59, put off by River Oaks expense.
Destination of Sellers
Are property taxes too high? Or is maintenance of a large property the issue? Perhaps both are true, as the destination for many sellers last year was not another house in River Oaks. Consider that in 2017, 30 percent of River Oaks sellers bought another home in the neighborhood; this year just 23 percent did so. We continue to observe many older sellers downsizing to patio homes and high-rises in adjacent areas – from 19 percent in 2017 to 41 percent in 2018.
Energy executives were number one once again after ceding that spot to financial professionals in 2017. We’ve also seen a surge in medical professionals, predominantly in the business of medicine (as opposed to physicians). It was 10 percent in both 2016 and 2017, up to 15 percent in 2018. The category showing the most significant decline in the buyer occupations was real estate, which was down from 19 percent in 2017 to 9 percent.
Is Houston an oil town or what? The most common occupation among River Oaks sellers last year was energy, as was true of buyers’ occupations. However, it’s worth noting that the percentage of energy executive sellers – 31 percent – was lower than in 2017 (40 percent) or 2016 (37 percent). Do we have steadier oil prices to thank for that? Meanwhile, 21 percent of sellers were attorneys, up from both 2017 (16 percent) and 2016 (11 percent).
Age of Buyers
Once again buyers in their 30s, 40s and 50s accounted for nearly three-quarters of River Oaks transactions. These young(-ish) buyers are spread across the price spectrum, not limited to entry-level homes. There was also a slight uptick of buyers in their 20s, all children of current River Oaks residents. And, curiously enough, there was boomlet in buyers in their 70s: 10 percent last year versus 2 percent in 2017 and 5 percent in 2016.
Age of Sellers
It’s no surprise that the majority of River Oaks sellers are in their 50s, 60s and 70s. They have raised their families and are often ready for a simpler lock-and-leave lifestyle in a neighborhood close by. What we did find remarkable in last year’s stats was so few sellers in their 40s. That figure was 25 percent in both 2017 and 2016, but last year dropped to 14 percent. We anticipate that the 40-somethings will be here for the long run.