If there was one main takeaway from our last River Oaks Market Report ~ 2021 Outlook it was that market momentum barely stopped over the holidays and into January. No kidding!
Take a look at the level of pending contracts since the start of the year, compared with the same (pre-COVID) months in 2020, which at the time we considered a fast start.
Here’s another way of looking at the same data (graph below), but also comparing it with 2019 as well as 2020. We are barely halfway through February and still way ahead of previous years.
How to explain it? It’s partly pent-up demand from a delayed seasonal cycle due to COVID in the second quarter of 2020. It is also an expression of a new attitude toward home and hearth on the part of buyers in River Oaks, just as much as in other markets. The comfort and safety of the home has become a priority once again, and that emotional motivation is expressing itself at all levels of the River Oaks market.
For now, at least, long getaway vacations are not appealing, nor are second and third homes as important or attractive as they were even a year ago. Home base is paramount. Lifestyle balance has changed.
Don’t get me wrong, there are many people getting away from the large metropolitan markets to settle in resort communities (the press is full of stories of wealthy folk fleeing New York to Florida, Los Angeles to Aspen, and San Francisco to Austin). There have even been early signs of a potential Houston land rush on the part of big-city Californians — not that we have yet seen that translate into sales in River Oaks.
But for those who need to live in Houston, be it for family, employment or tax purposes, they are being decisive and putting down the cash. High levels of inventory are helping by providing the fuel for the market.
Each market sector is showing signs of ongoing coalescence, which is a striking change from the listlessness we regularly saw drifting in and out of the market in recent years.
What might be perplexing for some, especially sellers, is the lull of showing activity in recent months. From mid-September through the end of December 2020 that activity dropped off significantly, and yet the pending contracts have been going through the roof.
The new year has seen a modest pickup of showings*, and yet the contracts continue to be briskly consummated. Explanation: Many of the new contracts in River Oaks in recent weeks have been for properties that have been for sale for up to a year, or even more. The buyers had viewed so many of these now-pending properties months ago and have finally taken the next step by writing an acceptable offer. That’s what we mean by market coalescence, and we expect that to continue in the coming months of 2021 (nasty surprises notwithstanding).
*Sharp-eyed readers will observe the showing activity for the $2 million-plus market in Memorial shooting up in the graph above. Suffice it to say that most of that activity is centered around the low range, close to $2 million. It appears that the race for places in Spring Branch ISD schools is off to an early start.