April Showers

Let’s get something cleared up right away: It is always quiet in River Oaks in the first two weeks of April.

We have theorized in the past that rich people just get grumpy ahead of Tax Day, whether or not they actually file and pay their taxes in mid-April. And grumpiness is not conducive to buying property if you don’t really have to do it.

Discretionary real estate purchases characterize the River Oaks market, for which mood controls the on/off and volume buttons. Right now, it feels like OFF.

But switch your focus to, say, the West University Place market, especially that heated $2 million or less price range, and you would be forgiven for thinking that the entire real estate market is ON FIRE, NOW. It has felt relentlessly incendiary since early 2021.

Of course, in that market, mood has nothing to do with it, unless it’s the very bad mood you’re in because you are about to give birth to a third child and your spouse has not been reckless enough to throw your life savings into a bidding war for a mediocre four-bedroom house close to the elementary school.

Motivations for buying and selling in school- and kiddie sports-centric neighborhoods in Houston – e.g. West U, Bellaire and the Memorial Villages – are narrowly focused on amenities, schools and extra-curricular activities for the children.

While there are plenty of four-bedroom houses in River Oaks, and some of the people who live there do care about sports and the proximity of schools, it’s not typically why they buy houses there. People buy houses in River Oaks because it’s the pinnacle of real estate in Houston.

And, right now, buyers with the means to make a purchase in River Oaks are not feeling ebullient. Come to think of it, some of the sellers seem pretty grumpy, too.

But let’s look at the numbers:

The most unhelpful headline cliché of our current market is that inventory is low. Indeed it is, but there’s more to the picture in River Oaks.

Note how more than half of the houses for sale in River Oaks are priced at $4 million or more. For that matter, 40% of them are priced at $6 million-plus. So, if you happen to be in that market, there’s a lot of inventory to choose from. Just not quite what buyers are actually looking for.

The lower inventory numbers that concern those buyers more focused on the sub-$6-million market disguise the fact that houses priced in the more affordable sectors of the River Oaks enter the market and are briskly sold. Inventory may be low, but turnover is strong.

Granted, 2023 started out with a sputtering pace, but it was much about mood again: Bank failures and stock market indices certainly affect confidence, but with the staggering levels of wealth evidently circling this special part of Houston, we are confidently concluding that the River Oaks market is only on PAUSE.

The animal spirits will release again come May.