It is challenging to make astute comments about a real estate market that has been understandably inactive since mid-March. So, suffice it to say that River Oaks is largely in wait-and-see mode. Here are a few general observations based on the data:
River Oaks Inventory
The number of houses for sale in River Oaks has been flat at around 80 since the start of March. With only five properties new to the market in the first half of May (plus an equal number that had been for sale but not on the open market yet), the River Oaks market is still on hold. More problematically, half of the houses for sale are priced higher than $4 million.
River Oaks Pending Contracts
At mid-May there were seven pending contracts in River Oaks, four of which were scheduled to close by the end of this month. Two pending contracts, at the high end of the market, have fallen out post-Covid-19.
River Oaks Sales
Since the local Covid-19 shutdown, there have been only two sales in River Oaks so far that went into contract and have successfully closed. One was at the low end of the market (under $2 million), and one in the $4 million-plus sector that took a whopping 16% hit to asking price.
Showing Activity Across Central Houston
Current showing activity is our best leading indicator of what to expect in the next 60 days. In the River Oaks market the decline has stopped, but activity has hardly rebounded, unlike in the West U/Southampton/Museum market areas. Memorial has seen a resurgence in May, too.
New Construction
We have observed a sudden pick-up of mechanic’s liens on spec builder properties, and some sales at or below break-even point. This indicates the stress of an overhang of inventory and a large number of the new houses having been on the market for too many months post-completion. Lenders are starting to reel in the credit lines.
Conclusion
As activity picks up in Houston, we will have more data to help us understand where our market is heading in 2020. Our twice-a-year print publication the River Oaks Market Report is scheduled to go to the printer in about six weeks. It should make for, uh, interesting reading.
