No one in Houston has been unaffected by the COVID-19 crisis that is playing out. And the scary medical/social-distancing circumstances have been compounded by free-fall oil prices and stock market. For many clients contemplating the largest purchase of their lifetime, this is a daunting situation.
As of mid-March, most business that was in the pipeline has remained in the pipeline. Sales continue to close as scheduled; some title companies are even offering the option to close remotely. On the other hand, we have seen a few houses withdrawn from the market and fewer new listings.
One of the best real estate market indicators is showing activity. The chart below shows relative showing activity in the four main central Houston market areas for properties priced higher than $1 million over the past three years. It allows us to examine seasonal patterns, or deviations from those patterns, and to see the variations of showing activity between the market areas.
Right now, at mid-March and as the Covid-19 crisis begins to affect residential real estate business protocols in Houston, we note the following:
- The Tanglewood area has been in the doldrums for more than a year. At a time of year when we would expect at least a small uptick of showing activity, showing numbers are down from February 2020.
- The River Oaks area usually sees a slow start to the new year, after which showing activity picks up in the last week of January and keeps going until tax day, followed by a boost in May. So far in 2020 it started busy in January (already a signal that things may be different this year) and has been in decline since.
- Memorial, too, was unusually quick to get started. Showing activity spiked in February (May would be more typical) and has seen a quick decline through mid-March.
- But look at the West University Place area, which includes Southampton, the Museum Area, Southgate and Bellaire. As the graph shows, 2020 looks like a perfectly normal Spring selling season. The explanation? Perhaps it’s a combination of good inventory in that sweet spot priced between $1 million and $1.5 million, families jockeying for position in schools and the dependably regular churn in this market area that is driven by employment/income/moving up in the world.
We will have more data to share in the coming weeks and months.