It may come as a surprise to buyers today who are angling for a house in River Oaks at a civilized price-point (they are hard to come by), that — breaking news! — the River Oaks real estate market peaked in February 2021. That is not a typo.
If you’re getting your real estate news from cable TV you could be forgiven for thinking that we are currently at peak real estate everywhere in the United States, especially in coastal markets plus Austin, of course. And that there’s no end in sight.
In this month’s edition of The River Oaks Letter, we have a dizzying array of data, graphs that are not necessarily easy on the eye. But, hopefully, some insights for our readers.
Let’s get the stats out of the way, in the correct order:
- Peak inventory – February 2021
- Peak showing activity – May 2021 (okay, we’ll explain that below)
- Peak newly pending contracts – February 2021
- Peak sales closed – March 2021 (that makes sense)
And taking a closer look at each category, we can see that inventory (the real driver of real estate activity in River Oaks) was at a high point in February 2021, and has been a bit top-heavy in recent years — and it continues to be. Thankfully, there were a good number of heavy-hitters on hand to purchase it in the first few months of 2021. Less so lately.
The mid-sector of the market — properties priced between $2 and $4 million — had good levels of inventory in early 2021, but is now desperately seeking supply. It has lately been the strongest-performing part of the River Oaks market.
In the under-$2 million market, that seemed to have completely disappeared not so long ago, sales have been punching above their weight when compared with their share of inventory. That’s because the speculative builders are no longer significant in this market sector, having moved on to bigger things. So much the better for the health of the neighborhood, in real estate terms. A healthy subdivision needs younger and, relatively-speaking, less affluent buyers to remain healthy.
Showing activity is necessarily an expression of available inventory (what there is to look at) and buyer interest (demand at any specific time), and it is a slippery creature. One can often only gauge its significance in any given month if one is actually physically observing who is looking at what.
Showing activity did not peak in February 2021. In fact, many of the buyers who wrote contracts in that month had been scoping out the intended properties in the fall of 2020.
The extraordinary peak of showing appointments was in May 2021 (see our May 2021 edition of The River Oaks Letter). It was clearly a case of “let’s get out there and look at houses before it’s too late, Dear.”
Pending contracts in February 2021 were broad-based and at record-breaking levels.
Note how the middle-market has taken prominence of late.
In terms of sales closed, March 2021 was a record-high (and we’re just talking houses sales here) and the amount of money spent on them. Add in the dollar value of lot purchases, and the number is out of the ballpark.
Let’s not pooh-pooh the sales numbers for March of 2022, which were very respectable. But $50 million in 2022 compared to 2021’s $70 million? Money talks.