The Old and the New

We’ve dusted off this old graph from mid-2021.

Regular readers will recall that we used it in August 2021 to explain why sales in that year were occurring at twice the typical rate and what that meant for the market for the final months of 2021, as well as the outlook for 2022

Well, 2021 did finish out with record-breaking numbers for River Oaks. Sales were up by almost 100%.

That pace was clearly not sustainable, and we were concerned that 2021’s feverish activity would cannibalize sales in 2022.

With our 2022 printed River Oaks Market Report Outlook currently in the works – it should be in mailboxes by February – we have been crunching the numbers, drilling into data and polishing our charts. What follows is a light preview of some of our analysis.

As you can see from the updated graph, 2022 will end the year with sales numbers well above the annual average.

And despite all the down-in-the-mouth commentary lately about mortgage rates, dwindling inventory and the housing market generally – and an erratic final quarter of 2022 in River Oaks – the activity in the neighborhood has been strong.

In fact, it was much better than coulda-woulda-shoulda been expected at this time last year. It wasn’t so much that the outlook for 2022 had been at all negative. The forecast was just more restrained than it turned out to be. That’s a good thing.

Most significant overall factor: Geopolitical events in eastern Europe in February jolted the international energy industry, significantly shifting the balance of supply, demand and the flows of calories around the world. This has been a boon for heritage energy producers still headquartered in Houston and mostly residing in River Oaks. Let’s call it the old guard.

These good days for traditional producers are a new lease on life for at least the medium term, which is good for River Oaks real estate. But eventually those same pressures will accelerate the development and affordability of alternative energy sources, and one has to wonder what role Houston will play in that new industry.

Most significant for our purpose today, however, is the observation of the predominant demographic of the new guard of buyers in River Oaks: young, swashbuckling, highly educated and astute masters of the global flows of energy. That is, energy traders and their financiers and attorneys have been the predominant buyers and sellers in River Oaks in 2022. We hope that means that, despite not being necessarily tied to the geology of Texas, they will continue to pitch their tent in Houston.