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If 2021-2022 were innings packed with Grand Slams & Double Plays for the Houston real estate market, then 2023 will go down as the 7th Inning Stretch. What happens in Q1 of 2024 will determine if there's a walk-off homer, or another scoreless inning.
Last year was characterized by a scorching hot sellers’ market, with bidding wars and homes selling rapidly above asking price. 2022 saw median home prices in Houston increase over 15% from the previous year.
However, as 2023 kicked off, a shift began taking place. Rising mortgage rates leading to reduced buyer demand combined with increased housing inventory has resulted in a cooler housing market this year. Though still relatively competitive, the pendulum has swung more in favor of buyers.
Though significant geographic and price segment variation exist in the Houston metro, the overall housing market certainly downshifted from the frenzy of 2022 to a more moderate pace in 2023. Let's look at the comparison in our internal data, gathered across our 2,500+ agents across the Greater Houston region.
*Includes adjustment for larger client base
A few key factors drove Houston's housing market in 2023. Mortgage rates rose significantly, hovering around 6% by the end of the year, reducing buying power. However, Houston home prices remain relatively affordable compared to other major metro areas and we believe, mortgage rates are on the downhill slope as we enter 2024.
Overall, Houston's housing market remained healthy and growing in 2023. While price growth cooled from an overheated pandemic market, the fundamentals of demand and economic expansion kept the market stable. Houston is expected to see continued appreciation, though likely at a more moderate and sustainable pace.
Competition among agents may increase as the market shifts more into buyers' favor. Agents will need to highlight their skills and experience to stand out. Developing and nurturing long-term client relationships will be key to sustaining business.
With buyers struggling to afford high mortgage payments, real estate agents can provide value by helping clients find financing solutions like adjustable-rate mortgages. Agents should also expand their networking with lenders and mortgage brokers to facilitate deals.
Overall, Houston agents will still have plenty of business in 2024, but they must demonstrate their expertise and advice to thrive. Adapting to the changing market and emphasizing high-quality service will be vital. The real estate professionals who excel at matching buyers and sellers in any market will maintain success.
Houston's housing market should remain relatively balanced and sustainable in 2024, with positive but slower growth compared to the breakneck pace of 2020-2022. Steady job expansion and population inflows will continue supporting a healthy rate of home buying, though affordability challenges may exclude some buyers.
Home price appreciation will cool to around 3-4%, as (hopefully) decreasing mortgage rates. Sales volumes may dip slightly year-over-year but will remain relatively healthy and based on our exclusive data, inventory is expected to improve slightly, providing more selection for buyers.
With the new year underway, the real estate market is picking up as buyers look to purchase homes in early 2024. According to a recent article on popular yard signs used by realtors, some of the most common signs spotted in yards today read "Under Contract," "For Sale by Owner," and "Open House." These signs indicate that a property is on the market and generate interest among prospective buyers driving by.
Other popular signs convey important information like "Price Reduction" to highlight lowered asking prices. No matter what signs may be planted in front yards this season, they play an important role in real estate marketing during the home buying surge anticipated in 2024.
2024 is the perfect year to refresh your brand to attract more clients. One way to update your image is to have new, custom-designed signs made for your business by a company like Sign Boss. And working with a company like Sign Boss saves you time - experts handle the entire process for you, from conceptual design to installation. In our fast-paced market, a refreshed brand image is key, and companies like Sign Boss allow busy real estate agents to tap into their creative services and quickly get stylish, updated signage that can help attract more clients.
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