Homeowners, landlords, and renters alike are feeling the pinch of an economy that is going through some pangs and pains. Despite the spate of townhomes, high-rises, and loft living areas that have been springing up, there's a substantial need for – and a low supply of – readily available single-family homes. This lack of inventory is one of many factors that have put the local real estate market into trying times.
"It's still a seller's market," said Lisa Gregory, Realtor and founder of Southern Heritage Realty based in The Woodlands. "A balanced market is usually defined as having six months of inventory, meaning all current listings will be sold within half a year. During Covid, we were down to less than one month of availability. Now, it's about three to three-and-a-half months before a house is bought."
Being a seller's market isn't necessarily good news for a seller, warns Gregory. "Prices are up all over the region thanks to inflation and rising interest rates. Anyone selling their home will have to buy another, so that they themselves will have to deal with the grief of buying in a seller's market. As a result, people are very reluctant to give up their homes."
Significantly higher prices over a few short years ago are the new norm as interest rates have ticked up to fight inflation. Even when the rates decrease again and inflation slows, the new 'base level' of prices set into the new paradigm is here to stay. "The preexisting inflation is now locked in," said Gregory. "For the foreseeable future, an interest rate of six to seven percent is the new norm. Now, while that's better than the eight percent of the past, the joys of locking in a rate of five percent or even lower are gone."
On top of the inflation and accompanying uptick in interest rates, home prices have dramatically increased, creating a 'double whammy' effect for those feeling the pain of searching for a new home.
"Montgomery County is more appealing than Harris for tax reasons, and we're seeing a two-to-three percent appreciation for this market. Homebuying is especially hard for first-time buyers. Insurance has doubled. Inventory is down. Lenders are tightening qualification standards for loans. Over the past couple of years, the percentage of people who are unhappy with their homebuying or home-selling experience has skyrocketed. Finding a new home is no longer a joy; it's a chore."
All these issues culminate in the vital need for an expert in the real estate business to guide buyers and sellers through these tumultuous waters. Gregory, who left the academic world after fourteen years to delve into the world of real estate and has been a local industry leader for decades, is passionately vociferous about what is needed to care for a client seeking to buy or sell their home.
"Buyers need an agent who knows the market and who can negotiate," she said. "Your agent of choice needs connections galore in the area, someone who knows the local markets, who else is on the playing field in every aspect, from developers to contractors to other agents and agencies. They need to be an 'agent's agent,' someone who can have a healthy relationship with the agent sitting opposite them in a transaction."
During COVID, many people decided to enter real estate as a backup, flooding the market with agents of lesser experience and dedication. Gregory stresses that she's been part of the area for 'generations.'
"You have to know what you're doing, or people lose money. Even after juggling factors like closing dates, down payments, earnest money, and inspections, you might end up with three identical offers, and you have to have the knowledge and finesse to determine which to choose that's best for your client. It's not about the sale; it's about the relationship."
“Buyers need an agent who knows the market, and who can negotiate,” said Lisa Gregory.
