In our May podcast episode, Episode 30, we had the privilege of hosting individuals from Steel Door Realty to delve into the post-pandemic residential real estate market. As we navigate a world significantly impacted by the global pandemic, it has become increasingly important to understand how the real estate landscape has evolved and what it means for investors, homeowners, and industry professionals.
In this follow-up blog post, we aim to provide a comprehensive overview of the key insights shared by our esteemed guests.
Challenges in the Houston Real Estate Market
A lack of inventory is central to the current residential real estate situation in Houston. Even the national supply of available housing is at a near-historic low. Several factors have contributed to this, including:
Changes in Buyer Behaviors
People stay in their houses longer, and buyers look for homes with extra space for home offices and other designated spaces. The Zoom and quarantine culture of staying in place or renting has decreased the number of buyers and the number of people selling.
During COVID, many people took advantage of refinancing to a lower 2.8% rate. Some even remodeled to make their homes something that they were happier with. Most of these people have elected to stay with these homes and lower payments. The recent interest rate hikes also played a huge role in reducing real estate sales.
Higher Taxes and Insurance
Between high-interest rates, HOA insurance, hurricane insurance, homeowners insurance, taxes, and other costs, sellers and potential buyers are hesitant to take on the risks and costs of ownership. Many future homebuyers have even elected to rent for now to see where the market goes in the future.
Higher Building Costs
These costs are not limited to buyers. The construction of new buildings has hit many challenges since the start of the pandemic. The Quarantine caused a shutdown of most construction and building plans. Then supply line issues further delayed many projects. The higher material costs, inflation, and various pauses in the building process are also major factors.
Houston Real-Estate Will Improve, But Not Right Away
Despite the challenges, our guests from Steel Door Realty assured podcast listeners that things will get better over time. Life goes on, and people will still need to move for work, changes in life circumstances, and to attain their ideal locations. As interest rates and other costs become the new normal, housing will start to move again. In the meantime, Houston is seeing a host of innovations like:
- Incentives for builders to create rental properties at affordable prices.
- Price caps on some properties renting to essential workers.
- Large areas of land are being bought by investors to build large rental properties, which may lead to more changes in buyer behavior.
- Mix-use spaces that allow multiple businesses or a mix of business and residential properties to exist together.
This is just the tip of a wealth of information we touched on in Episode 30 of our podcast. For more on this episode and other wealth-building topics, join us at Market Talk.
Royal Harbor Partners Wealth Management
We look at the big picture when it comes to managing and investing your wealth. If you have any questions about how you can still grow your wealth in the current residential real estate market, give us a call today.
This material is intended for educational purposes only. You should always consult a financial, tax, or legal professional familiar with your unique circumstances before making any financial decisions. Nothing in this material constitutes a solicitation for the sale or purchase of any securities. Investments involve risk.