A First Time Home Buyers Guide to What Cause Houston Real Estate Market Shift
Hello and welcome to Houston First Time Home Buyers Edition.There are several factors that contributes to Houston real estate market shift that help to determine if we are in a buyer's, seller's, or balance market. These factors also help to influence pricing, demands and supply. Keep in mind these shift can happen at any time and do not impact each area in the same way. These factors include:
Demographics - that includes population shift.
Interest rates and affordability- as interest rates increase, affordability will drop and the market will respond by shrinking.
Unemployment - when unemployment rises, this typically mean people are losing their jobs and or cannot find jobs, thereby home purchase will slow, versus a low employment rate, usually mean jobs are plenty, people are working and can afford to buy homes, thereby expanding the housing marking.
Consumer confidence - is a direct result of economic health. Job growth and stability in multiple sectors contribute to consumer confidence which directly influence the Houston housing market. Put another way, when the economy is strong, people are more likely to purchase houses. When there is economic uncertainty, first time home buyers are more cautious, thereby reducing demand for real estate.
Inflation and Cost of Living - As the cost of goods and services rises, the cost of construction materials increases, which leads to higher home prices. This in return will affect first time home buyer's purchasing power, making it more difficult for them to afford homes, resulting in reduced market activity.
Government Policies and Subsidies have direct impact on housing affordability by way of housing grants, for low and middle income families. Mortgage regulations such as loan terms, down payment rules and qualifying standards does impact borrower access and influence price trends. Zoning laws can limit supply and raise home prices. Tax credits and subsidies can encourage new home purchases and stimulate new home constructions.
Seasonal Trends like spring will typically bring more home sellers and buyers into the market, while late summer all the way into the winter months will bring less activity.
Local Trends such as affordable development activity, like what is currently taking places in Brookshire and Rosenberg where cheaper homes are being build will influence demand and supply.
Understanding market shifts will help first time home buyers to make more strategic home buying decisions with their Realtor. It will also help first time home buyers avoid overpaying during a seller's market, and help their Realtor negotiate better terms in a buyer's market. Houston is a dynamic city and different areas of real estate often moves in opposite direction. For example, prices on brand new homes in Katy, or Rosenberg may be negotiated down, while at the very same time, resales in West University is selling within days, attracting multiple offers in the process.
It is my belief that real estate success comes down to preparation, and working with a knowledgeable Realtor that will provide expert guidance. Market conditions does shift quickly, especially in a large, diverse Metropolis like Houston. Make sure you work with a Realtor who understands not only your wants and needs, but the area you are interested in. This will ensure a confident, well informed, data driven housing decisions.
Finding out if you are in a buyer's market or seller's market is easy. If you are financially prepared and plan to stay in your home for at least five years, Houston continue to be a very strong market with steady growth potential.
As always, thank you so much for stopping by. Remember, if you are thinking of purchasing your first home, please contact us. We are here to help. We have been helping Houston first time home buyers since 2011 and we can help you. I hope you have an amazing day. Until next time...Diana
