Twelve Months 2016 Market Report for South Katy TX - 2017 Projection
I always prefer to examine year-to-date data throughout any given year and look at year to year comparisons for discovering market trends as I think there is too much volatility on a month to month basis to make any good conclusions in this area. My primary market is South Katy or MLS area 36. Of course I also am interested in MLS 25 or North Katy; MLS area 37 Fort Bend West; MLS 29 Fort Bend-Sugar Land and Stafford plus a few others in Cypress TX.
Twelve months YTD 2016 versus Twelve months months YTD 2015 for MLS area 36 or South Katy comparison shows some interesting trends which probably continue into 2017.
Units sold in 2016 have decreased from 3,454 in 2015 to 3,368 during 2016 which is equates to a 2.5 % decrease and this trend existed for most if not all of 2016. At the same time Average prices decreased by approximately 2.1 % from approx $347,500 to $340,141 during 2016. Median prices also decreased in 2016 by Approx. 2.4 % from $317,800 in 2015 to $310,000 in 2016. Prices have fallen for the first time in several years and my crystal ball says this trend will continue at least through the 1 ST QTR 2017. Usually South Katy over several prior years has enjoyed a fairly stable market which shows gradually rising prices over time.
The price decrease continues to be mainly due to energy prices dropping significantly last and early this year and energy companies laying off over 25% of their Houston workforce. The layoffs have continued but I have seen a few energy companies reporting decent financial results in recent days. I suspect this percentage of the workforce who were part of the layoffs is probably too low. We are also seeing some major retailers announcing fairly large layoffs are coming.
The low levels of available inventory from the last several years has cushioned the impact of low energy prices for many months especially in late 2015 and it continued to have a negative impact on 2016 sales and prices for the year as a whole. Another factor showing up in the local Houston economy is lower car sales. The hot streak for local auto sales probably has ended, with a 4 percent decline expected in 2016 after back-to-back years of record-setting growth for this whole area car sales. Folks are holding to their cars longer and or buying used or pre certified autos. I fear 2017 at least for several more months this trend will continue.
New Listings also decreased by a small amount by approximately .6% during 2016 and active listing went up by approx.13.3 %. Inventory levels of homes priced above $350 K have definitely increased and I believe will probably continue to do so during the first half of 2017 and maybe beyond. There is a lot of homes available for sale priced at $500,000 and above price level and many of these homes are languishing on the market. If you are thinking of listing a home priced at $500 K level or higher you might want to wait till March or April 2017 to put this home on the market plus hope for the best
Days on the market have moved from 48 days to 55 days and months of inventory which were almost hyper market level numbers the last several years went from 2.8 months to 2.4 months in 2016. I am surprised by the decrease in months of inventory and I believe it is based on the strength of the lower priced homes market being the primary reason. Obviously South Katy is still, depending on the price point, a seller's market but has weakened compared to at least the last 5 years or so. Year 2017 will see this trend continuing and there will be some homes with many potential buyers interested and several offers on the table.
Pending sales have increased to 2,797 or about 2 % which is some good news for sellers.
The closing price to original list price is 95 % and has deteriorated during 2016 from 96 %. This discount from list will continue to deteriorate during 2017 especially in the higher priced home market.
Demand for affordable family homes has risen in South Katy and available inventory is still very low and frankly is very hard to find if the condition is good or better. I consider affordable to be homes priced at $300,000 or less. The demand and supply equation gets much worse when looking for homes priced at less than $200,000. This part of the market will continue to be vibrant with only a low levels of available inventory being a negative in 2017.
I personally think units of sale in 2017 will continue to drop and in some neighborhoods by a fairly large amount. Some older neighborhoods will probably experience a fairly large price decrease during the during most of 2017 and some newer and in demand neighborhoods will probably experience a small price increase or stay flat. I do not see new home builders reducing their prices at all and that was case for the majority of 2016. The best new home buyers might see are larger builder’s price incentives in several communities and this trend will continue during 2017 as builders need to move languishing inventory.
If you have questions about the South Katy market or any other surrounding area call me and let's get started finding you and your family a home. There are still excellent opportunities to buy a really nice home. If you like some information about these available family homes, I can create a custom search for you which will be presented to you on your own web page. These are generalized market trend numbers and every home needs to be evaluated by itself and based on many factors. Computer models estimates on the internet are extremely inaccurate.
There is no implied or express warranty or guarantee of accuracy of the above figures. All figures were obtained from the Houston Association Realtors MLS system. These market numbers are constantly changing on a daily basis as this is a very dynamic market and will continue to be during 2017.