The Texas Housing Market Crisis: Is Houston Next?

Home prices are falling in half of the U.S. cities, with two Texas cities leading the top five. Headlines like these obviously scream crash. And in Houston, we had our prices drop under $340, which is the biggest drop in the past few years. We've got more than 40,000 homes on the market, which is the most in over a decade. And in this video, we're going to talk about why even through all of this happening, we still believe Houston isn't next to crash. And stick around till the end because history is going to show you why that is. But if you're new here, my name is RK Rossos with the Community Warriors real estate team. We've sold hundreds of homes to people just like you. And our biggest goal is really to just keep people informed, to give them the right tools to make the right decisions for themselves. So that is why we're going to talk about this very important thing today. Now, before I really explain why I think that Houston isn't going to crash, we're just really going to have to look at the facts of what's going on right now. Now, in July, as you guys can see here, we have had a record number of available homes hit the market. Over 40,000, which is an all-time high in July. And if you include the other listings, condos, townhouses, we have 61,000, over 61,000 listings on the market, which is a 31% increase, which also is insane and another record high. So the inventory and the amount of homes and properties on the market is actually insane. But this is where people are kind of getting it wrong. To be honest, they see these numbers and they panic. And I don't blame you. I kind of would panic too if I didn't know the full story. But really, here's what I wanted to talk about. Here's the clue that you really need to solve this mystery. And we've really got to go back to when Houston had this many properties and homes for sale on the market. And this is in June 2012. June 2012 was the peak of Jeremy Lin, Lin Sanity. Yep, I mentioned that you saw in that summer league game, he dunked the ball. We had yet to see that in a regular game. So it's been a while. But if we go back to that time, you guys can see here that in June, they had over 40,000 active listings, same as now. Everyone at the time honestly thought the sky was falling, but watch what happened next. So a year after, the numbers are really going to shock you. So get this, you can see here that sales went up almost by 15% the next year. On top of that, the prices, average prices went up 14%, median sales price went up 13%. Those were both record highs for the city of Houston. And the huge inventory of homes of over 40,000 actually dropped down almost by 25%. So what does that tell us? History shows us that when Houston has a lot of homes for sale, that it's not necessarily signs for a crash, at least in Houston. It's really a moment of balance here. And if the demand is there in places like Houston, it recovers and even bounces back even higher than what it was before. Now I believe, and also history will show you, that the market is getting back to normal. After things kind of got a little out of control these past couple of years. I mean, it was a crazy seller's market where everything was a bidding war. And now we're not really seeing that. We're seeing a little bit more of the norm. And it means now as a buyer, you're going to have a lot more time to look, choose and find the right home while also being able to negotiate. So that's really going to be a little bit more favorable for you as a buyer. And our sellers out there. These past couple of months, honestly past year, has been a little tough for a lot of people. I'll be honest, we've had a couple of clients have to sell their homes a little bit lower than what they've anticipated. You know, it's still within line where they are making a very solid profit. But you know, it's a different trend. Things weren't going up where you can list your house $50,000 over the value of what it should and it'll sell. You really had to get right down to where it should be and just sell it for the fair market value without trying to squeeze a bit more out of it. Now, as a seller with more demand coming up, it seems like we're not going to have as slow of a time selling these houses because they may not be sitting for much longer with more demand coming up hopefully over this next year. And here's the kicker. Past the history, we're actually starting to see signs of this right now. Not just my thoughts. Look at this trend right over here. You guys can see that the number of pending listings right over here is up. I thought, to be honest, they were on their way down. You can kind of see here, May, the pending listings actually dropped down in June. It may have started a trend where it continued to drop down. But this past month, we actually saw it really skyrocket. We're up 32% in the amount of houses that are currently under contract. And we can feel that on our side, that a lot of our clients have actually had their homes sitting for some time and finally got contracts and offers coming in. On top of that, when you just look at the closings overall, same story, thought they were going to be trending down. But through the past three months, May, June, and July, we have actually outperformed the amount of closed homes compared to this time last year. Now, those are all positive signs of demand and really cleaning up the inventory. This is the main, and I would say lead indicator of where things are at, is that showings. Showings is a really big factor. Last month, I was actually worried that showings were actually down compared to last year. And you guys can see that in June, there were actually more showings last year in June compared to this year in June. But instead of taking a dramatic drop down, we actually saw that it almost stayed pretty flat. And we had almost the same amount of showings in June compared to July, which means we had quite a bit more showings this July compared to last year, almost 20% more. That's nearly 30,000 more showings compared to last year, just to put it in perspective. And if you've been following recently with the Federal Reserve news from their last meeting, it is much more likely that we are going to have a Federal Reserve interest rate cut, which it doesn't directly mean that mortgage rates are going to be cut. But in these next couple of months here, an interest rate cut means that we're moving into the right direction. And sometimes mortgage rates will typically follow that positive trend. Just this week, I've actually had multiple meetings with clients and interested people that are thinking about moving. And it was one of the hottest topics that typically I would bring up, but they actually brought up to me and they were asking, hey, I heard the interest rates are coming down. If the general public believes that interest rates are coming down, a lot more people are just getting a lot more comfortable and gearing up to actually move. And here's another reason why the demand might really be picking up now. According to the Greater Houston Partnerships recent economic report that was put out for 2025, our city has actually added 635,000 more jobs since 2020. And unemployment is outpacing the national unemployment at 3.9%. And on the same page, it actually shows that over 1400 companies have announced relocations, expansions, or starting up operations in the Greater Houston area since 2021. With more than 250 of those 1400 projects being international and foreign-owned companies. That's a lot of national demand. That's a lot of global demand. And with a lot more companies really gearing up more activity in Houston, as well as our unemployment being lower than the national average, as well as Houston bringing a ton more jobs in this city. These are all positive signs over these next few years that a lot of people and a lot of companies are very high on Houston. I think one of the big factors, our economy doesn't really fluctuate like a lot of other economies where it's much more dependent on something like tech. We are heavy exports and these things will always happen. And these types of jobs that come to the city are much more resilient compared to these jobs where you see a ton of highs and lows, a ton of layoffs. You can see here that Houston exports was the second highest in history just last year. And also it is the number one in terms of volume that was exported. So all of this, just to point out the fact that when there is demand for homes, even if there are a ton of listings, the only thing that is ever going to matter is that the demand covers the supply. And that buyers that come in here end up buying the homes that are on the market just flat out. So we'll really have to see if these showings that are picking up as well as the economic growth will actually lead to closings. I really do believe that because of what history shows, but it's really going to depend on where you're looking. And your area might tell a different story compared to the greater picture of it all. So if you want to really get a better idea for your own move, just click the link down below and we'll tailor a game plan specifically for you and your move. And if you're really not sure about the area just yet, then you should definitely check this video out because there's an amazing area that I think you might just love.