This is completely an unscientific opinion piece based upon my day to day first hand experience in the Houston Real Estate Market. This is probably no news to anyone, but I thought it would be important to put “pen to paper”, so that you could share it with your friends. Let’s start with the 800 pound gorilla in the room! Oil prices – According to Fox News, “Oil prices fell about 4 percent on Wednesday, with U.S. crude hitting 6-1/2 year lows and threatening to break below $40, after a huge unexpected stockpile build in the United States reinforced concerns about a growing global oil glut.”
I want to share the varying perspectives of buyers & sellers. The psychology is fascinating. As in any market it all comes down to supply and demand. However, in the real estate market there tends to be a lag that hits consumers anywhere from 3 to 6 months late. The declining oil prices have taken a while to influence the market, but it is my opinion, again based upon daily experience, that the day of reckoning is upon us!
Seller’s perspective: Sellers have started out the year in the 2014 frame of mind. “Price it high and watch it fly!!” However in 2015 slowing sales have caused listings to stay on the market for upwards of two to three months! Serving as a slap in the face and a wake-up call. Consumer confidence is forcing buyers to wait, rent, or submit low-ball offers. Uncertainty of a sale is something sellers are dealing with everyday.
Buyer’s perspective: 2014 prices paired with 2015 consumer confidence has buyers jittery at best. The “wait and see” approach is common now. No one seems to want to pull the trigger on the property. Buyers are concerned about job security, decreasing income and low disposable cash. The waiting strategy creates a stockpile in inventories, causing an increase in supply, which in the end will force prices down. Not good for sellers, but great for buyers. The challenge is deciding when to pull the trigger.
As we approach the 4th quarter of the year, and examine the data, Realtors and consumers alike will have to evaluate their own individual situations in order to make their decisions. In my opinion it is going to be a wild ride to Dec 31, but the good news is low gas prices will put extra dollars in everyone’s pockets for those daily needs. I always see the glass as half full!