We get asked this question – or face people’s assumptions – regularly these days. Basically our answer is that there’s no reason to wait to sell if your reason is to get a higher price than in the current market.
That may sound like a contrarian view, but it’s really not. It’s born out by the fundamentals of the local market. The Woodlands and surrounding areas in north Houston, north Harris County, and south Montgomery County are all currently holding value extremely well, for well-maintained, updated conventional homes, move-in ready. These same homes should continue to hold their value with a recovering credit market buttressing mortgage availability and a push with big new businesses continuing to head our way, including the new Exxon campus in north Spring.
But fundamentally it’s important to remember how the Houston Metro area housing economics work: when demand rises, supply rises. Because of our geography with no barriers to sprawl, and with growing infrastructure such as improving highways and the third loop under construction to support that outer growth, we can expect this phenomenon to continue.
And that means sellers should not expect a significant bump in future pricing other than what we would normally see consistent with past cycles. The Woodlands and surrounding Spring, Magnolia, Montgomery, and Conroe markets are subject to the rising demand, rising supply effect.
I wouldn’t expect any area and any home to see even a 10% rise in value in the coming 5 to 7 years. Considering the costs of not moving, effect on quality of living, and carrying costs associated with the delay (including passing up on opportunities in today’s market), there’s just not a compelling chance to take in our view. So we see no reason for sellers to hesitate in the current (relatively strong) market.
The demand-supply effect is markedly different here in Houston and The Woodlands Greater areas than on the east and west coasts, for example, where the coastal geography and older infrastructure limits sprawl, and therefore rising demand leads to rising prices, not rising supply.
So in five years here, existing housing stock will be five years older, and brand new homes and subdivisions will continue to be under development to meet demand, and existing housing stock will continue to compete with the new developments of the day.
There are ample reasons why existing homes are a better value than brand new homes, so new homes aren’t always a threat in general to existing homes, but that’s a separate post for another day…
