Memorial Northwest Real Estate Market Update | June 06, 2022
Today I will be sharing with you our perspective on the local real estate market here in Houston, Texas, specifically a market update for the neighborhood of Memorial Northwest. Whether you are looking to buy, sell, or just keep an eye on the market, we look forward to being your resource.
What is happening in the real estate market in Memorial Northwest?
We currently have 16 homes pending, with 7 homes sold in the last two weeks, averaging a sale price of $125 a square foot. Seven homes sold over asking price, with one home selling 11% above the listing price.
Compared to the two weeks prior: Homes sold are up from 5 sold to 7 sold, and the average sales price per square foot is also up: $125 ($123 previously). If we look at how fast the move in ready homes are going the demand in this area has not surpassed the supply, making it still a great time to sell. We cannot pinpoint another time in history where you were almost guaranteed to get 5-10% more than your homes current market value.
I just want to make sure to note, how mind blowing it is that a homes are selling 11% over asking price (over market value) in our neighborhood. This market update and the one prior!
Buyers agents around Houston are seeing a slow in the real estate market, but it isn’t affecting the neighborhoods with such high demand, like Memorial Northwest, so that is good news for anyone that waited until summer to sell. I know the interest rates rising has been one deterrent from some buyers purchasing right now, but that isn’t your ideal buyer anyways! And the educated buyer still knows, they need to buy ASAP.
P.S. The median days on market is 7 days, with most homes selling during the first 5-6 days (aka a really good coming soon campaign like we do at Jo & Co. boosts that and your over asking price ratio!)
Check out the graphic below for a larger overview of the real estate market for the last two weeks in Memorial Northwest.
What is happening in the real estate market nationally?
Mortgage rates trended higher last week. Home prices appreciated at a slower pace in March according to the FHFA home price index but a faster annual pace according to the 20-city Case-Shiller home price index. Mortgage application submissions decreased. Construction spending increased in April, largely due to residential construction spending. Job openings decreased in April, and in May private nonfarm payrolls showed the slowest increase in the pandemic-era recovery. Both continuing and initial jobless claims fell. The employment situation showed signs of stabilization.
|MORTGAGE RATES CURRENTLY TRENDING||THIS WEEK'S POTENTIAL VOLATILITY|
- HousingWire Lead Analyst discusses home inventory, inflation, and purchase applications. Listen Now >>
- Home price will inevitably slow in coming months, says National Association of REALTORS® (NAR) chief economist. Watch Now >>
- The share of listings with a price cut is creeping up. Read Now >>
- The 20-city Case-Shiller home price index showed that home prices appreciated 2.4% month-over-month in March, the same pace as February. Year-over-year, home prices appreciated 21.2%, up from February’s 20.3%. Although one can safely predict that price gains will begin to decelerate, the timing of the deceleration is a more difficult call,” says Craig Lazzara, managing director at S&P DJI.
- The FHFA house price index showed that home prices appreciated at a slower pace in March, up 1.5% month-over-month compared to the 1.9% rise the month before. Year-over-year, home prices appreciated 19%, also lower than the month before.
- Mortgage application submissions fell 2.3% during the week ending 5/27. The Refinance Index decreased 5% while the Purchase Index decreased 1%.
- U.S. construction spending rose 0.2% month-over-month to a seasonally adjusted annual rate of $1.74 trillion in April. This rate is 12.3% higher than the April 2021 construction spending level. Once again, residential construction spending led the way in increases, rising 0.9% month-over-month to a seasonally adjusted annual rate of $891.5 billion. Nonresidential construction spending fell.
- Job openings slipped by 455,000 in April, according to the Labor Department’s Job Openings and Labor Turnover Survey. The decrease brought April’s number of job openings to a level of 11.4 million. The drop helped close the gap between the number of job openings and the number of available workers, which was 5.46 million. Hires and quits were little changed.
- In May, private nonfarm payrolls increased by just 128,000 according to the ADP employment report. This was the slowest increase in the pandemic-era recovery. Small businesses took the biggest hit, cutting 91,000 jobs. Large businesses, on the other hand, added 122,000 jobs to their payrolls. The slowed pace is consistent with the graph trends showing market stabilization.
- Continuing jobless claims fell to a level of 1.31 million during the week ending 5/21. Initial jobless claims fell to the level of 200,000 during the week ending 5/28.
- The employment situation showed signs of stabilization in May as well. Average hourly earnings climbed 0.3% month-over-month – the same pace of increase as the month before. The average workweek remained unchanged at 34.6 hours. Government payrolls increased slightly to 57,000 jobs. Manufacturing payrolls had a sharp fall in May, dropping by over 40,000 to a level of 18,000. Nonfarm payrolls decreased as well to a level of 390,000. The participation rate remained relatively unchanged at 62.3%. Private nonfarm payrolls decreased to 333,000. The unemployment rate was unchanged at 3.6%
Review of Last Week
GOOD JOBS BAD FOR STOCKS... A better-than-expected May jobs report slammed stocks, reinforcing investor fears the Fed would keep its foot on the gas with interest rate hikes that could spark a recession.
Jobs data saw wages up 5.2% annually, but they lag consumer price inflation of more than 8% by a substantial margin. Services sector activity slowed for the second straight month, to the lowest read since February 2021.
Yet business activity in the manufacturing sector expanded more than forecast, consumer confidence came in better than expected, and both initial and continuing jobless claims kept falling.
The week ended with the Dow down 0.9%, to 32,900; the S&P 500 down 1.2%, to 4,109; and the Nasdaq down 1.0%, to 12,013.
The May jobs report sent bond prices down, the 30-year UMBS 4.5% off 0.92, to $101.12. In Freddie Mac's Primary Mortgage Market Survey, the national average 30-year fixed mortgage rate inched down, marking three straight weeks of declines. Remember, mortgage rates can be extremely volatile, so check with your mortgage professional for up-to-the-minute information.
DID YOU KNOW… Realtor.com reports, "Nearly 3 in 4 home sellers this year are also planning to buy a home, so what’s good for the buyer is also, in many cases good for the home seller.”
INFLATION, JOBLESS CLAIMS GAIN, CONSUMERS UNHAPPY...The Consumer Price Index (CPI) should show inflation continuing to rise. Initial Unemployment Claims are also expected up. Small wonder the University of Michigan Consumer Sentiment index is forecast to remain historically low.
Residential construction spending headed up 0.9% in April, and is now 18.4% ahead of a year ago. Spending on new single-family home building gained 0.5%, while new multifamily spending increased 0.8%.
The national Case-Shiller Home Price Index saw record increases of 2.6% in March, and 20.6% annually. The FHFA index of prices for homes financed with conforming mortgages was up 1.5% in March and 19.0% for the year.
But the Mortgage Bankers Association’s forecasts: “prospective homebuyers should start to see moderation from the double-digit price appreciation reported for well over a year in most of the country.”
Mortgage rates trended downward last week. New home sales decreased, as did mortgage application submissions. Continuing jobless claims increased slightly while initial jobless claims fell. The GDP estimate for Q1 of 2022 dropped. Pending home sales declined as well. Inflation according to the PCE index showed a slower pace. Personal income increased as did consumer spending.
|MORTGAGE RATES CURRENTLY TRENDING||THIS WEEK'S POTENTIAL VOLATILITY|
- Sandra Thompson is confirmed as FHFA director. Read Now >>
- What does the future of home prices hold? Watch Now >>
- Openings may emerge for hopeful buyers as market cools. Read Now >>
- New home sales slipped in April, falling 16.6% to a seasonally adjusted annual rate of 591,000. After their large spike in the beginning of the COVID pandemic, the rate of new home sales is finally starting to stabilize, returning to its pre-pandemic levels.
- Mortgage application submissions fell 1.2% during the week ending 5/20. The Refinance Index decreased 2% while the Purchase Index remained unchanged.
- Continuing jobless claims increased slightly during the week ending 5/14, rising to a level of 1.35 million. Initial jobless claims decreased to a level of 210,000 during the week ending 5/21.
- The GDP estimate for quarter one of 2022 fell 1.5%.
- Pending home sales decreased 3.9% in April, with the pending home sales index falling to a level of 99.3.
- The PCE index showed a slower pace of inflation in April, up 0.2% month-over-month. This compares to the 0.9% increase in March. Year-over-year, inflation reached 6.3% -- also lower than its level the previous month. Personal income increased 0.4% month-over-month in April while consumer spending increased 0.9% month-over-month.
Review of Last Week
REBOUND... After seven straight weeks of declines, the three major stock indexes bounced back sharply on news of positive retail earnings, hints the Fed may slow rate hikes, and signs inflation may be peaking.
All was not copacetic, however, as University of Michigan Consumer Sentiment fell from 82.9 a year ago to 58.4, its lowest level in 10 years. Continuing jobless claims rose and new home sales cratered.
But, hey, the Fed's favorite PCE Prices inflation measure slowed to 6.3% from 6.6% in March, indicating rising prices may have peaked. And minutes from the Fed's May confab suggested rate hikes could ease in September.
The week ended with the Dow UP 6.2%, to 33,213; the S&P 500 UP 6.6%, to 4,158; and the Nasdaq UP 6.8%, to 12,131.
Bond prices overall rose strongly for the week, the 30-year UMBS 4.5% UP 0.85, to $102.04. Higher bond prices signal lower rates, so the national average 30-year fixed mortgage rate fell for the second straight week in Freddie Mac's Primary Mortgage Market Survey. Remember, mortgage rates can be extremely volatile, so check with your mortgage professional for up-to-the-minute information.
DID YOU KNOW… Since December, increased home prices and mortgage rates have resulted in a 42% boost in monthly payments for a median priced new home with a 30-year mortgage and a 20% down payment.
CONSTRUCTION SPENDING GAINS, MANUFACTURING, SERVICES, AND JOB GROWTH SLOWS... April Construction Spending should come in stronger overall but we'll monitor the residential part of the data. The ISM Manufacturing and ISM Services Indexes are expected to show slower rates of growth in May, same as the number of new Nonfarm Payrolls in Friday's jobs report.
New Home Sales dove 16.6% in April, falling for the fourth straight month, to a 591,000 annual rate, down 26.9% from a year ago. The big drop was blamed on declining affordability due to higher mortgage rates and home prices.
The National Association of Realtors Pending Home Sales index of signed contracts on existing homes fell 3.9% in April. But they noted, “There is an ongoing housing shortage, and properly listed homes are still selling swiftly.”
Realtor.com reports that active listings posted size-able gains for the first time in three years—up 5% versus a year ago. The number of sellers has grown year-over-year six of the last seven weeks, as inventory gradually builds.
Can we sell yours?
So if you are in need of a listing agent, we would love the opportunity to see your home and meet you of course. My husband, Edward, and I, look forward to being the brokerage and team for you! You can reach out to us via email: [email protected] & [email protected] or telephone: 832-493-6685.
If you are curious 'How to get more money for your home when listing it for sale', check out this blog post.
I hope you have found this blog post super helpful. If there is anything else we can do for you, including helping you sell (or buy) a home, I would be honored to assist. I hope you have a great day/evening. Cheers, E + J.
We are so happy you found our little corner of the interwebs. We look forward to y'all reaching out to us. We love to answer questions and welcome them. Recently we created some local maps, and you can download those by clicking the image/link above. Below, you will find an index of some very helpful information to assist you in learning more about the Houston suburbs. If you are relocating to our neck of the woods, we hope you reach out to us, because we would love to help you by being your local realtor and friend. Thoughtfully written for you. Hugs, Jo.
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