The Woodlands area has seen a rise in sales and home prices since 2020, including areas like this street in Sterling Ridge. (Ellie Bohlender / Impact on the Community Newspaper)
In her 42 years of real estate experience, Vicky Fullerton, real estate agent for RE / MAX The Woodlands & Spring, said she had never seen a real estate market like this.
The Woodlands has a record low stocks of single-family homes after a declining trend since April 2020, and the average price of homes sold in the Woodlands in May was $ 405,000, up from $ 288,000 in the same period in 2020. According to the Houston Association of Realtors. It is not just home buyers and sellers who have faced higher prices as builders and developers have faced higher prices for building materials over the past year.
The main reason for the surge in home purchases was the COVID-19 pandemic through 2020 and early 2021, according to Fullerton, a member of Texas Realtors, as people realized the need for additional space.
“The inventory is as low as I’ve ever seen,” Fullerton said. “The pandemic has changed the housing needs and desires of people. … People move to Texas every day and interest rates are low. “
Among the factors affecting the real estate market, the number of active homes on the market in the Woodlands area fell to an all-time low after a downward trend that began in May 2020, from 1,087 homes available to 263 in May 2021, according to HAR data.
“Many homes now offer multiple options,” Fullerton said. “This is especially true for those who buy housing for the first time. They cannot compete with money supply. … They don’t have that kind of discretionary income. “
Fullerton said it is difficult to enter the market for homes worth around $ 250,000 at the moment.
Realtor Jennifer Sims and partner broker Jack Allen, both of the Woodlands-based Allen Sims Real Estate Group, said the largest market shift was for homes worth around $ 750,000, resulting in a spike in demand and affecting the rest of the market around Houston.
Fullerton said this is also starting to affect the townhouse market.
“Prices are rising. New construction is increasing due to labor costs … for new homes. Construction time is being pushed back from six to eight months to 12 months, ”Fullerton said. “This is just an incredibly difficult market.”
The demand for new homes has led some developers to phase out home sales.
Builder Taylor Morrison offers over $ 1 million worth of detached townhouses in the East Shore Woodland area. Taylor Morrison officials said the company is gradually releasing a limited number of homes for sale approximately every month.
“This new rhythm helps reduce the workload on our construction teams, channel partners and supply chain, and allows us to maintain our high standards of customer service,” the company’s website says.
Sims and Allen said they have heard builders report that they have to put cash buyers on waiting lists and refuse those looking to build a home from scratch because of construction costs and the demand for new homes.
HAR data shows that Woodlands market stocks have dropped to 0.7 months as of May, meaning that it will take about 0.7 months to sell homes if no new homes are listed. In early 2021, The Woodlands had 1.9 months stock. For comparison, according to HAR data, in January 2016, stocks on the market were 6.8 months.
“This is a seller’s market, but there is something to worry about,” Fullerton said. “When the seller sells his house, where will they go and what will they buy? Now it is incredibly difficult to find a property that does not have many offers. “
During a business advocacy meeting at the Woodlands Chamber of Commerce on May 21, Dahlia Brown, Texas Realtors’ director of field operations, said Woodlands had become an anomaly for commuter train passengers.
“There’s a lot more industry here,” Brown said. “Before, people lived in the Woods and went only to Houston, but this is no longer there. What is interesting to me is that now people live north of the Forests and come here. “
Brown said the reason people live outside Woodland is because the houses north of the village are more accessible.
“Woodlands is starting to build its sites and we’re recruiting,” Brown said.
According to developers The Howard Hughes Corp., the only parts of The Woodlands where single-family homes are still under construction are Creekside Park and East Shore, where several hundred homes remain. Additional development in the area is concentrated east of I-45, where communities such as Harmony, Benders Landing, and Imperial Oaks are still building hundreds of homes in craftsmen-planned communities.
As home prices continued to rise in the past year, some at the May 21 meeting raised concerns about the cost of living in the area. According to the latest figures from the 2019 U.S. Census Bureau, the median household income in the Woodlands area was $ 122,634, and the median home value at the time was $ 374,200, and the area’s rents averaged $ 1,566 per month.
The average home price in the Woodlands area was also higher than in all the surrounding areas. Information provided by Texas real estate agents on average prices in Harris and Montgomery Counties, Houston, Woodlands and the Greater Houston area indicates that the average price in the Woodlands is around $ 515,000 for the current year compared to Houston, which was next. the highest is about $ 341,500.
Increase in material costs
Another factor behind the rise in home prices is the cost of building materials, according to a June report by the Texas A&M University Real Estate Center.
According to the report, the demand for housing has sharply increased the price of sawnwood for developers.
The report indicated that the price of lumber for framing rose to $ 1,494 per 1,000 planks in May, up 250% from the previous year. It says the price of structural panels jumped from $ 414 to $ 1,657 per 1,000 square feet in the same period, up 300%. The forecasted price dropped to $ 902 in June, according to Trading Economics.
According to the report, housing construction, remodeling and the production of household items are the main drivers of demand for lumber.
Daniel Moon, vice president of development for the Sam Moon Group, said rising lumber prices have been one of the biggest challenges with the construction of The Residences in Metropark, a 324-unit condominium project to be built in Shenandoah’s Metropark Square, which is set to begin construction. at the end of this year. …
“Construction costs are going up,” Moon said. “We save costs in any way we can, but in most cases it comes down to the fact that the project is not over yet. If this does not happen, we should consider the possibility of suspending the project, canceling the project or rescheduling another project. “
Moon said for The Residences at Metropark, Sam Moon Group had to track multi-unit rental rates, along with rising construction costs, to confirm that the project would still move forward.
Other industries have been hit by rising home renovation costs. Janet Lipari, Regal Pools’ sales and design representative, said the cost of materials to install the pool has also increased.
“We have witnessed a widespread increase in labor prices, … concrete and plumbing materials have risen in price, especially after the freeze,” Lipari said. “We are now also having problems obtaining materials from abroad. They are all supported [coronavirus]and now there is demand. “
Lipari said that in her business, demand for pool services has grown by about 20% from about two years earlier.
“We don’t see any slowdown in growth at all,” she said.
Ellie Bolender contributed to this report.