Home buyers and sellers have consistently asked WHEN the real estate market will be back to normal. Well, good news. There are three indicators from the latest monthly numbers from the Houston Association of Realtors that might assuage those concerns.

The First Indication Is Active Home Listings Are Up

Total active listings in June 2022 were 28,409. This time, it’s 36,431. Now, what does that mean? It means homes are staying on the market longer so there is more available to buyers. More supply means less demand. Which explains why…

The Second Indication is Average Sales Price Going Down

Things are so expensive, right? Well, it appears relief is coming. Last June, the average sales price was $433,176 in the Houston area. Now it’s $431,092. A small drop, but none-the-less, a drop! More significant is what Realtors are starting to see with the offer process. As the market heads to a more neutral place (more on that below), Buyers are able to ask for more beyond just lower price. Closing costs, home warranties, title insurance are all now on the table for negotiation.

The Third Indication is Inventory Is Staying on the Market Longer

In June 2022, the single-family months of inventory was 1.9 months. The fewer months on market, the more that helps sellers. In general, 0-3 months indicates a STRONG market for sellers. 4-6 months is neutral while 6+ generally favors buyers. In June 2023, we are now at 3.1 months! That’s a 1.2 month addition in a year. While that number still shows it’s “seller-y” (especially if a home is priced right), it is still a huge indication that we are only becoming more of a neutral market.

These three indications that the real estate market is back to normal provide a snapshot of where we are now. What will happen as we head toward the end of summer (when families are shopping for neighborhoods with schools they are most interested in) will be interesting. Will inventory go back down but at lower prices? Will people continue to sit on the sidelines to wait out interest rates (note: please don’t do that!)? We will check back in next month.