Each week, the Houston Association of Realtors (HAR) produces statistics to provide us with a citywide snapshot as to how the market is behaving. The one statistic I like to pay close attention to is “pending sales.” Pendings are transactions that are actively under contract but have not closed escrow yet.

While closings are of utmost importance, they provide a picture of the market from 30-60 days ago. And in today’s market, those transactions are not going to resemble today’s deals by any means. Compared to one year ago (week 31 of the year), pending sales in the Houston area are down a whopping 34.6%. This is 14 consecutive weeks of declines.

With the Fed raising rates and the bond rates reacting accordingly, fewer buyers have entered the market as borrowing costs have increased. This has caused inventory to swell, relatively speaking, offering more choices to buyers than in recent history. One year ago (July 2021), we had 1.8 months of inventory and today that stands at 2.5. We are on a steady march to a market of equilibrium. If you are a seller, this fall might be the final window where you will not be competing with dozens to even hundreds of other homes on the market in the spring of 2023.

Now, if you are a buyer, the gamble you are taking by waiting to purchase is obviously potentially higher mortgage rates. If they continue their upward trend, buying power will remain diminished and hoping for a pricing correction to compensate seems a little far fetched in my opinion. The truth of the matter is I have always believed in the fall season of real estate. There is less competition across the board whether you are a buyer or a seller.

The data is beginning to support a transition from a white hot seller’s market into a traditional seller’s market. That being said, buyers are beginning to take back some of the power. Anytime there is a noticeable change in the real estate environment, pausing becomes the norm. And sellers do not want buyers to pause. More buyers are reevaluating their needs and at what cost.

Please remember, the Houston market as a whole may not dictate exactly what is happening in your micro-market. The Heights differs from Katy which differs from The Woodlands. Always consult a real estate professional. If you have any questions or are curious about the market in general, please feel free to contact me as I am passionate about all things real estate and would enjoy chatting with you!