Houston luxury homes have seen softer prices during 2016, and the trend is likely to continue for the balance of the year. The latest report from the Houston Association of Realtors indicates that home inventory in the price range of $500,000 and up continues to rise. At the same time, Houston luxury home sales are slowing, with July 2016 sales activity down by 21.7%. compared to last year.
Luxury real estate markets have slowed nationwide, and analysts attribute this to multiple factors. Foreign real estate investment has declined due to a strong dollar, and there are new Treasury Department requirements on all-cash LLC purchases. Concerns over Brexit and election-year uncertainties have caused some luxury home buyers to delay purchases. Here in Houston, a weakened energy sector has led to corporate restructuring and a reduction in executive recruiting.
However, we must remember that 2015 was a very strong year for Houston real estate. When we take the long-term view, Houston luxury real estate holds a great deal of future promise. According to a recent article in the Houston business journal, Texas recorded $48.3 billion in capital investments during 2015, placing it #1 in the country. Chemical and fuel manufacturing represent about 40% of capital investments, with much of it including the Houston area.
Texas also ranks #1 for mobile project jobs. These include data and call centers, distribution centers, research facilities and manufacturing facilities.
According to the Greater Houston Partnership’s “Economy at a Glance” report, Houston added 5,500 jobs in June. The strongest industries for hiring include leisure and hospitality, manufacturing, and professional and business services. Of these sectors, professional and business services grew by 1,600 positions, reflecting the strongest month-to-month gain in the past year.
While the current market conditions require patience from Houston luxury home sellers, home buyers have an excellent opportunity in front of them. Today’s advantageous rates for jumbo mortgages, and reasonable home prices, make it a smart time to buy a Houston luxury home!
Contact us today for your personal luxury real estate consultation!
KW Energy Corridor Team
11757 Katy Fairway | Suite 930
Houston, TX 77079