Studies in England, at least, are indicating that the wave of massive rises in house prices might end soon. In the United States, the median home sale price is around $400,000, with no indication of slowing down, as inflation continues surging.
But, here in Houston, an ever-growing metropolis, how is the situation unfolding? Ronnie Matthews from the Great American Title Company says we are starting to see some of what England is seeing here at home.
"Form April 2023, to April 2022, there was a 1.3% drop," he says. "However, when you're up 35% from 2019 prices...it is barely noticeable."
Yes, you read that right, Houston home prices are up 35% from pre-pandemic levels, which threw a wrench into absolutely every financial aspect in our lives. But a lot of the reason for the bit of a drop is the lower valued houses.
"A lot of the reason we are seeing the drop...the number of homes valued under $350,000 has had dramatic drops in the number of homes sold," he says. "That is a reason you do not see our numbers drop as much...those drops in the low-price ranges doesn't affect the numbers as much as the high value homes, because they are still selling strong."
So, how low can the Houston prices go in the next 12 months?
"I could see us drop anywhere from 1% to a maximum of 5%, and that 5% would take the economy slowing substantially, which it does not appear it will do right now," says Mitchell.
But no matter how hard we try, or how big that percentage drop may be, we won't ever get 'back to normal' again.
"I do not think we will ever see those pre-COVID prices again," he says. "Short of a major recession...and obviously, we do not want that to happen."