According to the Houston Association of Realtors (HAR,) February 2019 marked the end of three straight months of declining sales for single-family homes in the greater Houston area, compared to the same months in 2018. However, March began with pending sales up, and it’s looking good for an uptick in closed sales for spring. In addition to this slow start, Houston has experienced an influx of new companies and market interrupters hoping to take market share away from traditional real-estate firms and full-service Realtors. OutSmart asked top real-estate professionals if these industry stressors have them running scared, and also which design features are enticing fearless buyers to make a move this year.
Vice President of Real Estate & Agent Affairs – Pogi Corp.
Jared Anthony says that despite the statistics, his business was steady in December and January. “Looking back at the numbers for 2018, I did notice a slight decline in closed transactions. However, I experienced a bump in client activity in January and February of 2019.” Anthony points out that despite fewer closed transactions, “Single-family home prices saw a record high for the month of February as the median sales price increased 2.9 percent, going from $226,400 to $232,900. And the average sales price rose 1.9 percent, settling at $286,156. As these numbers indicate, sellers are positioned for a solid spring and summer for 2019.”
Anthony agrees that new technologies and changes in value propositions for consumers are inevitable. However, he says “the core of success in real estate is the value of services provided to a buyer or seller. Once we as agents devalue ourselves, our services, and the need for them, are pulled into question. The companies that are trying to cut out the middle-man (the Realtors) are doing a disservice to the client. Trying to enter a market by undercutting commissions will see a quick demise. Real estate is a relationship-based industry. I, as well as other industry experts, believe that only 25 percent of the industry will be taken over by the “iBuyer” technology. However, the iBuyer tech will not be able to replace the broker.” Anthony, who is vice president of Pogi Corp, believes that brokers must create a better value proposition to give clients a reason to hire them. “At Pogi we do just that. Our boutique real-estate firm specializes in a personalized real-estate approach to all our clients real-estate needs. We consider ourselves servant real-estate leaders providing cutting-edge real-estate marketing services for buyers and sellers alike.”
Realtor and Cofounder Anthony Upton Properties
Realtor Tim Anthony, who co-owns a full-service real-estate firm, isn’t scared of new business models entering his space. In fact, he says he welcomes the competition. “We understand that as Houston continues to grow, there are going to be national or regional firms entering the Houston space. In response to this disruption, we have committed to remain the boutique firm that our clients know and have built us to be. While a national or regional name could be important to some, our focus, and part of our mission statement, is to create a lasting relationship and experience, and not to be just another transaction. While technology continues to evolve and the market base is more tech-savvy, we do plan to layer some of those aspects into our practice. But we will never abandon the [goal of being a] traditional “full service” boutique neighborhood firm that our clients have come to value.”
Anthony Upton properties focuses mostly on inner-loop and close-in neighborhoods like the Heights, Oak Forest, Garden Oaks, Montrose, River Oaks, and Midtown. These neighborhoods often perform better than the Houston market at-large, and Anthony says all indications point to a busy spring and summer. Everyone who knows him knows his career started with a passion for homes and renovating. He’s lived and renovated in many of the neighborhoods he now sells in.
President and Private Office
Partner – Engel & Völkers Houston
Broker Brooks Ballard attributes the slowdown in the first two months of 2019 to the economic uncertainty of buyers. He says, “Despite the fact Houston is still feeling the aftermath of Hurricane Harvey, we are in a buyers’ market. Unlike metropolitan markets like Austin or Dallas, we are still combating the stigma of first-time flooded homes coupled with the psychological and economic effects of low oil prices. Even though our sales are up year-to-date, sales to local buyers have dropped off. Fortunately, this has been countered by national and international buyers outside our market, which we attribute to the success of our global reach.”
What’s trending with these buyers who are drawn to Houston from across the nation and around the world? Ballard is adamant: “Contemporary, contemporary, contemporary. Trending right now are very modern homes with clean white walls (glossy white, flat white, all white), with many large windows and marble, travertine, or light hardwood floors throughout. Today’s buyers want energy-efficient appliances and appreciate a bit of technology built into their home. As of late, I’ve noticed Gaggenau appliances are the new high-end favorite, bringing together sleek designs with luxurious functionality.” He predicts the demise of the study or home office. “For many home buyers, studies are obsolete and are being repurposed into hobby havens or children’s rooms.”
And speaking of innovative repurposing of spaces, Ballard confided, “Once, I toured a home in a very affluent neighborhood for a listing presentation and came across a sight that would make 50 Shades of Grey seem vanilla. The homeowners had completely converted their garage and garage apartment into an adult “dungeon,” complete with padded walls and accessories that would make your mother clutch her pearls. Seemingly proud of their “entertainment” space, the sellers even offered to leave their dungeon behind if the buyers were into it—sling included.”
Broker Associate Compass
Bryan Beene was one of the first agents to join Compass when the real-estate firm entered the Houston market in late 2018. Cofounded by Ori Allon (the developer of the search algorithm Orion that was acquired by Google), Compass positions itself as “a tech company reinventing the space.” OutSmart caught up with Bryan in late March, and he reported the busiest first quarter in his nine-year career. “And it doesn’t appear to be slowing down. When I read HAR’s reports, I find they rarely correlate with the submarkets I generally work (Heights, Montrose, West University, Rice Military, Garden Oaks, and Oak Forest.) Nearly every transaction I’ve worked this first quarter has involved multiple offers. From my perspective, new-construction homes, especially in the suburbs of Houston, occasionally skew overall market data.”
About making the move to Compass, he shares, “They prioritize agents first, and empower us as entrepreneurs. So making that change didn’t feel like a trade-off between technology and a full-service approach; it felt like I was aligning myself with people who understand the resources I need to grow a high-horsepower business that’s unmistakably mine.”
He says that lifestyle, location, and outdoor space is the driving factor with his buyers. “It’s very common for buyers to pass up the perfect house for them because it doesn’t have the outdoor space or offer the lifestyle they envision for themselves.”
Regarding interior color trends, Beene observes, “I am seeing the market moving away from gray and gravitating toward more classic colors like black, white, and light beige. I think gray did a lot for real estate and design over the last few years, but it’s time to thank it for what it gave us and move into a more sophisticated color palette. On another note, I wouldn’t be surprised if the next trend was “greige,” a blend of gray and beige. My favorite color right now is Benjamin Moore’s 1464, it’s the most neutral color that works for every style.”
Realtor and licensed Texas Attorney
The House Company
Realtor David Bowers specializes in Galveston real estate, where weather and insurance availability can impact sales. “The months of November and December were mild enough that several properties did sell, and eventually closed in January and early February. The government shutdown and the incorrect cessation of flood insurance were hurdles, but that did not affect my closings. It was almost as if the spring season started early. However, the dense fog and consistent rain of late January and into February seemed to put a damper on the overall market.”
Bowers says well-priced smaller homes, $175,000 to $300,000 and in excellent condition, shined through all the drab weather. He warns sellers not be greedy if they want to sell. Also, he reports that “there is more and more emphasis upfront in the listing on flood insurance, with the necessary flood vents and elevation certificates.”
Bowers has had several unusual real-estate transactions since he began selling real estate on the island in 1989. He says the infamous convicted murderer Robert Durst made an offer on one of his listings while Durst was in jail awaiting trial in Galveston. “The property was very close to where he killed and chopped up Morris Black in a back alley,” he says. Durst isn’t the only celebrity buyer Bowers has worked with. “I sold The Property Brothers two canal homes in Galveston, and got to list and sell their completely renovated houses six months later.”
Haunted properties seem to be a recurring theme in the strange tales of Galveston real estate. Bowers, a passionate historic-home preservationist, says, “I was sitting in the dining room of a Victorian house in Galveston while taking the listing, and there were noises upstairs. I asked who was upstairs and was told that was why the house was being sold. Paranormal experiences can be very real.”
Broker-owner Karen Derr Realtors
Broker Karen Derr has been a Realtor for over 25 years, and for most of those years she’s thought intensely about the demise of real-estate brokerage as she knows it. This morbid fascination all started when she was the first Realtor in Houston to market properties on the Internet in 1995. Derr knew real estate would never be the same.
Innovations and new business models appear on the scene every year, and are either quickly embraced by consumers or fall by the wayside. Constantly contemplating the end of your livelihood is nothing if not motivating, and Derr admits it keeps her excited about her business. “The intense competition keeps me driven to add value, make new markets, and hone skills that consumers can’t gain for themselves by watching YouTube.” She believes the value that Realtors bring to the transaction has to be more than honesty, integrity, and responsiveness. “Consumers respond ‘Well, duh’ to that value proposition.” So what about the homes? Derr says it doesn’t feel like homes have really changed that much over her career. She was recently impressed by a new townhouse near the Heights that offers a first-floor bedroom with its own separate front door, and a door the owner can lock out from inside the home. This makes the suite perfect for an Airbnb, but also integrated into the main house if desired. The enclave even provides ample guest parking. Derr is impressed, but has to laugh since she remembers that homes had these suites back during the Depression.
Realtor Greenwood King Properties
Realtor Jeremy Fain says he didn’t really notice the reported downturn in the market this past winter. “The first quarter of 2019 has been cuckoo crazy for me! I’ve put quite a few homes on the market, only to receive multiple offers within the first few days with buyers paying 100 percent cash. The past winter was particularly busy for me as well. I attribute this to always staying in touch with my past and current clients and relaying pertinent market information. But I also relate with my clients on a human level—over things such as wine, sporting events, wine, and current affairs. “Did I mention wine?” he said with a chuckle.
Fain is a Leading Relocation Specialist and an Accredited Luxury Home Specialist who was been named a Houston Association of Realtors Next Gen “Top 20 Under 40 Rising Stars.” He has strong opinions regarding some newcomers to the real-estate market who claim cutting-edge technology has been lacking in the home-buying and -selling experience. He says, “I’m a firm believer in the traditional full-service real-estate firm, and obviously Houston is too. Houston is a market that values and respects stability along with proven results.That is exactly what I’ve been delivering over the span of my real-estate career, and will continue to do so in the future. Some new firms are touting technology and reach. What they don’t realize is that’s exactly what we at Greenwood King have been doing, so in theory they’re already late to the game. As in any business, fads will come and go, but we, as the anchors, remain with success.”
Sales Manager Academy Mortgage
For loan officer Cody Grizzoffi, the first quarter saw higher-than-normal numbers of new loan applications. He says, “There is something about 2019 that has many people, myself included, ready to make goals become reality, and this is the year it is happening. I have had past clients reach out, ready to buy another primary residence or start investing in rental properties. I think the springtime is going to be extremely busy everywhere, but especially in the Houston and Orlando markets that I specialize in. These two cities and surrounding areas have an extremely large influx of buyers.” He also predicts that condominiums will soon be making a huge impact in Houston. “As fast as we are growing, there has to be somewhere to house everyone, especially within the loop. We have plenty of condo properties now, but there will be a lot more soon enough.”
Other trends Grizzoffi has fielded inquiries about include container homes and tiny homes. He says, “They are the newest type of homes popping up in different areas, but unfortunately lending guidelines and investors are not ready for them yet.“
As the mortgage-lending industry is increasingly impacted by Internet-based companies, Grizzoffi shared his thoughts on his relationship-based business versus mortgage originators who are not invested in the local community. “Personally, I always give 110 percent to my clients and treat them the way I would want to be treated, which is why many of them have become friends and repeat clients over my 16-year career in the mortgage industry. We all have some sort of “new app” or “new slogan,” but the bottom line on being different is doing your job. I take care of my clients beginning to end, and they know that from the get-go.”
Realtor—Greenwood King Properties
Debbie Levine says her delays in sales were a were a reflection of the market slowdown reported by HAR. She confides, “I had a fairly decent fourth quarter last year. In fact, I had my second-best year ever in my nearly 20 years of real estate.” But as winter wore on, she experienced a big slowdown in the first quarter of 2019. “However, March is really starting to pick up, with four closed transactions already, and five pending sales. I am looking forward to another successful year in our great Houston real-estate market.” Levine has been named a Top Producer by HAR and by Greenwood King Properties, which is a full-service real-estate firm with offices in Houston’s most affluent neighborhoods. Her confidence in the market is based on her decades of experience and proven market knowledge.
So what interior-design trends with staying power does Levine see right now? “I am currently seeing a lot of mixing of gold and silver, as well as organic accents such as stained woods on walls and ceilings. Wallpaper is also a trend that always gives a room extra appeal. In fact, I recently installed wallpaper in three rooms in my home!”
Noel G. Phillips
Area Manager for Inner Loop| Galleria/Memorial
Vice President/Senior Escrow Officer Chicago Title Houston
Noel Phillips has been in the title business for decades, serving Houston clients and the real-estate professionals who represent them. He explains two technological developments in the industry—one that’s a huge boon, and one that’s pretty scary. “The innovation in escrow closings in Texas (which became valid during the last half of 2018 but has not yet been talked about much) is the use of remote online closings. This is where a closing can take place outside the title company office by live streaming video. This method might be helpful if a buyer or seller is outside the U.S. at closing time, and appointing a power of attorney or traveling to the U.S. Embassy or Consulate’s office is not feasible.”
But what technology giveth in convenience, technology can also taketh away. “Wire fraud diversion is where a fraudster uses spoofed emails to convince a buyer to erroneously send their closing funds to a bank account which is different from the information originally provided by a title company. It can take months for the buyer to receive a refund of their diverted funds—if they receive any of it back,” warns Phillips. “The rule of thumb we tell all parties to every transaction: never trust wiring instructions sent to you via email. So always call your escrow officer to verify any wiring instructions which you may have received via email. And most importantly, when you are contacting your escrow officer to confirm any emailed wiring instructions, do not call a phone number provided within the body of the email or on any attachment. Only use a verified phone number for the title company where you are closing your transaction, such as a phone number provided on the sales contract, or one which you’ve located through an Internet search.” This scenario has happened multiple times in Houston already, devastating both buyers and sellers.
Realtor – Keller Williams
Realtor Thomas Phillips reports, “The winter was definitely slower for me than usual. However, I can already see that we will have a strong spring going into the summer. I have several properties under contract, and my pipeline is full.” Out of his company’s more than 700 agents, he is in the top 25 percent, so he knows how to weather market slowdowns better than less-experienced agents.
With a background in business analysis for Fortune 400 companies, Phillips takes new business models entering his field seriously. Still, he sees a clear path to continued success for traditional full-service firms. “These market interrupters pose a risk to the real-estate profession just like Uber did to the Yellow Cab. A recent survey showed that 14 percent of home sellers would rather get less for their home than go through the entire selling process with an agent. As real estate professionals, we will have to improve our customer service and provide value to the consumer, or the traditional full-service brokerage will go the way of Yellow Cab.” Phillips is with Keller Williams Realty Memorial, which claims the position of largest full-service real-estate company in Houston.
Loan Originator – Republic State Mortgage
OutSmart spoke with loan officer Keith Russell just as temperatures were warming. He took what he saw as a seasonal slowdown in stride, and believes the Houston housing market is poised for a strong, robust spring. He says, “My phone is ringing with potential first-time homebuyers, as well as repeat customers. I have seen an uptick in requests for refinancing, too. Headwinds that had plagued rates for most of the past two years began to die down in late 2018, which translates to more buying power now. I saw a softening in the market during the fourth quarter of 2018, which carried over to January 2019. January is typically my slow month. I use January to re-energize, reflect, and look forward. Let’s buy a home!”
Russell, with more than 20 years in the mortgage business, says it’s unavoidable to have borrowers shopping for new, untested entrants in the lending industry. But he urges caution. “We are all consumers. We make choices daily about where to shop and how to shop. Buying a home is a huge deal. A home purchase is one of the biggest events in one’s life. You want to get lost online?
“The loan process is complex, and requires a personal touch. In my experience, using a traditional full-service company is still the best value. I’m your hometown lender.” His belief in doing business with local people you know and trust might be influenced by his deep roots in Texas real estate. His descendants were part of Stephen F. Austin’s Old 300, the first families that colonized Texas.
Broker / Owner
Tom’s Galveston Real Estate
In contrast to the HAR reports for the Greater Houston area, broker Tom Schwenk finds the Galveston market to be quite stable. He says, “People always ask me what time of year is best to buy or sell real estate in Galveston. After more than 16 years in the market, I’ve seen our market is very steady throughout the year. While it was a little quieter this winter, sales were steady, and now in spring it is taking off. Our office had 13 houses under contract in the first two weeks of March. People come to Tom’s Galveston Real Estate because we put our customers first and we really know the market. Galveston is well-known for its wonderful historic homes and its coastal cottages and beach houses. These types of homes come with special requirements, be it a knowledge of insurance or planning guidelines. We provide this expertise to our customers, and that’s one of the reasons we remain successful all year.”
While Schwenk doesn’t tell any scary tales of a feast-or-famine market, he does have a few ghost stories to tell. One story in particular concerned the 2-year-old daughter of clients who, shortly after moving in to an east-side home, made two imaginary friends who turned out to be famous Galveston figures from the 19th century!
Galveston is a unique place, and I’m always delighted for homeowners to share the story of their homes with me. More often than not, this offers an interesting window onto Galveston’s past. Galveston has always been a place where business people, artists, and characters live alongside each other. We have an amazing, diverse lifestyle here, and I’m always happy to share it with others.”
Vice President of Sales
Mike Taylor with Sandcastle Homes concurs with many real-estate professionals selling homes in Montrose, Rice Military, Garden Oaks, and the Heights. It will take more than a couple of off months to really impact sales in these top-performing neighborhoods. Taylor says, “Although 2018 was a very successful year for us, we started noticing a bit of a slowdown in the fourth quarter, and that carried over into January 2019. However, in mid-January we began to see a dramatic increase in inquiries, and have experienced strong sales through February and early March. We expect to have a very busy spring and summer.” Sandcastle has been building in Houston since 1995 and offers new homes, usually in close proximity to dining and shopping.
Besides great locations, Taylor says his typical homebuyer is seeking contemporary styling. “We continue to see our clients leaning towards a clean, contemporary, uncluttered look. For interior colors, gray is still a strong preference—with Sherwin Williams Agreeable Gray being the most popular interior paint color. For exteriors, we have seen a shift toward bolder colors like dark blue with bright white trim.” While keeping a finger on the pulse of stylish living, Sandcastle Homes has worked hard to position themselves as the “best value in town.”
Realtor – Monarch Real Estate Group
Steven Tesney with Monarch Real Estate Group says his firm did feel the effects of the winter slowdown. “Traditional clients seemed to be taking a “wait and see” approach to moving forward with listing and/or buying. But many of our rental clients are becoming first-time home buyers. A large part of our practice is in apartment rentals, and we are seeing quite a few of our rental clients ready to stop renting and start buying, no matter what the market is doing. March is showing us quite a positive picture. Traffic is picking up and we are encouraged to see that clients are ready to make a move,” says Tesney. “In fact, we listed a home on Wednesday of this week and received a full-price offer after only two days. Come on, summer—we are ready for you!”
The selling season is just heating up, but Tesney can already tell you what will be the picks and pans for 2019, “Crown moldings are out and brass is back in. But most of all, wood floors, wood floors, wood floors! While wood floors are nothing new, we are seeing wood floors in all parts of the home—living, dining, bedrooms, and kitchens. And we’re definitely seeing new wood treatments—painting effects, unique stains, and intricate inlaid patterns.”
Tesney started taking a keen interest in Houston real estate way back in the late 1980s. OutSmart asked him if he had any strange stories to share, and he didn’t have to think long. “A home that I was previewing for a client was listed as a ‘4 bedroom, 4.5 bath, with spacious guest quarters over the garage.’ After touring the house, I went up to the guest quarters, only to find that one room had been turned into a colon-hydrotherapy room for the owner. The intricate machinery, while undoubtedly effective for its purpose, looked a bit like a modern-day torture chamber.
“More recently, I showed a three-story townhouse that mentioned ‘high ceilings’ and ‘completely updated’ in the listing. The update consisted solely of a new paint job, but the painter hadn’t used a ladder and wasn’t tall enough to reach the ‘high ceilings’ so he painted just to the top of his reach. The new paint was beige and there was about a two-foot stripe of stark white paint all around the room. DIY tip of the day: if you are a painter, invest in a ladder!”
V. J. Tramonte
Broker / Owner Joseph Tramonte Realty
Broker V. J. Tramonte has learned over the years that the sales statistics that matter are the local ones. He says, “I cannot speak for the Houston area as a whole, but on Galveston Island, we had a very good fourth quarter of 2018, especially with commercial sales. As for the start of 2019, things have been slower than last year. One theory is that people are waiting to see how the tax-law changes will impact them before making a large financial decision to purchase real estate. Also, the foggy and wet weather we have had since the beginning of the year hasn’t been helpful!”
The Tramontes’ long history on the island means few things really surprise them anymore. “Galveston can be eclectic and homeowners on the island are proud of their uniqueness, and reflect that pride in some of their décor choices. Again, I can only speak for the Galveston market, but brighter beach colors, retro touches, open-concept floor plans and traffic flow patterns, along with innovative lighting fixtures,
It’s also no surprise that eclectic homeowners living in homes dating back to the mid-1800s sometimes run into previous inhabitants—and we don’t mean at the local pub or grocery store. Tramonte explains, “The island is known for spirits, so they tend to make their presence known every now and then. Many times, the spirits either like or don’t like you intruding on their properties! Hudson Holmes, my associate broker, has had keys in his pockets move up his leg. And at the Colonel Bubbies building on the Strand, his camera stopped working as he was headed up a third-floor staircase. It started working again after he left the building!”
Heritage Texas Properties
Realtor Christopher Williams cites his passion for design as just one of the many reasons that becoming a Realtor selling, buying, and renovating Houston homes was a natural progression for him. His diverse interests and experience living abroad add to what he brings to the table for his clients. He also speaks Spanish. Williams shared with OutSmart some of the most sought after features he’s seeing, and those that are falling off of his buyers’ must-have lists. “Open-concept floorplans and smart design, coupled with home automation, is still the trend. Fortunately, the days of the 300-square-foot entry are on the decline. Today’s buyer is in search of a home with functional, usable space. My favorite new paint color is Benjamin Moore Brush Blue. It’s bold, versatile, and wears well with any color scheme.”
Besides an eye for design and renovation, Williams is a certified negotiator and has a degree in international business. It is notable that with many brokerage business models available in the Houston market, his opinion is that the full-service broker will always be the best value for consumers. “A seller paying a one-percent listing fee will likely get what they are paying for. I would venture to say the marketing and exposure would be limited. This typically results in more days on market and a lower sales price.” A native Texan, Williams is an HTP Top Producer.
This article appears in the April 2019 edition of OutSmart magazine.