Of all the businesses that were hit hard by the pandemic over the last year (and again by the deep freeze earlier this year), the real-estate industry has perhaps seen the strongest rebound and actual strides forward in 2021. Houston’s real-estate market has shown incredible stability throughout the coronavirus pandemic.
According to the Houston Association of Realtors’ February-to-February market report,
sales of single-family homes increased 1.2 percent even as the pool of available homes shrank. February 2021 marked the ninth straight month of sales increases, and while all price ranges showed a major uptick, it was the sale of luxury homes that skyrocketed.
So what’s fueling this real-estate boom, and what can we expect in the coming months? We asked some of the area’s top Realtors and brokers to share their insights.
I believe historically low interest rates are a factor [in the booming market, despite] the limited housing supply.
The pandemic was definitely challenging, [but I saw] an increase in my business because people decided they wanted to relocate due to the pandemic. My brightest high point over the past year has been helping my clients turn their dreams into reality!
Technology has made things easy for me to market my listings online and target areas to search for homes for my clients. Plus, I sold a home during COVID via a FaceTime virtual showing to clients who were moving here from out of state.
The hottest-selling homes right now are those with a great patio or outdoor space. Also, home-office space is in demand. I predict a robust market for 2021. —Becky Wheeler
Sales are up in different markets and price points, and a lot of it is attributed to people seeing the stability in owning a home. Also, the low interest rates allow for the purchase of a larger home with a home office or more green space.
I’m truly, truly enthusiastic about empowering our clients and advisors with the opportunities that we bring to purchase real estate in Houston, or anywhere in U.S. and globally.
Based on all of the information I know after 25-plus years in the industry, real estate will be the fastest-growing industry. Residential and commercial sales are at record levels because, in part, there is so much available capital in the market and low interest rates. —Brooks Ballard
Over the past year, more people have been working from home, so they are realizing that they want something newer, bigger, and updated, since they have spent more time in their home than they normally would.
For me personally, the challenge was home-schooling with my kids and having my partner working from home, too. I have worked from home myself for years, and am used to it. However, I was not used to having multiple people at home with me. But everything has worked out just fine as we all learned to adapt.
Rates are on the rise, and expected to go up more by the end of the year. But even if they do, they are still lower than they have been in the 18-plus years I have been in the mortgage industry. More people are realizing the cost of rent continues to go up, and they could get into a home of their own to start building their own equity in real estate. I have also had more repeat clients start investing in the real-estate market this past year. —Cody Grizzoffi
With this being such a seller’s market, one of my worst challenges is seeing some of my buyers lose out on the property of their dreams because of a bidding war. It’s hard to let them know that even though they offered more than list price on the home, they lost out on the deal to someone willing to pay even more. But on a positive note, I am pleased that several of my buyers were able to afford more house for their money, given the rates, and more of my sellers were able to sell their homes at top dollar.
I have found that the broader Montrose area has been a hot spot of activity in the past year, primarily driven by its diversity and uniqueness, its walkability to local restaurants, bars, art studios, and cultural spots, and its close proximity to downtown Houston, the Texas Medical Center, and the Energy Corridor.
Over the past year, I had five close family members, including my husband of 30 years, contract COVID-19, resulting in extended stays in the ICU. I am thankful my husband survived, as well as two other family members, and I am blessed and comforted with the memories of the two we lost. I am thankful for all the efforts of the healthcare providers, and my many friends and clients who have supported us through these difficult times. —Dan Ritchel
Last year forced us to spend more time in our homes during the lockdowns. For many, this resulted in wanting more space, amenities, or functionality out of our homes. Also, record-low interest rates increased the purchasing power for many home buyers, and a surge of buyers relocating to Houston from both the east and west coasts. Where $1 million is “entry level” in some of those markets, it gets you into the luxury market in many parts of Houston. Who wouldn’t want to spend $2 million rather than $5 million for a new luxury home—and avoid state income taxes!
The inner loop is hot! The Heights and surrounding pockets continue to see very few days on the market, and multiple offers for homes that are priced right.
I see a strong sellers’ market in many areas of Houston that will continue throughout 2021. Despite increases in interest rates, I expect buyer demand to remain steady as we still have a large number of people upgrading or looking to get into their first home. With several pockets around the inner loop experiencing rapid revitalization, it’s also a great time to consider getting into some form of real-estate investing—even something as simple as buying and holding land.
I had the opportunity to help over 50 clients in 2020, from multi-million-dollar buyers to first-time buyers or sellers, and everything in between. It’s truly been fulfilling to be a part of everyone’s journey. There are so many moving parts during the sale or purchase of a home. There is nothing more rewarding than getting that thank-you at the closing table, with everyone taking a deep breath and just soaking it all in—before the move starts! —David Batagower
It is interesting that home sales seem to have nothing to do with COVID, but perhaps they had everything to do with COVID. People may have decided to go for their ideal home (or a home they could make ideal), because where they live matters. Your home is important, and if you thought you wanted to live someplace, then you were going to do it now because COVID has made sure you got your priorities right. And with interest rates so low, you almost couldn’t afford not to go for the dream property.
In Galveston, lots of people bought cottages and Victorians to use as vacation rentals. People wanted someplace close they could go to without being on a plane. They could not get on a cruise ship, but if they wanted to be on an island, here we are in Galveston.
The hottest places for sale are renovated properties that are ready to go and priced right. There are a lot of overpriced houses sitting out there, and they could have sold if they were priced right. Cottages and Victorians are the hot ticket in my part of Galveston. We have houses that did not flood in Ike or Harvey, and did not lose power in the February freeze (but not all houses, though).
With the Biden rollout of the vaccine, I predict 2021 is going to become an amazing year for all businesses. We need more appraisers! —David Bowers
People realize, now more than ever, that their home is their most prized possession. Low interest rates are also very appealing for buyers wanting to make a change.
The current inventory is extremely tight, and buyers are often having to compete in multiple-offer situations. There is nothing more satisfying than to win a multiple-offer situation and see a client obtain the house of their dreams.
Technology has made the real-estate process much easier, as consumers can see a home virtually and make an offer without ever having to step foot inside. I have sold homes over the past year sight-unseen.
Consumers still love a walkable neighborhood, which includes many inner-loop areas such as Montrose, Upper Kirby, EaDo, and the Heights.
I predict that the real-estate market will stay strong and competitive throughout the year as we deal with low inventory and historically low interest rates.
I was in a panic over the real-estate market when the pandemic began, but I soon came to realize how much people love and appreciate their homes. Whether making improvements to an existing home, upsizing, or downsizing, it is quite clear that owning a home remains the American dream. —Debbie Levine
The biggest challenge we’ve encountered has been our general inability to meet with and borrow from the bankers who issue rural land loans. We couldn’t meet with them in person due to the virus, and we’ve had a hard time borrowing from them because they’ve been busy with pandemic-related PPP loans for businesses. Another issue we had early on pertained to collecting mortgage payments from our borrowers. Many of them were able to pay, but they had heard or read that they didn’t need to pay their mortgage during the pandemic. Fortunately, we were able to work through those issues and get them back on track. On the bright side, rural land has been unbelievably hot over this past year. I’d say that demand for it has been right up there with toilet paper and bicycles. It seems as if everyone wants a little slice of the country these days, and we’re happy to provide that to them.
At Hawthorne Capital, we’re in the business of buying rural land and selling it on owner financing. The entire niche of rural land is hotter than ever right now, but we’re seeing more demand for properties that are about 60 minutes from downtown Houston, as opposed to 90. Many people prefer to live or play in the country, but they don’t want to lose easy access to all that the big city provides. As for the Houston housing market, home sales are hot across the board, but that’s especially true for homes priced at $250,000 or less. There’s a limited supply of those properties, and the demand is high because that price point is within most people’s budget. The high-end market is also doing surprisingly well, in spite of not only the pandemic but also the prolonged downturn in the oil and gas industry. Recent data shows that most high-income earners have not been severely affected by the pandemic, as they’ve been much more able to retain their jobs and transition to remote work. It’s clear that many of them are taking advantage of this good fortune by entering the housing market. Like the buyers at lower price points, they’re also faced with limited supply and thus higher prices.
My company has been fortunate enough to be in real estate, and specifically the rural land business, during the pandemic. As a result, we were able to set several company records. Over the last twelve months, we sold 69 ranchettes comprising 830 acres for a total of $10.7 million. That’s nearly double the $5.9 million in sales from the preceding 12-month period. Even more importantly, we were able to generate $765,000 in returns for our investors, many of whom are LGBTQ+ Houstonians. It’s inevitable that some of those funds will find their way into the coffers of the many organizations that do so much good for our community. —Doug Smith
A combination of reasons contribute to the [rise of] luxury home markets. One main reason is that interest rates are low, allowing for more borrowing power. Buyers are looking for larger homes that have more room, since they are working from home. Buyers want more physical room to spend more time at home with their family. There is a pent-up demand, as many people were waiting to see what happens with COVID. Those who were waiting to make a move are now very ready.
Moving all [office] operations to our homes was initially a challenge. The best outcome was learning how well we work [virtually] together. Our pandemic plan worked well, but we now realize that our technology and hardware needs were not as developed. The [pandemic’s long duration] was not anticipated. We planned for a hurricane or a flood with no electricity, but we did not foresee the longevity of this pandemic. We have learned that we are quite effective at working together with remote home offices. The best outcome is that we have not only survived but thrived, and our relationships are better than ever. I see the rest of the year being steady and consistent, and improving in all ways.
I have really, really enjoyed working from home, and spending more time with family and pets. I became much more productive, and learned how to be resourceful. [I also saved money], as I didn’t go out to restaurants or theaters, and movies, and I didn’t travel. I also learned that I need more hobbies before I retire! —Janet Friedman
The inventory is down across the board—about 45 percent from this time last year. That, coupled with the extremely low interest rates, has created a feeding frenzy of sorts. [I see] multiple-offer scenarios much more frequently.
This past year was the complete opposite of what I thought it was going to be. I thought the whole industry was going to shut down, and it ended up being my best year ever in the business. The challenge was keeping up with the demands of handling so many listings and buyers—69 closings last year, to be exact. Technology has impacted my business in a very positive way. Knowing how to utilize social media has been priceless. It’s something that you can use greatly to your advantage at literally no cost. I think it’s extremely underutilized.
The Heights is hot—you can’t keep something on the market for more than a day! The high end in River Oaks has been very active, as well. It has been really neat to watch. West University, Southampton, and the Museum District are quite active, as per usual.
As for the coming year, I think it’s going to be survival of the fittest. I think that both the inventory and the interest rates are going to remain quite low. The good listings are going to go quickly, and the aggressive buyers are going to win the bids. This is typical Houston real estate—resilient as ever! —Jeremy Fain
My sales are great, mostly thanks to relocating buyers from California. Also, the continued low interest rates mean that loans are enticing, and real estate as an investment is looking good.
We have always utilized technology when it makes sense, and also kept a personal touch when it’s best for our clients. We are now selling homes without the buyers having to make an in-person visit—something I would have discouraged in the past. But now we’ve learned how to make the “virtual visit” experience real and accurate with technology. Going up against multiple offers with other buyers is challenging, but it feels so good when I gather the intel and write the winning offer for my buyers.
Country acreage is hot right now. City buyers are snapping it up for the future. As in past times, a place in the country resonates with buyers during these uncertain times.
Seeing my team members reach and surpass personal business goals is always high on my list as a broker. I also was diagnosed with (and recovered from) breast cancer in 2020. I got a cute new hairdo and lost 20 pounds out of the deal, so I’m feeling better than ever.
My husband, Bob, and I would also like to express our sadness at the recent loss of our friend and fellow Realtor Terri Coffman. She was a great professional and a friend to the community. We will miss her. —Karen Derr
The low mortgage rates are one of the reasons the luxury market has increased. The buyers of these properties are finding their money now has more purchasing power, and they can get more for their money, especially compared to markets in California. I’ve seen very high demand in the suburbs, and vacation properties on the beach and lake. The suburbs are popular because everyone is working from home, and homeowners now realize they need more space. Vacation property is also in high demand since most people are not traveling as they used to.
One of my high points for 2020 was being able to take the time to make care calls to my current and past clients. I did this to let them know I was here for them if they needed a grocery run or anything during the lockdown. This helped me reinforce that they are not just a transaction to me, but friends that I really care about.
2021 will be another record year. The interest rates will tick up, but not enough to impact the demand. Also, oil prices should start to make a comeback, and that is always good for Houston as a whole. —Thomas Phillips
Highly skilled professionals are choosing to call Houston home. The other attribute is the investors who are choosing Houston as the market to buy in. Home prices and rental rates equate to a desirable return on investment for investors in residential and commercial properties.
Technology has allowed the sale of real property to continue with little to no slowdown. Zoom meetings and virtual closings, as well as notaries and wire transfers, have allowed us to continue with business as usual. Virtual tours of homes have become somewhat the norm.
Conroe, and north of Conroe, is selling like wildfire. Texas City is seeing surges in sales, too. All of the Greater Houston area is doing very well, but to see sales growing north of Conroe and south of Clear Lake is a great sign of Houston’s expansion and growth.
I think 2021 will continue as it has been for the last several years. Interest rates at historic lows will keep consumers borrowing. Even if rates went up one or two percent, the market will still continue to grow. Population growth in Texas will keep the housing market humming along. —Tom Eickleberry
In the last month of 2020, we saw a number of million-dollar-plus homes sell in Galveston, and throughout the year sales at all price levels were strong. At Tom’s Galveston Real Estate (TGRE) our 2020 revenue was up over 20 percent from 2019. Analyzing the statistics also shows that Galveston house prices are increasing. From an economic standpoint, there are many contributing factors, including folks valuing the stability of real estate in uncertain times. Galveston has always been a destination town, and from a real-estate perspective we offer houses unlike any others. Our East End Victorians rival San Francisco and Charleston, our Gulf Coast beach cottages are chic and open to nature, and we have downtown lofts and condos where you can walk to art galleries, boutiques, restaurants, and more. Then you have incredible waterfront properties near our beaches and bayous, with amenities that give owners a resort-style lifestyle. During the pandemic, people have been attracted to Galveston because of our beautiful environment and outdoor lifestyle. We have 32 miles of beach, and plenty of bayous where people can easily socially distance while enjoying the beauty and tranquility of nature.
Most of Galveston Island has had strong sales, as people choose different neighborhoods for different reasons. Beach and waterfront property is always popular, but I think more people are starting to appreciate the East End and downtown Galveston due to its walkability and proximity to the beach.
Business has been great, so TGRE can offer a referral service for agents from out of town that provides local expertise. I support more than 50 local nonprofits, and it has been incredible to see the resilience in these organizations and how they’ve helped the community through a tough year. I’m proud of my team at TGRE. We’ve always gone the extra mile for our customers, and in 2020 we rose to all the challenges and helped even more people buy, sell, and lease Galveston. I love my island home, and it’s always a real high point to help people move here. As I always say, those of us lucky enough to live by the sea are lucky enough. —Tom Schwenk
This article appears in the April 2021 edition of OutSmart magazine.