Despite a lingering decline in the price of oil resulting in energy industry layoffs, the housing market in Sugar Land and Missouri City remains healthy, local real estate agents said.
It is still a seller’s market in the area, said Susan Greer, a broker associate with Better Homes and Gardens Real Estate Gary Greene.[totalpoll id="162391"]
“In some areas it’s gotten to be a little bit more balanced, when there is a six-month supply [or inventory] of homes, said Shad Bogany, a broker associate with Better Homes and Gardens Gary Greene and former chairman of the Houston Association of Realtors. That means it would take six months to deplete an inventory of houses if no more homes were put on the market, Bogany said. As of June 7, Sugar Land had 3.7 months of inventory while Missouri City had two months of inventory, according to local housing data provided by Greer.
“The housing market in Fort Bend County has remained strong notwithstanding the decline in oil prices since mid-2014,” said Jeff Wiley, president and CEO of the Fort Bend Economic Development Council. “Title data indicates in 2015 we saw 15,151 transactions in Fort Bend County, including 9,362 resales and 5,764 new home sales.”
He said those numbers are lower than the past two years, but 2015 was still one of the four best years in the past decade.
Protection from a downturn
Between Sugar Land and Missouri City, the median home price remained flat from June 2015 to June 2016 at $287,000, according to the data Greer provided. Individually, the median home price in Sugar Land declined by $11,000 from $327,000 in June 2015 to $316,000 in June 2016, but Missouri City’s median home price increased by $12,000 from $247,000 to $259,000.
Greer attributed the difference between the change of median home prices in the cities to a lack of new construction in Sugar Land and more available new construction in Missouri City.
“There’s no more room left in Sugar Land right now,” Greer said, adding that the Riverstone master-planned community was about the only area with new construction in the city.
Greer said Sugar Land and Missouri City have a bit of a buffer against the oil and gas industry decline, helping to stabilize the market, however.
“We’re seeing more of an impact when you go a little further north, say to Katy, because they are more oil and gas dependent,” Greer said. “Down here we have a lot more of the medical industry population here and so we have a little bit of a buffer. That said, it’s definitely starting to change, and we expect it to keep that way.”
About 30 percent of employees working for the top 24 largest private sector employers in Fort Bend County work in the health care industry, according to data from the Fort Bend EDC.
Alvin San Miguel, the vice president and general manager of Johnson Development’s Sienna Plantation in Missouri City, said a lot of the master-planned community’s buyers work in the medical industry, thus sheltering home sales from problems in the oil industry.
“It’s not that we aren’t affected by the oil pricing that’s happened over the last year or so, but we see it as less of a factor in our sales than perhaps other communities in the Energy Corridor or on the north side of town,” San Miguel said.
Greer said in other areas, layoffs have inhibited home purchases.
Tray Cunningham, a Perry Homes sales consultant for the Stonebrook neighborhood in Riverstone, said the market is faring well right now for builders like Perry. He said for three home inventories in mid-June in the Stonebrook neighborhood, he had 22 people who expressed interest in those homes within two weeks.
He said he does not expect the Riverstone market to change anytime soon with demand remaining high.
“It’s just amazing how you put a house on the market here, and it sells just because there’s an unlimited amount of people who want to get into this neighborhood,” he said.
Looking to the future
Following the November presidential election, interest rates are expected to increase, Bogany said. He said while interest rates are between 4 percent and 5 percent right now, they will likely increase to between 5 percent and 6 percent.
“I have a feeling everything’s going to sit tight until after the election,” he said.
Bogany said normally interest rates increase in May or June because people are buying more, but that has not happened this year.
“I’m encouraging people to be able to purchase now because you just don’t see 3.5, 4, [or] 4.5 [percent] interest rates,” he said.
In a seller’s market such as Sugar Land and Missouri City’s, home inventory is low.[/caption]
Cunningham said an increase in interest rates by a one-quarter or one-half percent would likely not affect his customer base in Riverstone with homes priced between $300,000 and $450,000, but a larger rate increase could.
While still healthy despite the oil industry decline, the market might remain about the same for a little while, Greer said.
“We don’t see that the market is going to be picking up significantly anytime soon, and it will probably go down a bit more before it comes back up,” she said.