“The Woodlands is always more insulated than the rest of our area; however, we are seeing [lower sale prices] happen, especially under $1 million, because their price is affected more by the [interest] rates,” said Haley Garcia, broker associate for the Haley Garcia Group in The Woodlands. “Where it is not affecting things is in luxury market or cash buyers. The only challenge there is the lack of inventory.”
According to information from the Houston Association of Realtors as of May, the number of single-family homes sold in the Houston region in the first five months of the year in 2022 was 42,199, the highest number in the years tracked since 2014. In 2023, that was down to 34,149, which was above prepandemic levels but still below the 2021-22 numbers. And while the median home price for May was down from $350,900 to $340,095, it was still well above the prepandemic median of $250,000 in 2019, according to HAR.
In The Woodlands, median prices year over year in May were down in six out of seven ZIP codes, according to information provided by Beth Ferester of Corcoran Ferester Realty. However, median prices were as high as $526,700 in the 77382 ZIP code, nearly $200,000 higher than the regional median for the month.
Ferester also said cash buyers are a consideration in The Woodlands.
“In The Woodlands, we have more higher-end buyers, and a lot of them, I would say, at least 25%-30% of them pay cash.”
Adam Perdue, a research economist with the Texas Real Estate Research Center at Texas A&M University, said interest rates led to the boom in 2021 and have contributed to sale and prices leveling off in 2023.
“The interest rate cut from 3.75%, which is what you would get at the end of 2019, to as low as 2.7% at the end of 2020. [That] gave everyone a 17% increase in purchasing power,” Perdue said. “People thinking of buying homes already decide to do that, and they had a massive increase in purchasing power, so they bought bigger homes.”
Perdue said that increase was not sustainable, although in communities such as The Woodlands where home prices are generally higher and cash sales are more common, the market is different from Houston overall.
Ferester said in some parts of The Woodlands, higher prices are no deterrent to sales.
“There is a ceiling you can get to, but there are pockets in The Woodlands, like East Shore and parts of Creekside [Park], Liberty Branch, where there’s no ceiling,” Ferester said.
