2023 News Archive

The Houston land market was robust in 3Q23 as developers continued to sell sites for master planned communities and commercial development, while speculative land investors kept buying well-placed, large, strategic land tracts. Single-family home sales across the market fell by 10.9% in September 2023 with 6,886 units sold compared to 7,728 units sold in September 2022. Continued market pressure from high interest rates artificially suppresses home sales, and is putting significantly more pressure on commercial real estate transactions for buyers using traditional financing sources. As we head into 4Q23, we expect land sales to continue primarily for residential development with less land trading for commercial development.

The land market in the Houston region picked up in 2Q23 from a slower 1Q23. Single-family home sales fell 12.8% in June 2023 compared to last year; down to 8,542 from 9,845 homes. Developers and homebuilders continue to work through land acquired in 2022 to deliver lots and homes as quickly as possible. Homebuyers are getting more comfortable with interest rates after an extended period without any reprieve in sight, but knowing they will refinance when interest rates improve. The good news is home sales are strong and inventory is falling back into a healthy range of available product. While interest rates remain high, the homebuilding impact on the land market continues to be robust as a result of Houstona€™s strong job market and population growth.

The land market in the Houston region is slowing down following the last decade of incredible growth. Single-family home sales fell 18.3% in March 2023 over last year; down 7,907 in 2023 from 9,693 in 2022. Even though home prices have started to level off in some areas, interest rates are still high making it difficult for many homebuyers. As a result, days on the market in 1Q23 have stretched out and is now taking twice as long to sell a home than it did a year ago. As these pressures have increased, it has slowed homebuilder and developer land sales while starting to close the gap between the bid vs. ask spread. Once inflation slows down and interest rates start dropping, then homebuyer consumer confidence will improve land tract sales and home sales will pick back up.