Benders Landing and Benders Landing Estates Real Estate Market:
2023 – A Year in Review
Happy 2024 Neighbors and welcome to my 15th annual Benders Real Estate recap! The real estate market has certainly been incredibly exciting to watch the past few years and 2023 proved to be no exception. What a tumultuous year for mortgage rates! When the rates began to increase during the later part of 2022, buyers were hopeful that 2023 would see rates come back down closer to levels we had been accustomed to seeing for the past few years. A vast majority of Economists weren’t quite that optimistic, as most were forecasting a leveling off with rates around 5.2-6.7%.
Bankrate states that the average mortgage rate for 2023 ended up being 6.8%, which also happens to be the 40-year historical average. The rate highs topped 7.95%, which are levels we haven’t seen in over 20 years. With the roller coaster rates and buyers trying to come to grips with these new levels, actual buyer activity, not surprisingly, did decline during 2023. Let’s take a deeper look into those figures below.
Home Sales:
Whether you are contemplating selling your home, want to check the status of your “asset”, or you merely enjoy keeping a pulse on our community, let’s take a look at some of the market statistics/trends over the past five years as outlined in the below chart.
| 2019 | 2020 | 2021 | 2022 | 2023 | |
| Average Days on Market (of homes sold) | 115 | 117 | 70 | 36 | 50 |
| Median home sales price | $731,625 | $755,000 | $932,500 | $1,094,750 | $1,175,000 |
| Avg. sales price/sq ft | $162.95 | $171.94 | $204.52 | $255.00 | $254.66 |
| Homes sold | 114 | 103 | 140 | 102 | 75 |
The median home sales price continued to increase in 2023 to $1,175,000, a 7% increase over the previous year. At first glance, this may allude to increasing home values, but it’s primarily attributed to an increase in the size of homes and improvements to properties (i.e. pools) over the years, leading to higher valued homes as a whole on the market and in our neighborhood. This is further evidenced by the fact that the average sales price/sq ft basically remained unchanged year-over-year at approximately $255/sf.
As mentioned above, mortgage rates had the most significant impact on the real estate market during 2023. The 30-year fixed average mortgage rate in 2020/2021 was approximately 3.0%. The ups and downs (but mostly climbing) rates of 2023, led to an average of nearly 7%. To put this into perspective as to the effect on buyers, let’s examine the impact on actual mortgage payments (not including property taxes and insurance) between these rate averages for an $800k, 30-year fixed loan:
3% = $3,372/mo
7% = $5,322/mo
That’s a $2k/mo difference, which is significant for most families! For anyone financing their home purchase, rates can directly impact home affordability for homeowners. In fact, in 2022, 41% of home sales were homes that sold for $1.3M and higher. In 2023, that percentage went down to 36% in that price band.
The increasing rates also resulted in a significant number of potential buyers electing to pause their home purchase. This is evidenced by the 26% decline in total home sales in 2023 vs 2022. In fact, the 75 homes sold in 2023 is an 11 year low for the neighborhood.
Due to less buyer activity and an increased number of homes on the market, it’s not a surprise that we saw the average days on the market rise from 36 to 50 days, representing a 39% increase. With the longer time on the market, we also started to see more home price reductions, something that did not occur often in 2021 and 2022.
Lot Sales:
The lot market performed similarly to the home market: low overall inventory (8 lots currently for sale, 38% lower than last year), increasing prices (up 15% year-over-year), and an increase in days on the market for lots sold (26 day median vs 12 in 2022). Total lot sales were also very reflective of home sales, down 23% from 2022. However, as we enter 2024, we have seen activity increase, with 4 lots currently under contract.
Real Estate Outlook for 2024:
As we enter 2024, there are signs of a stronger market emerging:
- Rates have dropped slightly to approximately 6.7%. With inflation cooling, it’s speculated that the Federal Reserve will make two to four cuts on their federal funds rates in 2024 of 0.25% each. While there is not necessarily a direct correlation in fund rate decreases and mortgage rates, there is traditionally an indirect impact on what lenders are charging.
- Even though the current number of homes on the market is more than double January of 2023 (16 vs 7), this is much lower than the average of 29 homes since 2018. This is a positive sign for sellers as our neighborhood is still experiencing a relatively low inventory of homes for sale.
- Perhaps the most eye-catching statistic that indicates the health of our local market is actual buyer activity. During the first 4 weeks of January, we have had 8 homes go under contract, compared to a chilly November and December with a combined total of 6 homes under contract.
With the recent and anticipated interest rate reductions, buyers who were sidelined due to the higher rates are now starting to re-enter the market. Most buyers have come to terms with the fact that we will probably not experience mortgage rates of 3-4% again in the near future so they are opting to move forward with purchasing. A good phrase to keep in mind when purchasing, especially in today’s environment, is “Marry the house, Date the rate”! Homeowners can always refinance when, not if, rates drop again.
If you are considering selling your home in 2024, it is extremely beneficial to keep your homes looking as well-maintained as possible. With the higher inventory compared to the last couple of years, buyers are being more selective since there are more options and they tend to have less of a desire for updating. Since some of our homes are nearing the 20-year mark, some of the lesser expensive updates that can be done, yet make a big impact, include fresh paint, new carpet, and updated lighting and plumbing fixtures. Outdoor living also remains a key feature for buyers in our area, especially with families spending more time at home.
As always, let’s continue to take care of our properties and our great community – it benefits us all!
Christine Richards, Benders Resident and Realtor
MBA, ALHS, CHMS
Top Producer 2011-2022
Keller Williams Realty The Woodlands
Cell: 832-866-6122
Christine@richardsrealtygroup.com
www.richardsrealtygroup.com
