Katy Housing Market Booms with Low Inventory, Multiple Offers on Homes

KATY MAGAZINE NEWS

February 10, 2021

By Natalie Cook Clark

Even during a pandemic, the Katy-area real estate boom from last year is continuing into 2021. With a seller’s market, many Katy families are taking advantage of low interest rates to upsize for more yard space or to add that home gym.

Photo courtesy: Cinco Ranch Realty Group

Katy Realty Busy in Pandemic

While many industries continue to suffer through the ongoing pandemic, Katy real estate agents are staying busy with big trends that show the high demand in today’s market.

“The real estate market has continued to remain hot because of the all-time low interest rates, low inventory, and opportunity for people to relocate into the suburbs for more space in terms of yard and square footage,” says Amy Lookabaugh, owner of Cinco Ranch Realty Group.

“We currently have a seller’s market and multiple offer situations are the new norm,” says Lookabaugh.

Due to the high demand for houses and a low interest rate, realtors agree it’s a good time to sell.

“Sellers are getting multiple offers, often over the list price on their home as inventory is incredibly low,” says Kerri Schultz, a Katy agent with Keller Williams Premier Realty.

Bidding Wars in Highly Competitive Market

This is such a strong seller’s market that often times people are losing out to homes they want in highly competitive bidding wars.

Erica Lytle Stietenroth, an agent with Keller Williams Premier, recently had a client lose out on a bid even though he offered $35K over the listing price and waived the appraisal. Everything in the contract would have been at the buyer’s expense and they still lost to a competitive market.

“Every situation has had a minimum of seven offers and the last one we were told there were 26 offers,” says Stietenroth. “The competition is pulling every string and taking high risk moves to win.”

Stietenroth calls when a client loses a bid to learn what could have been differently and to stay up on the ever-changing trends.

“In this market we’re seeing people completely waive appraisal contingencies as outlines in the 3rd party financing addendum,” says Stietenroth. “which means if the house is under contract for $400K and only appraises at $380K that the buyer is saying they’ll make up the difference in cash to close.”

To close, buyers are offering $10K to $40K higher than the listing price.

Stietenroth is the Founder and Owner The Integrated Agent, a real estate coaching company.

She is seeing a lot of these trends being driven by out of state buyers from places like Illinois, California, and New York.

Photo courtesy: Cinco Ranch Realty Group

Pandemic Moves Families toward Change

Many Katy families are using the pandemic as a time to make a change.

“Families who are considering selling and upsizing in the next few years have chosen to take advantage of this amazing seller’s market to list sooner than anticipated,” says Lookabaugh.

“Families that live in Katy are upsizing to a home with more yard space or that extra bedroom for their home gym,” says Lookabaugh.

Families continue to relocate to Texas and Katy. “We have many ‘work from home’ families moving here from out of state and are pleasantly surprised by how much home you get for your money in Texas,” says Lookabaugh.

A lot of families are also moving to the suburbs or out to the country for some acreage.

New Construction Viable Option in Market and Katy

Since inventory is low, many families are taking the time to build their dream home. Katy offers new development options such as Elyson, north of I-10 at Grand Parkway and 529.

“New construction costs are increasing as well,” says Schultz. Often this is the case because of an increase in lumber costs for builders.

What is Causing this Market?

Stietenroth says the current market situation is due to a combination of things from low interest rates, some sellers not wanting to sell because of COVID and not wanting people in their homes. Families are also using their space differently during the pandemic and that is inspiring people to want to move.

"It's a great time to sell," says Stietenroth. "Then you have to buy and this is your competition now, but you can't sell high and buy low and vice versa."

Lookabaugh advises families moving to Katy to go through an experienced agent who can consult on their needs and plan their real estate goals.

“Be comfortable with listing and get the best price there is, but be prepared to live in temporary housing so you don’t have to settle,” advises Shultz.

Families relocating to Katy can easily connect with community groups, organizations and get their questions answered by visiting the Katy Newcomers and Friends Facebook Group.

“Not even a devastating global pandemic could stop the Houston real estate market from shattering records as it crossed the finish line in 2020,” says Lookabaugh. “We are seeing the same trends in 2021.”