Katy Real Estate Market

Real Estate Terminology

Buyer’s Market vs. Seller’s Market

The  real estate market is constantly changing. The way we determine the type of real estate market we’re in (Buyer’s Market vs. Seller’s Market) is based on the amount of Inventory (homes available for sale) currently available. Six months of inventory is usually considered “equilibrium” —neither a Seller’s or Buyer’s Market. A Buyer’s Market is considered to be 7 months or more of inventory. This is where the demand for homes is somewhat less than the supply of homes and when Buyers may have more control over house prices than Sellers. A Seller’s Market is considered to be 5 months or less of inventory.  This is where the demand for homes is somewhat greater than the supply of homes and when Sellers may have more control over house prices than Buyers.

Months of Inventory

Months of Inventory refers to the number of months it would take to sell all of the currently listed homes on the market, with no new homes being added. This may also be called the “Absorption Rate” because it is the rate in which houses are “absorbed” in the current market. Generally speaking, if Inventory is greater than 6 months, then it is a “Buyers Market,” and if Inventory is less than 6 months, then it is a “Sellers Market.”

Months of Inventory =

# Active on the Market

(# Sold in Past 12 mths  ¸ 12 mths)

Cumulative Days On Market

How long it takes to sell homes can be a good indicator for “how’s the market”? The longer it takes to sell homes, on average, the slower the market. So if the cumulative number of Days on Market is increasing, then the market may be slowing down, and if CDOM is decreasing, then the market may be speeding up.

“Days on Market” refers to the days a specific home listing has been on the MLS. If the real estate agent Terminates the listing and then relists it with a new MLS number, then the DOM resets. However, the Cumulative Days On Market should show the total Days on Market for that particular home, regardless of the number of time it is terminated and relisted by one or more real estate agents.

Keep in mind that areas with lower-priced homes will usually sell faster than luxury-priced areas, because the more affordable the home’s price, the larger the number of potential buyers, and the quicker it can sell.

Median Price

Median Price is not the same as the Average Price; it is the middle point for real estate prices. The Median Price is the price in the middle of all the sales prices for a certain time-period, with exactly half of the houses priced for less and half priced for more.

It is generally believed that the Median Price is the best indicator for market activity because it is less affected by abnormally low prices or high prices (which skew the Average Price).


Overall Real Estate Market Data for 2021

The following data is for single-family properties Sold from January 1 to December 31, 2021. Keep in mind that # Active fluctuates daily and this report was put together in January 2022. The CDOM is the Median “Cumulative Days on Market.”

 

Area

ZIP

# Active

# Sold

CDOM

Median Price

Lowest Price

Highest Price

Months of Inventory*

Southwest 77494

77494

80

2755

6

$404,000

$150,000

$1,700,000

0.3

Northwest 77493

77493

142

1941

10

$325,000

$136,000

$1,350,000

0.9

Southeast 77450

77450

40

1208

7

$340,000

$134,000

$2,100,000

0.4

Southwest 77441

77441

133

888

14

$474,000

$205,000

$2,400,000

1.8

Northeast 77449

77449

33

861

6

$252,000

$120,000

$646,000

0.5

Southwest 77423

77423

66

540

14

$326,000

$85,000

$760,000

1.5

Northeast 77084

77084

53

513

6

$240,000

$125,000

$1,000,000

1.2

Southeast 77094

77094

6

162

11

$450,000

$221,000

$1,850,000

0.4

*Severe Housing Shortage: We should have 3-6 Months of Inventory in most of our Katy neighborhoods. With less than 1 Month of Inventory, we are is a HOT “Sellers Market” and buyers will have to pay top-dollar and request very little extra costs in order to “win” in a multi-offer situations. Make sure you line up a Strong Pre-APPROVAL letter with a good lender as part of your offer package.


Katy Real Estate Market Report 2022

The Katy Real Estate Market changes every month. To see recent data on the 10-year price trends, Days on Market, sales volume, months of inventory, and more, then DOWNLOAD the FREE  Katy Real Estate Market Report!

This information is not available on this website. 

Last update: January 2022

Download the FREE Report

Sales & Price Trends per
ZIP Code and Neighborhood

katy real estate market report

 

Includes Real Estate Market Data That You Won’t Find Anywhere Else!


What’s Included

  • Ten-year trend of median sales prices by ZIP Code and neighborhood…so you have a baseline in determining a home value.
  • Ten-year trend of sales volume by ZIP Code and neighborhood…so you can see which are the most popular neighborhoods.
  • Ten-year trend of median Days on Market by ZIP Code and neighborhood…so you can see how long it takes to sell a home in each area.
  • List of the most popular neighborhoods in the Katy area…see what neighborhoods are HOT!
  • List of the neighborhoods by price (high to low) in the Katy area.
  • Detailed market data on the most popular Katy neighborhoods

 

 

 

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Beware of Internet Real Estate Statistics

The bottom line: No one knows an area better than a local, experienced real estate agent. Don’t gamble your biggest investment on automated Internet data.

It’s Not All About the ZIP Code…Or Shouldn’t Be

I love the Internet and I’m an information junkie, but I am constantly amazed at how WRONG the real estate info presented on the internet is for my area: Katy TX. Katy is a large city (population 250,000+) located in in Fort Bend County, just west of Houston TX. Like all cities of its size…some parts are very different than other parts…it is not completely homogeneous. Furthermore, it consists of multiple ZIP Codes: 77450, 77494, 77493, and 77449. And, Katy is adjacent to Houston, Fulshear, and Richmond as well. So you can live in the Katy area but technically have a Houston address.

What really “bugs” me about the data available on the Internet is that most websites use ZIP Codes to determine demographics and “city data.” But you can’t do that accurately in Katy since it has multiple ZIP Codes. And to complicate matters, Katy is divided into multiple master planned neighborhoods and each of those may be split into multiple subdivisions. For example, Cinco Ranch consists of over 50 subdivisions. So you can have multiple neighborhoods and subdivisions within the same ZIP Code, but let me assure you that the demographics and average income for homes in Avalon Seven Meadows is drastically different than those in Falcon Landing (two subdivisions in the same ZIP Code).

Here are some examples that “bug” me. I’m using information for the nearby Sugar Land TX area, but you get the idea…

At the time the above data was posted on the Internet, I checked the Multiple Listing Service (MLS) database which reported a median list price at $329,000…not $349,440 (as shown above). And besides that…I assure you that we have many subdivisions in Katy where you can purchase a home for much less than that price! Or much more! So what’s the point of this information? And the “median” for 77478 is probably not accurate for a specific home in a specific subdivision.

From MLS

NOTE: Home prices are a constantly moving target…even within the same subdivision. The averages, medians, and such change monthly…depending on current market activity. You have to evaluate the value of a home at the time you are making a purchase. (Which is one of the main services that a real estate agent should provide.) Home appraisals are professional opinions only and are typically only considered accurate for six months.

 

Neighborhoods Need to Be Properly Defined

At least NeighborhoodScout is trying to look at the neighborhood level (see below)…but they fail miserably. The sections they have segmented are not actual Sugar Land neighborhoods…some sections contain multiple neighborhoods…so the data can’t be applicable for a specific home or subdivision. For example, if you click the area that is supposed to be for Telfair, you will see it includes part of First Colony and those subdivisions are zoned to different schools than Telfair. (And trust me when I tell you that schools are one of the most important variables in determining home values in our area!)

 

Inaccurate Data Misleads People

Here’s my least favorite source of data (city-data)…notice they report only 9 registered sex offenders in all of 77479. We wish!

FamilyWatchDog reports and maps 64 (unfortunately)!

I REALLY don’t like most of the info on city-data because it reports information from any unknowledgeable “joe” who wants to put it up there. For example, I searched for “telfair sugar land demographics” on Google and the top entry was a city-data thread. In it, various and misleading demographics were reported…

  
  Not accurate at all!

 

FBISD also consists of Houston addresses…not at all accurate stats for Sugar Land.

I think the City of Sugar Land has the best info on actual demographics for the city…they are getting it from the census data.

 

Each Neighborhood and Subdivision is Unique

The hard fact is that you can’t really get accurate census type data at the neighborhood or subdivision level. Relying on the data for an entire ZIP Code in our area may be very misleading when it comes to the neighbors you will eventually live next to. The best alternative is to look at the demographics for the Katy schools to which a home is zoned.

 

Only an Experienced Local Real Estate Agent Can Narrow and Focus Your Search

So if you are a home buyer in the Katy area, you really need the guided expertise of a local real estate agent you can trust to help you buy a home in the RIGHT neighborhood at the RIGHT price. No online searches available to the general public–including HAR.com, Trulia, Zillow, Homes.com–none of them will allow you to do the complicated and focused searches that a real estate agent can perform. Today (March 1, 2018) there are approximately 1291 active listings in Katy reported on the MLS. Do you want to sort through all of them or do you want to focus on the top 50 that most closely match your requirements? 

 

Most Online Real Estate Pricing Data is Not Entirely Accurate and Should Not Be Relied Upon

Let me add that Texas is one of the few non-disclose states. That means that real estate data is not public information…so the online companies like Zillow and Trulia don’t have access to real data. They use tax appraisal values which are usually lower than actual home values. So don’t rely on them! And since online companies can’t get the real MLS data, they report erroneous information. Here’s an example…

Here’s the data reported on Redfin on October 15, 2013…which says it is for the last 90 days and focused on one of our most popular neighborhoods: Telfair.

I ran the sales history on the MLS for the last 90 days, and got the following data. 
The top box is for Active Listings and the bottom box is for Sold properties.

So let’s look at the differences…

  Redfin Reported MLS Reported
Median List Price $502,946 $507,440
Median $/Sq Ft $143 List = $143.68 but 
Sold = $133.28!
Median Sale/List 96.5% 97%
Avg # Offers 1.0 No way to know!
Avg Down Payment 20% No way to know!
# Sold Homes 48 54

 

My first complaint is that two reported variables are almost impossible to determine: Avg # Offers and Avg Down Payment.Agents do not report the number of offers on a home. They only have to report an offer when it is accepted and goes “Option Pending” or “Pending” (and sometimes they don’t even do that.) So that variable is completely unreliable and shouldn’t be reported at all.

The Avg Down Payment bothers me too. Agents are supposed to report that number at Closing (when a house sells), but you would have to look at every single transaction (54 over the past 90 days) to record those numbers. I don’t see how Redfin could automate that for every neighborhood…so I don’t trust that number either.

Notice the Median List Price is off by $4,500 and the # Sold Homes is off by 12.5 percent. Also, they report the Median $/SqFt for List Price only…but notice that the SOLD SalesPrice$/SqFt is $10.40 less! So if a buyer used the number Redfin reported to price a 3000sf home, that could have led to the buyer overpaying by $31,200!

NOTE: It really doesn’t matter what the median list price is for a neighborhood…only the sales price should be used to price a home you want to purchase.

And then that gets me into a price discussion which is too complicated to address here. But let me point out that this the median SalesPrice/SqFt and the house you may want to buy could be an above-average home or a below-average home. Do you want to pay the average price for a below-average home? Do you think a seller will accept an average price for an above-average home? The best way to get an accurate view of the value of a specific home at a certain time is to hire a professional appraiser or to engage a really good real estate agent. Not all real estate agents are good at pricing homes…you need a PRO!

 

Even Zillow Admits They Are Not That Accurate in the Houston Area

Just go to https://www.zillow.com/zestimate/#acc and see what Zillow says about it’s own accuracy.

 

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