Are house prices on the up and up or are they already inflated?
Has the provision of a grocery store within the development been priced into the market already? The master development has always included several elements – space allocations on the map for an Elementary school, a Town Center and more recently a distinct market district.
The market district is simply an area anchored by a large grocery store – in our case it will be a HEB. In the heady pioneer days, these were proudly displayed on the model of the development which sits at Mueller Central – the developers office and show off space. So while there has always been a disclaimer at the bottom of all of the illustrative plans, and most of the salespeople at the builders’ offices would point out that this was all subject to change, it was still largely expected to happen – it was just a case of when.
There are no shortage of grocery stores local to Mueller right now – see my previous post about Mueller grocery locations. So what will the difference be in 2013?
All in all the neighborhood will be more fleshed out, and have a greater part of the mixed use aspect filled in.
Does this affect prices now? I would say that the HEB announcement certainly does two things. It gives a concrete date and it shows that a major retailer has confidence that an additional store in an area with several of its own stores already can flourish. So the market is showing confidence in the future of Mueller and it’s projected 10,000 residents. And market confidence is a good thing when you’re a home-seller, as are additional amenities. If you bought your home in 2007, you were buying a dream and a few drawings of a house, so naturally you could expect a big difference in the perceived value now. So that’s the good news.
If you look at the production built homes at Mueller and their recent resale stats, you’ll see that it’s by and large a sellers’ market. Prices have risen substantially in 2011 (I hate to be so non-specific, so I’ll provide some statistics down the road, or you could check a post I wrote about rising values in 2011), and available inventory is low. The market rate new homes released at the end of 2010 have all but sold, so the resale market is faring well.
In such a buoyant market, is there room for prices to increase based on the HEB news? The problem we run into is that three quarters of all home sales at Mueller involve a lender, and the lender’s appraiser will only let buyers borrow based on their assessment of a homes value. If anything I suspect that the dramatic home price increases are going to have to correct at some point, despite changes in real estate fundamentals (low supply, increasing amenities etc). Sellers will keep edging up sales prices until homes can no longer be appraised at the contract price.
In summary, I would say that the HEB news is great and is certainly a good thing for buyer demand, though I can’t see too much more room in sales prices for this to be reflected in sales prices this year. Of course, as a seller it’s always nice to have multiple full price offers to choose from when you sell your home.
Of more interest will be the competition from the planned new homes in 2012, and I’ll cover that in a later post. Get in touch if you want to see what your home’s current market value is, or check sales prices if you’re considering moving here. Failing that, call me on 512.829.1351 and we can talk it through.