Greenwood King April Report: Getting a Little Crowded at the Top of the Market

Swamplot readers have a few things to say about Greenwood King’s latest fancy-neighborhood market report, which came out yesterday! Our regular GK watcher notes that the separate breakdowns for new construction and existing home sales introduced in last month’s edition have been abandoned. Still:

The news is relatively bad. Sales volumes are down sharply all over town. 17% more high end listings than last year . . . River Oaks, Tanglewood, Boulevard Oaks, and Memorial Close In are all over 12 months of inventory. . . .

The 17% higher inventory is reflective of a market of motivated sellers. By definition, a high end homeowner should not “have to” sell unless there has been a life change (divorce, death, job interruption). Everyone knows the housing market is weak in 2009, so…. the only class of sellers on the market are those having cash flow problems or those who have to sell due to a life change. There are almost no trade up sellers right now.

Memorial has 19.1 months of inventory

. . . as big $3-5 million white elephants sit there waiting for the landscapers to come and cut the lawn for the week. It takes a good $20,000 a month to live in one of those monsters. I guess the supply of willing millionaires just isn’t going to match the number of mega mansions. It will take some time, but they will soon move onto bank balance sheets and then to the auction block.


The upshot, says our reader: Last month 520 new high-end listings came on the market. And there were a grand total of 98 high-end sales.

This trend needs to reverse itself in May, June, and July, with more sales than listings or we are going to have a bad spring selling season.

2 Comment

  • Welcome to the Platinum Triangle of Houston. River Oaks, Memorial and Tanglewood. More silverplate at the moment than platinum.

    A number of the listings are in “pre-foreclosure” and while they are handled differently than the “pre-foreclosures” in other areas, reality is reality and at some point the gavel will fall along with their “market value.” Sold to the highest bidder. On the steps of the courthouse.

    It’s a shame the city and county can’t use stimulus funds to buy some of the “high-end” foreclosures and flip them for market value while retaining the appraised value on the books the way the city and county are planning to do with the “low-end” foreclosures.

    HCAD is going to get hit with some reality at some point also.

  • This is just showing what is appearing across the country as the great deleveraging goes on.

    The lack of people who can sell their house at a profit and move up to a more expensive one is propagating up the price chain to put pressure on the higher priced market. Even those who can sell at a profit are generally not going to expand their debt with a bigger purchase in the face of rising unemployment. See

    On top of this is a lack of financing for expensive homes since the FHA is only making loans up to $625k.

    And, to add to this, subprime was only the first innings. We are largely through the subprime market collapse, even though the loans haven’t been written off yet. But have about a third of the way to go with shaky prime Alt-A and Jumbo loans made during the bubble years as the loans are recast and payments jump with no option for the borrowers to refinance because the don’t have enough equity.

    As some wit has remarked “We are all subprime now.”