While Galveston has been one of the most stable real estate markets in the Houston area, the single-family home market is starting to show signs of trouble.
Real estate professionals say the number of people buying second homes or properties for short-term rentals has dropped significantly to essentially none, the Houston Business Journal reported.
The island had the strongest real estate market in the Houston area during the Covid-19 pandemic, but now, with rising interest rates, listing agents are having a harder time finding buyers.
“Once the interest rates spiked up, … the second-home buyers went silent,” Compass Real Estate agent Amy Chance told the outlet. “So we’re struggling right now in Galveston.”
From 2019 to 2021, single-family home sales on the island increased 29 percent from 720 to 930, according to the Houston Association of Realtors. The Greater Houston region, which includes Galveston, saw an increase of 23 percent over the same period.
Another Realtor, Andrea Sunseri with Galveston-based Sun ‘N Sea Properties said the island’s views of the Gulf Coast brought in buyers who wanted to work from a home with a beach view.
“We were seeing houses coming on the market that were flying off the shelves,” Sunseri told the outlet. “You would see multiple, multiple offers on the homes, and many times they sold for considerably higher than the list price.”
Now the market has shifted. As of November 2022 Realtors sold a total of 830 homes in the year. That number is still higher than pre-pandemic levels, but the lowest since 2020.
One of the contributing factors is the still-rising home prices. As of November, the median sale price for a single-family home in Galveston was $520,000, almost 65 percent higher than the $316,000 average in 2019.
— Victoria Pruitt