Home prices in Katy and West Houston have jumped quite bit from the start of the year.  I’ve been carefully monitoring the rise in real estate prices this year in the Houston area for obvious reasons.  I have home buyers and sellers who need reliable information to navigate this crazy market.  The reflation of the U.S. real estate market has been a spectacle to behold, and here in the Houston area we’re now seeing the consequences of our government’s endless push to prop up the economy under the Fed’s carefully disguised mantra of “stable prices”. Today we found out that existing home sales in the U.S. missed expectations for the 4th month in a row.  We also found out that artificially low inventory which has been keeping home prices afloat is beginning to creep higher.

As I published the latest stats from the Houston area October home sales report I was looking for signs that the market is ready to turn, and I think they have arrived at that point.  As we head into next year, I think it will become apparent that the Katy and West Houston housing markets are in for at least a little consolidation. There’s a reason Houston recently made the top 10 list of the nations most overvalued housing markets….it’s true!  In lieu of additional QE or stimulus, I don’t see how the current gains in home prices will hold.  Much of what is driving current home prices is not organic growth.  In Houston, as in the rest of the country, the reflation of the housing market is a perilous adventure in flawed monetary policy.  I ‘ve added a few new pages to the site with a nice chart reflecting the real cause for our current mini housing bubbles in the Katy and West Houston real estate markets.  As Jim Quinn recently stated, you can Take It To The Bank.

“The notion that if you just leave the markets alone that they will naturally distribute the fruits of our national labor and resources equitably is a corollary of the ‘efficient markets theory.’ It is a fraud, and it is strangling the economy.  But the political and privileged class could care less, because they are the primary beneficiaries of the system which they have substantially helped to create over the past thirty years.” Jesse’s Café

“Trickle-down theory – the less than elegant metaphor that if one feeds the horse enough oats, some will pass through to the road for the sparrows.” John Kenneth Galbraith

You can click on either of the two links below to see the one chart that explains why even our Houston area housing markets are a distorted mess.

Katy TX Housing Bubble

Houston TX Housing Bubble