Montgomery County, Texas, Home Values Rose as Much as 200% During the Pandemic. The Correction Could Take Five Years.

Written by:

Eden Godinez

Date:

28 Aug 2026

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Markets that experienced extreme pandemic-era appreciation are not snapping back to equilibrium. In Montgomery County, Texas, the reset is structural, slow-moving, and widely misunderstood by investors expecting a quick rebound.

The Scale of the Problem

When real estate markets began softening in 2023, many observers framed it as a temporary cooling period before the next upswing. Maria Borrego, a Realtor with 20 years of experience in the Montgomery County market, does not share that view. In her assessment, the appreciation that occurred during the pandemic was so extreme that the market is now working through a multi-year normalization with no shortcut available.

“Covid made our property values go up 130%, even 200% in certain areas,” Borrego says. She places the turning point around May 2023, and says the market will continue declining from there.

The numbers illustrate how much inventory has built up. In Conroe alone, there are 1,860 active properties, according to Borrego. Only 2,275 sold in the past six months. Montgomery County contains roughly six cities within a few miles of each other, each with its own pricing dynamics – and all carrying elevated inventory.

Borrego says the only people moving right now are those who have no choice. Renters are being pushed out of investment properties as landlords sell to escape rising property taxes. First-time buyers and discretionary movers are largely sitting still.

Why Interest Rates Are a Tool

Many market participants are waiting for rate cuts as a signal to re-enter, treating high rates as an external obstacle to be waited out. Borrego offers a different interpretation: elevated rates are a deliberate mechanism for managing the pace of price correction.

“It’s going to take at least five years, and that’s what the government’s doing with the higher interest rates – to get it back down to normal pricing,” she says.

If rates are being held elevated to slow appreciation and allow incomes to catch up with values, then waiting for rate cuts before buying may mean waiting until much of the correction has already occurred. Borrego’s current advice to her investor clients reflects this: “Just keep saving money. It’s not time to buy. But next year it’s going to be better.”

That guidance – patient and explicitly tied to a multi-year correction timeline – stands in contrast to the urgency that characterized investor behavior during the 2020-2022 run-up.

The New Baseline

Borrego argues that a full reversal of pandemic-era gains is neither realistic nor desirable. Prices returning to 2019 levels would be economically devastating for homeowners who purchased during the intervening years.

Instead, she expects the market to stabilize at roughly 30% to 35% above 2019 values – a meaningful correction from peak prices while preserving enough equity to avoid widespread distress. “It’s never going to go back to the 2019 prices, but they’re going to try to get it to at least maybe 30% higher than 2019,” she says. “If it actually went down the full 120%, you’re talking about a collapse.”

That projected baseline has direct implications for investors evaluating entry points. Properties purchased at or near 2022 peak values may face years of stagnation. Borrego notes that homeowners who purchased between 2019 and 2025 may sell at a modest profit depending on location – but anyone who bought after 2020 at peak prices could find themselves underwater if they need to sell before the market stabilizes.

What Is Selling and What Is Not

Borrego sees a clear split in Montgomery County. Luxury and waterfront properties above $1 million are still moving relatively quickly. Mid-range inventory in cities like Conroe and Willis is sitting longer. Properties in The Woodlands – which benefits from strong school districts, restaurants, retail, and overall infrastructure – also move faster than the broader county.

“It’s either you’re really rich, or you’re super poor right now,” Borrego says. “That’s just what it is.”

Buyers who are active tend to be more selective because of the volume of available inventory. They want newer roofs, newer HVAC systems, and updated kitchens. New construction competes aggressively by paying closing costs and offering temporarily reduced interest rates – advantages that resale homes cannot easily match.

For sellers, Borrego says pricing realistically from the start is essential. She presents comparable sales data directly to her clients and uses marketing strategies – including broker open houses positioned against competing properties – to demonstrate relative value. Some sellers accept the evidence; others resist, typically those who bought near peak prices and cannot reconcile their purchase price with current market conditions.

Positioning for a Multi-Year Reset

Borrego reads Montgomery County’s fundamentals – low crime, strong school districts, proximity to the Woodlands – as providing a floor that many other Houston-area submarkets lack. For investors willing to wait, she frames the next year as a period for capital preservation rather than aggressive deployment.

Her broader advice to investors: commit to one agent who knows the local market at the block level, rather than chasing off-market deals from multiple sources. “Not every deal is off market because our market has shifted,” she says. “You’re able to get good deals everywhere.”

About the Expert: Maria Borrego is a Realtor with Walzel Properties who has worked in Montgomery County, Texas, for 28 years.

This article is intended for informational purposes only and does not constitute legal, financial, or investment advice. The views and opinions expressed herein reflect those of the individuals quoted and do not represent an endorsement of any company, product, or service mentioned. Readers should conduct their own due diligence and consult qualified professionals before making any investment decisions.