Texas is still growing.  There are more people moving into the state than moving out.  The reasons include a good economy and a lower cost of living.  We also have a better business climate.

According to a report by the U.S. Congress Joint Economic Committee, Texas is one of five states that added manufacturing jobs each month from January to June of this year. In the first six months, private sector employment has grown 1.6% in Texas per the JEC.

The unemployment rate in Texas was 8.2 percent in June 2010, up 3.8 percentage points from December 2007, but down from its most recent peak of 8.3 percent reached in May 2010.  Nationally, it’s around 9.5%.

According to an article published by the Texas A&M Real Estate Center, Texas ranks 4th in the country with the least amount of state debt.  Also, Texas has 4 cities in the Milken Institute’s index of Top Five Best Performing Cities.

TV Station CNBC aka www.cnbc.com just completed a study of the best states to do business in and we did it again.  They ranked Texas in first place.

Considering the shape of things in the national economy, I’m definitely glad to be in Texas.

The main reason for the stable pricing is that the balance of supply and demand stayed in check.  As demand has been reduced over the last couple of years, the inventory of homes both new and resale has also been reduced.  The inventory of active listings for sale fell below 7 months to the 5-6 month range and stayed below the national average for most of the year.  Starting off the new year, the current level of single family hmes is probably under the 5 month level.

Another reason for stable home demand in 2009 was the low interest rates which remained below 6% for the year.  The $8,000 tax credit also created an uptick in the sales figures.

The effect of the foreclosures in our market definitely help increase the number of homes sold, but probably did little to boost the rise in the average price since most foreclosures were under the $150,000 range.  In fact the median price of foreclosures in December was $89,900.  I don’t have an exact figure for the number of foreclosures that sold in 2009, but I believe it was in the 20% range for single family homes.  This information was based on the press release from HAR and other sources.

If there is any good news here, it’s that things could be worse.  Due to short sales and loan modifications, the amount of foreclosures is not as high as it could be.  Actually the foreclosure filings in Texas for November only accounted for 4% of the 306,627 filings reported nationwide for the month according to Realty Trac.

In the Houston area market, there have been over 11,000 single family home foreclosures sold through the Houston MLS.  That’s about 20% of all the single family homes sold in the area during 2009.  More than 80% of the foreclosures were in homes priced under $150,000.  Just a note here.  Don’t confuse or compare the number of filings with the homes that sold.  Filings means homes that were posted at the courthouse to go into foreclosure.  The homes that sold were homes that had already gone through the foreclosure process anywhere from a few months to a year(or more) ago.  The time it takes to go from foreclosure to going up for sale to the public can differ from house to house.  Some homes can set vacant for quite a time after foreclosure while title problems, etc. get cleared up.

Foreclosures will always be with us in good times and bad.  We are expected to see more coming on the market throughout 2010.  For a current list of foreclosed properties, feel free to contact me.

In case you are a little short on cash to cover the down payment, there may be some help from the Texas Department of Housing and Community Affairs. It seems they have a short term loan program that will extend a short term loan to you for most of the $8,000 until you get it back from Uncle Sam. Go to their site at MyFirstTexasHome.com to get all the details.

Now if you are wondering how you get the tax credit and if you qualify, you need to see your own tax professional. The NAHB also has an informative site at www.federalhousingtaxcredit.com

According to the Texas Comptroller’s office, both the U.S. and Texas economies have contracted in 2009, but Texas continues to perform relatively better than the nation. The Comptroller’s office estimates that the Texas gross state product will contract by 1.7 percent during calendar 2009 and that the U.S. economy will shrink even more, by 2.8 percent for the year

There are still some problems in home financing these days, but this definitely helps.  If rates will stay low, it will help more people afford a home.  As I keep saying, it’s a heck of a time to be home shopping.

The good news is the change where the new tax credit does not have to be paid back.

Now as to all the rules and particulars, I fully recommend that you seek proper tax guidance from a tax professional.  My expertise comes in helping you find the home to purchase before December 1st.

The kicker is, you have to have a loan backed by Fannie Mae or Freddie Mac, which means this program will eliminate some of you from modifying your loan or refinancing under this program. Also, you have to participate in this program before June 2010 when the program expires.

You can get the lowdown on this program at http://www.makinghomeaffordable.gov.  There’s also information there to help you determine in you have a Fannie or Freddie loan. If your loan is not of this type and you still have questions, give me a call.