In recent posts, I have focused on the disparity of the Houston real estate market with the declining sales and rising sales price. A report from KHOU TV further demonstrates that disparity of many foreclosures in certain neighborhoods and increasing prices in others. You can view that report at the following link.
http://www.khou.com/video/index.html?nvid=276836&shu=1
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In July 2008, the sales of all of the property types (being single-family homes, condos, vacant lots, etc.) totaled 7,052, which was 12.7 percent less than the same sales for July 2007. The total dollar volume was down 6.7 percent from July 2007. The July 2008 dollar volume was $1.5 bilion vs. the $1.6 billion of 2007.
The good news is the average price is still up there. The average price for a single-family home came in at $226,072. The median price of a single-family home was $161,370, above the July 2007 median price of $160,000.
All in all, we’re not doing too bad. It’s obvious there’s a slow-down, but the overall price is not deteriorating. As usual, some of the Houston markets are hotter than others. If you would like to know how you are doing, give me a call.
*** Data from the Houston Assn of Realtors
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Forbes has designated Houston as the best city for earning a living. In an article written by Matt Woolsey, Houston was recognized because of its dynamic business environment, low unemployment and high wages realtive to income. To read the entire article and find out about other cities mentioned, click on the link below.
http://www.msnbc.msn.com/id/26338142/
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The average price of a single-family home in the Houston market has now reached a new high of $228, 448 according to the sales stats for the month of June 2008 from the Houston Assn of Realtors(HAR). However and once again, we had a month of declining sales. Sales of single-family homes was down 15% vs. a year ago. Year to date, there have been 30,857 single-family homes sold through the month of June, which is down about 13% vs. a year ago. The condo and townhome market followed suit with a higher average price of $179,331, yet total sales volume was also down from 2007. The average number of days on the market improved slightly from 79 days in May to 76 days on the market in June.
According to HAR, some of the milestones reached in June include…..
• Highest average single-family home sales price ($228,448);
• Highest median single-family home sales price ($162,000);
• Highest average sales price for townhouses/condominiums ($179,331);
• Largest number of single-family home sales since August 2007;
• Largest number of townhouse/condominium sales since August 2007;
• Sales of single-family homes below $80,000 rose by 29.3 percent;
• Lowest Days on Market since September 2007.
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The sub-prime loan situation which has had a negative effect on banks, mortgage companies and other lending institutions has also put a financial strain on two of the nations largest suppliers of mortgage funds. I am speaking specifically about the Federal National Mortgage Association (FNMA), better known as Fannie Mae; and the Federal Home Loan Mortgage Corporation (FHLMC), better known as Freddie Mac. Both are considered “secondary market lenders”. Secondary market lenders are companies and investors that actually provide the funds that you borrow when you take out a loan to mortgage your home. You may go to XYZ Home Loan Company, but they are not actually using their own money. Your loan is packaged with other loans and sold to investors in the secondary market.
Fannie Mae was created in 1938 under President Roosevelt to provide a consistent source of mortgage funds across the country and Freddie Mac came along in 1970. Both are publicly traded companies and get their funds from Wall Street and other investors around the world. Fannie and Freddie are two of the biggest source of funds in the secondary market. Freddie Mac just by itself has provided funds for 1 out of every 6 homebuyers.
Recently both companies have suffered a dropoff in their stock value due to worries among investors and bad publicity regarding their solvency. Since the mortgage lending market has already lost many of its players, we can’t afford to lose Fannie and Freddie as well. It is esential in my opinion that we need strong mortgage lenders like Fannie and Freddie to be there to supply funds to the rest of the country when home buying picks up speed again.
Congress is presently working on a housing bill to help slow down the foreclosures and I believe that legislation will be included in the bill to send aid to both Fannie and Freddie. President Bush has now agreed not to veto the bill.
Filed under: Investing, Mortgage and Lending by Dwight's Real Estate Update
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CNBC chooses the top ranked states for Business in 2008 and Texas comes out on top. For more information about this year’s choice and details about the state’s economy, etc, go to the link below and see the video with all the details.
http://www.cnbc.com/id/15840232?video=789947678
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I don’t know how we are doing it, but the average home price keeps rising while sales of single-family homes have fallen again for another month. The average price for a single family home in the Houston area has risen to $214,732. That’s up one percent over the same period last year. Now once again that is in contradiction of the total unit and volume dollar sales over a year ago. The May figures show a 15% decline in total single-family home sales and a 15% decline in the dollar volume from total sales price of single-family homes vs May of 2007. I believe that this was the 9th month in a row of declines, but the totals have improved, because this was the highest number of closed sales since August.
Apparently, the lack of easy financing of zero down mortgages along with tougher requirements to obtain a loan continues to slow down sales. However, people have to have a place to live and that has shown up in the increase of people renting homes instead of buying. The amount of single-family homes being rented is on the rise. Good news for investors.
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Sales of townhomes and condos experienced a comeby in April and reached a median price of $130,000. This was the most sales for townhomes/condos since August 2007 and represented a 5.1% increase over April 2007. The median price is not the average price, but the price in the middle between the lowest price and the highest price. The average price comes from dividing the total of all sales by the number of sales. The average price reached $169,646 which was an increase of 5.7% over April 2007.
April was also a good month for sales of single-family homes. The month of April had the largest number of single-family sales for 2008. Sales of single-family homes below $80,000 continued to rise in April by 27.35%.
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Kiplinger magazine just came out with its list of the 10 best cities to live in. This year’s choices were based on strong economies, abundant jobs, lower cost of living and plenty of fun things to do. Another part of the formula was to highlight cities with a strong past as well as choosing cities posed for future success.
Houston was picked as the “comeback kid”. Back in the late 80’s the price of oil hit a low of $9 a barrel. If you were in Houston then, cheep oil was not a great thing. The local economy went down the tubes and took the real estate market with it. Foreclosures were definitely more abundant back then and the oil business was laying people off left and right.
Obviously, times have changed and the oil business has come back strong. However, that is not the only reason Houston was picked as no. 1. The local economy is now more diversified and we have led the nation in job growth with 100,000 new jobs in 2007. The cost of living here is well below the national average and housing cost is half that of other metro areas the size of Houston.
Houston was also chosen because of its vibrant downtown with the new sports arenas, convention center, parks and rail transit system.
Kiplinger added a nice video to their story. Click on the link below to see it.
http://link.brightcove.com/services/link/bcpid572031303/bclid1571610693/bctid1576242340
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Is now the right time to buy a home? If you can qualify for the loan, have the cash for down payment and closing cost, then the answer is yes. The truth is… it may never be a better time to buy a home in Houston. At a minimum, you should at least be considering it.
If you are listening to the national news about the overall market and think the market is still going south, then you may be misinformed, at least about buying in Houston.
In many areas of the Houston real estate market, there is still an over supply of housing, which means those parts of town are in a buyer’s market. If interest rates start to increase later this year and the excess in housing drys up, then the cost of owning a home will increase. With the rising cost of gasoline, groceries and other items, the cost of living can get out of hand. The cost of fuel is driving up cost in all areas and will drive up the cost of construction of new homes, land development, etc.
You must understand, that I am not someone who can predict the future, but if the Houston economy stays on track, the cost of housing can increase as well as interest rates. In such a situation, you will be buying less house for the same money, if you are in a position to buy at all. If you are interested in becoming a home owner, you need to discuss your situation with a real estate professional.
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