Is Now the Time to Invest in Real Estate?

January 8, 2010

I always liked being the center of attention, even as a kid in my grandfather’s restaurant where I frequently accompanied the piano player – probably to the chagrin of those trying to enjoy their food.

I still get the same attention now – without the singing, mind you –  because my business is the business of real estate. When anyone finds out I am a Realtor, the subject of conversation invariably hits on “How is our market?”. I love this, of course, because it is one of my favorite subjects.

In reading today’s Tycoon Report, I came across a blog addressing real estate in Florida and how the economic indicators point to NOW as a terrific time to get off the sidelines and hit the field.

One thing you will note in this article is that the author addresses investment to “hold and lease” – much different from Speculation – which is the type of investing that got us into so much trouble. If you purchase property or any investment for that matter in anticipation of earning money from the short term sale of that property – you are a speculator. While in some areas of the country that gambit has paid off, most have seen  their dreams of instant wealth vanish before their eyes. I am still amazed at people that lost money through investments during the dot.com debacle with the attitude of “easy come/easy go” but when the same thing happened in real estate, they were shocked and felt that they “were done wrong” by some entity and should be “bailed out”. Why did they expect protections for speculating in real estate that they did not expect for stocks? Gambling is gambling, no matter what you wish to call it. While I love a go at the Craps tables occasionally, I promise you that the Pit Boss is not going to give my money back just because I do not know what I am doing!

Let’s take a look at real estate as a true investment without the specter of Speculation hanging over our heads. Purchasing a property to hold and lease no longer takes into account the sole expectation that the property will appreciate (there are no guarantees in this world) but sets the expectation for a reasonable rental income (backed up by factual past rental data for that particular type of property and area) and then perhaps the hope of some accrual of appreciation at the end of the life of that investment (icing on the cake but not the batter itself).

Self-Directed IRA’s could be a good way to fund your investment but you need to know that this is heavily regulated and you would not want to make an improper move that would endanger your IRA protections. I would talk to a Self-Directed IRA specialist before moving in this direction. Also note the words “Self-Directed”, meaning you need to know what you are doing. Hire a professional Realtor to assist with finding the best properties to meet your investment goals. Word of caution: Do not be tempted to jump on the latest Foreclosure just because it looks like a “deal”. There are many factors that go into finding a viable leasehold investment and “deal” is not at the top of that list.

All in all, now is a terrific time to investigate real estate as a long-term investment to add to your diverse financial portfolio. Good Luck!


Prudential Gary Greene, Realtors out-performs them all!

August 7, 2009
2009 May YTD Company Market Share Rankings in Houston MLS

 

 

Houston MLS Company Ranking Report of Listings- 2009  
Category: Single Family, Townhouse/Condo, Lots, Multi-Family, Country Homes/Acreage, Mid/Hi-Rise Condo
Current Active Listings by Company – All Areas – May 2009  
   
Rank Company Name # of Listings Listing Volume Average List Price % Total 
1 Prudential Gary Greene, Realtors® 2282 $745,821,743.00 $326,828.00 4.95
2 Coldwell Banker United, Realtors® 1683 $563,228,998.00 $334,657.00 3.65
3 Realty Associates 1424 $269,923,120.00 $189,552.00 3.09
4 Martha Turner Properties 753 $735,339,938.00 $976,547.00 1.63
5 Keller Williams Realty Conroe 752 $162,433,127.00 $216,001.00 1.63
6 Heritage Texas Properties 641 $286,029,554.00 $446,223.00 1.39
7 Realm Real Estate Professional 630 $174,377,582.00 $276,789.00 1.37
8 Keller Williams Realty – Woodlands 606 $198,660,051.00 $327,821.00 1.31
9 Keller Williams Realty – Metro 518 $240,267,249.00 $463,836.00 1.12
10 RE/MAX Northwest, REALTORS 467 $100,833,861.00 $215,918.00 1.01

 

Houston MLS Total Listings Sold Ranking Report  
Category: Single Family, Townhouse/Condo, Lots, Multi-Family, Country Homes/Acreage, Mid/Hi-Rise Condo
Total Listings Sold Homes YTD through May 2009 by Company – Ranked by Dollar Volume Sold    
Closed Date Range: 1/1/2009 to 5/31/2009 – ALL AREAS    
           
Rank Company Name Total Listings Sold YTD Total Dollar Volume Sold Average % Total 
1 Prudential Gary Greene, Realtors® 1098 $228,578,370.00 $208,177.00 4.89
2 Coldwell Banker United, Realtors® 928 $204,913,146.00 $220,811.00 4.13
3 Realty Associates 592 $80,386,209.00 $135,787.00 2.64
4 RE/MAX Fry Road 468 $83,636,496.00 $178,710.00 2.08
5 Heritage Texas Properties 373 $101,938,393.00 $273,293.00 1.66
6 Martha Turner Properties 312 $170,738,492.00 $547,238.00 1.39
7 Perry Development Management 307 $83,215,830.00 $271,061.00 1.37
8 Keller Williams Realty 306 $60,728,769.00 $198,460.00 1.36
9 RE/MAX Cinco Ranch 302 $50,711,485.00 $167,918.00 1.34
10 Realm Real Estate Professional 299 $51,137,744.00 $171,029.00 1.33
           

 

Houston Multiple Listing Ranking Report May YTD 2009  
Total Sales and Volume Sold by Company YTD  
Category: Single Family, Townhouse/Condo, Lots, Multi-Family, Country Homes/Acreage, Mid/Hi-Rise Condo
Closed Date Range: 1/1/2009 to 5/31/2009 – ALL AREAS    
           
Rank Company Name Total # Sales YTD Volume Average % Total 
1 Prudential Gary Greene, Realtors® 2210 $467,562,459.00 $211,545.00 5.6
2 Coldwell Banker United, Realtors® 1939 $425,500,777.00 $219,499.00 5.1
3 Martha Turner Properties 564 $294,346,949.00 $518,873.00 3.53
4 Greenwood King Properties 379 $227,546,757.00 $600,398.00 2.73
5 Realty Associates 1575 $223,552,109.00 $140,714.00 2.68
6 Heritage Texas Properties 709 $202,398,412.00 $286,140.00 2.43
7 John Daugherty, Realtors 304 $182,600,583.00 $588,862.00 2.19
8 Keller Williams Realty 827 $160,884,126.00 $195,348.00 1.93
9 Keller Williams Realty 517 $130,078,485.00 $252,200.00 1.56
10 Realm Real Estate Professional 721 $121,347,937.00 $168,701.00 1.45
           

 


HOUSING RESCUE PROGRAM DETAILS RELEASED

March 6, 2009

– President Obama earlier this week unveiled details of his home loan aid plan designed to help millions of Americans who are at risk of losing their homes.

Administration officials say the Homeowner Affordability and Stability Plan could help nearly nine million households restructure or refinance their mortgages to avoid foreclosure.

The plan includes a $75 billion homeowner stability initiative that targets at-risk homeowners, many of whom have adjustable-rate mortgages that have increased house payments to as much as 50 percent of their monthly incomes.

This initiative offers cash incentives to lenders and borrowers for working out loan modification agreements that result in lower monthly mortgage payments and allow homeowners to keep their homes. Any bank that receives federal money under the Treasury Department’s $700 billion financial rescue program will be required to take part.

Another component of the plan is intended to help as many as five million responsible homeowners who took out conforming loans owned or guaranteed by Fannie Mae or Freddie Mac to refinance through those institutions.

To finance that effort, the Treasury is providing the two companies with up to $200 billion in capital on top of $200 billion that it had already pledged to them.

“This is not going to save every person’s home,” said White House spokesman Robert Gibbs. “The plan is not intended to . . . augment somebody’s loan for a house that they couldn’t afford under any economic situation, good or bad.”

According to the latest data from the Mortgage Bankers Association, nearly 12 percent of homeowners — a record 5.4 million — were at least one month late or in foreclosure at the end of last year.

New York Times/Associated Press


Buying Real Estate in Houston? Yes, Virginia… its a great idea!

February 11, 2009

5-10 years from now when the financial crisis has ended and housing prices are up once more, we will look in the rear view mirror and realize that we missed the golden age for buying the dream home or being the “first time home buyer”. 

Smart people say, that moment of knowing we have hit rock bottom is only indicated by the time when everyone is the most pessimistic. That moment is certainly getting closer. 

“Smart buyers are buying now.” Why?

1.       We are in the midst of the best interest rates we have seen since we are told, the 1950’s! 4.5% is an amazing rate to lock in for 30 yrs! Jumbo loans at 7%!

2.       Sellers are watching the national news and know they are not in the driver’s seat right now so they are willing to negotiate. Even though we are not in a depressed or declining market, the sellers watch national news stories that say otherwise. Buyers can take advantage of the negative mindset of the seller right now about his property not moving fast enough.

Facts:
National employment 3rd qtr 2008, down 500,000 vs. Houston employment at 60,000 new jobs. 

Stable pricing is between 6-7 months of inventory according to A&M Research Center and Metrostudy. Same period facts of 3rd qtr. 2008, 6.5 months of new home supply in the market according to MLS and MetroStudy. 

State Resale Supply Statistics

State/City Months Supply
South Florida 28 Months
Chicago 15 Months
Atlanta and Phoenix 13 Months
Charlotte and San Diego 10 Months
Santa Fe, Albuquerque 9 months
Colorado Springs and Raleigh Durham 8 months
San Antonio 7.5 months
Dallas Forth Worth and Houston 6.5 months
Austin 5.5 months
Sacramento 5 months


I hit the largest cities and within these stats we have Raleigh and Charlotte in top 10 Recession Proof cities in the Nation and so is Houston, DFW, Austin, San Antonio but our inventory of homes is smaller.

Texas Markets 2008 through 3rd qtr. overall appreciation metrostudy
Austin: 5%
Houston: 4.4%
San Antonio: 4%
Forth Worth: 3.1%
Dallas: 2.1%

Where are you doing business?

10 year average home appreciation for Houston: 5.31%. Houston does not have the huge appreciation but it is not a depreciating market.

Multi-Market Closings for New Homes by Annual Closings

City Annual Closings
Colorado Springs less than 3,000
Santa Fe 4,000
Tampa 7,000
Denver 9,000
*Salt Lake City 11,000
*(#1 Recession proof city in the US according to Forbes Mag. 2008)
Austin 11,000
San Francisco 12,000
Raleigh/Durham 13,000
San Antonio 13,000
Las Vegas 14,000
Chicago 15,000
Charlotte 16,000
Orlando 24,000
Atlanta 25,000
Phoenix 29,000
DFW 29,000
**Houston 35,000
**Most Flourishing Market in the Nation and State with Annual New Home Closings


Texas has had and continues to have an overall escalating market.  
From 1st qtr. 2000 – Homes in Houston, San Antonio, Austin and DFW were basically selling at $200,000.

Today DFW is around $270,000; Houston is close to $300,000; While San Antonio and Austin sell at close to $310,000. Slow and Steady… 

Why Buy?

  • Affordability – Texas and specifically Houston is among the most affordable in the US
  • More choices in Houston than most other cities – single family, condo, high rises, lofts
  • The Meltdown is in Other Markets – not Texas “We have a Stable Local Market”
  • Good time to trade up – you may sacrifice on selling end but capitalize on the buying end
  • Interest Rates are affordable “right now”…we don’t know about summer or fall 09
  • Homeowners are very realistic right now about home pricing – we could say homes are “on Sale” right now!
  • Home prices in Houston and Texas are stable.
  • Houston’s economy is strong

While others in cities that have enjoyed great appreciating markets are concerned they will not be able to build equity as rapidly as they did in real estate years past, in Texas, we have never seen the high appreciating markets, we only have seen in the past 10 years, slow and steady…If you plan to stick around in your home, you will see an appreciation of your property. NAR statistics show the average first time home buyer plans to stay in their home for 10 yrs. now as compared to last year’s survey of 7 yrs. Maybe people have become more realistic about how long it takes to earn equity or maybe they have more confidence in real estate assets they can see and feel than other market assets. 

As much as we discuss appreciation, truth be known: People buy for Life style…not investment. 

You couldn’t be in a better State or better City for selling real estate. The facts are crystal clear:

  • You will have the best year ever if you believe in psychology of real estate.
  • If you tell yourself it is a bad time – it will be.
  • If you tell yourself it is a great time – it will be.
  • But the facts say, “it has been and will be a great time for real estate”.


The Most Flourishing Market in the Nation and State with Annual New Home Closings is Houston. 
Facts from MetroStudy 11/08 

Investing in real estate assets right now is the best placement of your money; it is a better hedge than gold.
Dr. Dotzour, TX A&M Research Center 1/12/09 

You couldn’t be in a better State or better City for selling real estate than Houston Texas. 
TX A&M Research Center Data 1/12/09 

More than 2 million jobs were lost between Nov 2007 – Nov 2008 in the Nation; representing 1.2 % of its labor force. The Texas economy gained 222,900 jobs during the same time period; an increase in labor force of 2.1%. 
Real Estate Center RECON 1/13/09

Houston has the strongest job market in the US. 
Metrostud, Jan. 12, 2009

Texas has the strongest job market by State in the US exceeding the nearest competition by 1000%. 
MetroStudy, Jan. 2009. 

Houston’s inventory of homes is 5-6 months on average. This is the lowest average days on market in the US. 
TX A&M Research Center Data 1/13/09 

“We are half way through our recession in Texas. It started out last Jan. 2008.” 
Dr. Dotzour, TX A&M Research Center 1/13/09 
Dr. Gilliland, A&M Research Center Jan. 12, 2009 

Texas is the #2 Destination State for Retirees. 
Dr. Gaines, TX A&M Research Center Data 1/12/09 

Houston has the most affordable median home price of any MSA. 
TX A&M Research Center Data 1/12/09.
 

“The Texas Land Sales Market is short of Phenomenal.


Houston Real Estate Market – Single-Family – January 2009

February 11, 2009

Houston residential real estate now has the lowest inventory of single-family homes on the market since January 2004. In comparison to January 2008, Houston has seen a 20% drop in overall number of homes on the market and a 26% drop in new listings taken. New listings taken in January were the lowest ever taken since January 2002. This is good news amid a nationwide overabundance of homes on the market and an economic stimulus plan targeted at mitigating the rising tide of inventory. Houston never experienced a bubble and its’ economy is one of the strongest in the nation;

You couldn’t be in a better City for selling real estate than Houston Texas. TX A&M Research Center Data 1/12/09
More than 2 million jobs were lost between Nov 2007 – Nov 2008 in the Nation; representing 1.2 % of its labor force. The Texas economy gained 222,900 jobs during the same time period; an increase in labor force of 2.1%. Real Estate Center RECON 1/13/09
Houston has the strongest job market in the US. Metrostudy, Jan. 12, 2009
Texas has the strongest job market by State in the US exceeding the nearest competition by 1000%. MetroStudy, Jan. 2009.
Houston’s inventory of homes is 5-6 months on average. This is the lowest average days on market in the US. TX A&M Research Center Data 1/13/09
“We are half way through our recession in Texas. It started out last Jan. 2008.” Dr. Dotzour, TX A&M Research Center 1/13/2009
Houston has the most affordable median home price of any MSA.
TX A&M Research Center Data 1/12/09

Despite the good news amidst the bleak national economic scene, Houston got off to a slow start in January.

There were 2,827 single-family home sales, a figure 23% below January 2008.
Dollar volume for the month was $466,234,494, a 33% decline over last year.
Contracts initiated during January 2009 experienced 2,774 units or a 23% decline over last year.
The median sales price of sold homes in January 2008 was $127,850, representing an 8% decline over January 2008.
The average sales price was $164,922, or 13% lower than found in January 2008.
Home prices in Houston are not depreciating, there is simply a different demand in home prices classes.

Last year, million dollar home sales in January were up by 58% over the previous year and anything over $600,000 experienced double-digit increases. This year, those same home price classes have experienced double-digit declines as high as 61% for $600,000-$699,999 and homes over $1 million experienced a 57% decline over January 2008. This change in price class demand directly affects the average sales price overall. This year price classes under $60,000 are in positive territory whereas all others experienced a decline over January 2008.

What home price classes experienced the highest demand by number of sales in January 2008?

RANK
PRICE CLASS
# OF SALES 01/09
1$200,000-$249,999/220
2 $120,000-$129,999/182
3 $100,000-$109,999/163
4 $250,000-$299,999/156
5 $90,000-$99,999/153
6 $80,000-$89,999/148
7 $70,000-$79,999/145
8 $300,000-$399,999/143
9 $130,000-$139,999/134
10 $60,000-$69,999/128
11 $140,000-$149,999/124

It is interesting to note all price classes in the table above that are over $80,000 were in double digit decline last year. In short, Houston has experienced an aberration in sales by price class over the last few years. We see buyer demand returning to atypical price classes seen during normal Houston markets.
While normal is not as much fun as exuberance, any Houstonian gladly accepts our market as it is because it is currently the best that it gets.

Opportunities are ripe for Houston real estate. Houston does not need an economic stimulus package to stop home price depreciation or to absorb excess inventory, but Houston will benefit from national stimulus programs designed to do so. The biggest boost residential real estate could receive would be a boost in confidence and certainty about the future economy


Houston Hotness Index for November 2008

December 11, 2008

Index of market activity in the Greater Houston, TX areas. Katy is currently # 2 on this index.


Houston Real Estate Update – November 18

November 18, 2008

The Houston housing market continued to feel the effects of the troubled national economy in October and residual business interruptions caused by Hurricane Ike. New monthly data released by the Houston Association of REALTORS®  (HAR) reflects improvement from market performance in September, when Ike derailed thousands of real estate transactions. However, the number of property sales across the greater Houston area declined last month when compared to October 2007, with sales of single-family homes down 20.1 percent.

The average price of a single-family home dipped 1.6 percent last month to $194,607 from $197,751 in October 2007. That still marks the second highest average price for an October in Houston. At $142,000, the median price of a single-family home in October fell 2.7 percent. Year-to-date home prices are still up compared to 2007 and national figures show Houston continues to fare better than many other U.S. markets, some of which have experienced deprecations of as much as 40 percent.

Sales of all property types for October 2008 totaled 4,962, down 21.6 percent compared to October 2007. Total dollar volume for properties sold during the month was $943 million versus $1.2 billion one year earlier, a 22.9 percent decline.

“Houston remains the envy of real estate professionals around the country, who discussed their sales and pricing concerns with us at this month’s National Association of REALTORS® conference in Orlando,” said Michael Levitin, HAR chairman and principal of HTownRealty.com. “Month’s inventory in Houston is about half the national average, and on a year-to-date basis, prices here are up about three percent from 2007. Nonetheless, we must watch closely to see what further action the federal government may take to stimulate the economy, particularly on behalf of homeowners.”

October Monthly Market Comparison
The month of October brought Houston’s overall housing market disappointing results when comparing all listing categories to October of 2007. Total property sales and total dollar volume fell, as did average and median single-family home sales prices.

The number of available properties, or active listings, at the end of October fell 8.2 percent from October 2007 to 49,016. That’s 1,139 fewer active listings than September 2008, and is seen as an indication that inventory levels are balanced and that home prices should remain stable.

Month-end pending sales – those listings expected to close within the next 30 days – totaled 3,579, which was 21.5 percent lower than last year and suggests another likely sales decline next month. The month’s inventory of single-family homes for October came in at 6.3 months, the lowest level since March of this year. That compares to the October 2007 single-family homes inventory of 6.2 months.

 
ALL CATEGORIES October 2007 October 2008 PERCENT CHANGE
Total property sales 6,327 4,962 -21.6%
Total dollar volume $1,233,550,946 $943,444,534 -22.9%
Average single-family sales price $197,751 $194,607 -1.6%
Median single-family sales price $146,000 $142,000 -2.7%
Total active listings 53,407 49,016 -8.2%
Total pending sales 4,562 3,579 -21.5%
Months inventory* 6.2 6.3 +1.2%
* Months inventory estimates the number of months it will take to deplete current active inventory based on the prior 12 months sales activity. This figure is representative of the single-family homes market.
 

Single-Family Homes Update

At $194,607, the average sales price for single-family homes reached the second highest level recorded for an October in Houston, down 1.6 percent from October 2007 when it was $197,751. The overall median price of single-family homes in October was $142,000. That compares to the national single-family median price of $190,600 reported by the National Association of REALTORS®. These data continue to demonstrate the higher value and lower cost of living that prevail in the Houston market.

har-graph

Additionally, total October sales of single-family homes in Houston came in at 4,202, down 20.1 percent from October 2007 and the fourteenth straight monthly drop.

har-graph-21

HAR also reports existing home statistics for the single-family home segment of the real estate market. In October 2008, existing single-family home sales totaled 3,526, a 17.3 percent decrease from October 2007. At $175,392, the average sales price for existing homes in the Houston area fell 5.3 percent compared to last year. The median sales price of $130,000 for the month was also down 3.7 percent from one year earlier.

Townhouse/Condo Update

The number of townhouses and condominiums sold in October fell compared to one year earlier. In the greater Houston area, 421 units were sold last month versus 534 properties in October 2007, translating to a 21.2 percent decrease in year-over-year sales.

har-graph-3

The average price of a townhouse/condominium increased to $161,428, up 0.7 percent from one year earlier and the highest figure for the month of October. The median price dipped 1.5 percent to $129,000 from October 2007 to 2008. That figure is the second highest historically for the month of October.

Lease Property Update

Demand for single-family and townhouse/condominium rentals increased in October, continuing an upswing triggered by Hurricane Ike, as many sought short-term housing while engaging in storm-related recovery projects. Single-family home rentals rose 36.0 percent in October compared to a year earlier, while year-over-year townhouse/condominium rentals were up 34.1 percent.

Houston Real Estate Milestones in October

  • Second highest average single-family home sales price for an October ($194,607);

  • Highest average townhouse/condominium sales price for an October ($161,428);

  • Second highest median townhouse/condominium sales price for an October ($129,000);

  • Lowest month’s inventory of single-family homes since March 2008 (6.3 months).

  •  
    The computerized Multiple Listing Service of the Houston Association of Realtors® includes residential properties and new homes listed by 26,000 Realtors throughout Harris, Fort Bend and Montgomery counties, as well as parts of Brazoria, Galveston, Waller and Wharton counties. Residential home sales statistics as well as listing information for more than 53,000 properties may be found on the Internet at http://www.har.com.The information published and disseminated to the HAR Multiple Listing Services is communicated verbatim, without change by Multiple Listing Services, as filed by MLS participants.

    The MLS does not verify the information provided and disclaims any responsibility for its accuracy. All data is preliminary and subject to change. Monthly sales figures reported since November 1998 includes a statistical estimation to account for late entries. Twelve-month totals may vary from actual end-of-year figures. (Single-family detached homes were broken out separately in monthly figures beginning February 1988.)

    Founded in 1918, the Houston Association of Realtors® (HAR) is a 27,000-member organization of real estate professionals engaged in every aspect of the industry, including residential and commercial sales and leasing, appraisal, property management and counseling. It is the largest individual membership trade association in Houston, as well as the second largest local association/board of Realtors® in the United States.