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.

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Real Estate prices across US – Great mapping tool

November 20, 2008

I just got this today and thought it was fascinating, and I think you will too.

You can move your mouse across most cities in the USA and by clicking on the little house you can then see the median price and the drop/gain in prices.  As you check on the median prices and the average increase or decline from the previous year, you will note that the Houston Market is very strong compared to the majority of the nation. Unfortunately, the Katy/West Houston area is not defined on this map but I will be happy to share that we have been in the # 1 and # 2 position for hottest markets in Houston for the majority of 2007 and 2008. Katy is still very strong and a wonderful place to purchase property and to raise a family.

To see the map click HERE.

As reported on my blog and in my newsletter, houses are being gobbled up now in some markets. In fact, many buyers are purchasing properties in depressed areas, sitting on them and waiting until the market conditions improve. This tells us that there is promise, after all we all need a place to live !

If you are sitting on a stagnant or decreasing IRA or 401K, did you know that you can move those funds (without penalty) into a Self-Directed IRA plan with a trustee/custodian and purchase real estate? Sound interesting? This a fabulous way to have more control over your retirement accounts as well as have the liquidity to move into the real estate market. I know, there are nay sayers who feel that the real estate market is too risky.  Well, have you seen your stock holdings lately? Risky is too soft a word for what happened to many of us. The interesting thing is while many stock holdings have lost up to 50% of their value, most real estate markets have held firm – with the exception of the speculative markets of California, Florida, Nevada and Arizona. These are markets that were unrealistically inflated by speculation and needed a correction – much like the dot com stocks several years ago. Of course, these are the only market we hear about in the news so everyone thinks the entire nation is up for a Fire Sale. Nothing could be farther from the truth.

When I speak about real estate investing, I am not speaking about speculation. That is a very risky enterprise and not a place to put your retirement funds. There are many solid real estate investments out there. In fact, the Warren Buffett’s and Donald Trump’s of the world are already adding to their portfolios. 

I am happy to share more information about Self-Directed retirement accounts and how you can take control of your nest egg. Good Luck and Happy Investing…