Texas: A Proposed Sales Tax on Real Estate –

January 12, 2011

Texas, like many states, is currently facing an economic shortfall and our Legislators are scrambling to make up the difference. There are many proposed bills being brought for consideration to try to shore up the State’s coffers. While I realize the money has to come from somewhere, an informed consumer is wise consumer.

Political party affiliations aside, as a Realtor, I am a fierce proponent of private property rights. I will be running a series of discussions about the proposed bills to share available information so that you aware of items that could negatively impact your property rights and your pocket-book.

Taxes on real estate transactions: Combined State and Local sales tax rate would be applied when a property is sold or changes ownership and on long-term leases.

This is similar to buying a car now but could come into play whether a home is bought, sold, or transfers ownership due to divorce, probate, etc. The position of the Texas Association of Realtors (TAR) is that this will actually drive down the number of transactions and potentially  increase the future tax rates needed to cover earmarked expenditures, burdening both buyers and sellers and hurting the real estate market and the Texas Economy.

As a Buyer: This would certainly eat into the cash reserves for your down payment, repairs, furnishings, etc. And if your margins for borrowing are narrow, this could actually diminish the amount you can finance or size of home you can purchase.

As a Seller: This will eat into the equity or net proceeds you walk away with from the sale and could end up raising the costs of housing in your area.

As a Tenant/Landlord: One concern is what will be designated as a “long-term lease” and how much will this impact lease costs because someone has to bear the expense:  landlord, tenant or both. As an investor, this could certainly impact your ROI.

What are your thoughts on this proposed sales tax item?


Texas Realtors Launch Program to Assist Homebuyers!

August 17, 2010

 TAR (Texas Association of Realtors) INITIATIVE TO HELP HOMEBUYERS

 AUSTIN (Texas Association of Realtors) – The Texas Association of Realtors (TAR) has announced an initiative to help more homebuyers take advantage of housing assistance programs and make homeownership more affordable for Texans.

According to TAR, Texas ranks 44th out of 50 states in overall homeownership, partly because of a need for more affordable housing. That homeownership gap is widest in Texas among Hispanics, who account for 36 percent of the state’s population but only 5 percent of homeowners.

 “The good news for our state is that many programs do exist to make homeownership more affordable for Texans,” said TAR Chairman Bill Jones. “The bad news is that few people know about them and even fewer know how to take advantage of them.”

To address this issue, TAR has launched TxHomePrograms.org, an online searchable database of housing assistance programs in Texas.

In addition, Texas Realtors are partnering with local lenders, housing counselors and others throughout the state to host educational events for consumers. At these events, attendees will learn about workforce housing issues, consumer needs for workforce housing and Texas-specific programs available to make homeownership more affordable.


Most Popular Online Pages on Texas Real Estate Center Site

February 9, 2010

Click here to view the RECON – Texas Real Estate Center’s report on the most popular online publications. This site is an incredible resource for anyone interested in what is happening with regard to real estate in the Great State of Texas.

As of January, here were the Center’s most popular online publications as determined by total visits:

  1. Obtaining a Texas Real Estate License by Judon Fambrough — 1,887 visits.
  2. Ag-use Exemption: Fact or Fiction” (revised Jan. 2010) by Judon Fambrough — 1,294.
  3. Austin–Round Rock Market Report by Edith Craig, Beth Thomas, Kory Merten, Kelly Beevers and Kristen Wiehe — 1,012.
  4. Monthly Review of the Texas Economy by Ali Anari and Mark Dotzour — 965.
  5. Dallas–Fort Worth–Arlington Market Report by Edith Craig, Beth Thomas, Kory Merten, Kelly Beevers and Kristen Wiehe — 742.
  6. Hints on Negotiating an Oil and Gas Lease by Judon Fambrough — 653.
  7. Texas Rural Land Value Trends 2008 by ASFMRA — 649.
  8. San Antonio Market Report by Edith Craig, Beth Thomas, Kory Merten, Kelly Beevers and Kristen Wiehe — 599.
  9. Easements in Texas by Judon Fambrough — 557.
  10. Priority of Mortgage and Tax Liens” by Judon Fambrough — 534.

Posted from the RECON from TAMU Real Estate Center.


Frozen Pipes – information from Texas Dept. of Insurance

January 6, 2010

Frozen Pipes

 

(January 2010)

 This information is taken directly from http://www.tdi.state.tx.us/pubs/consumer/cb011.html

Icy winter weather can cause water pipes to freeze and burst if you haven’t prepared them for the frigid temperatures. Outdoor pipes, pipes in unheated areas, and pipes that run along uninsulated exterior walls are susceptible to expanding and bursting if they freeze. The result can be thousands of dollars worth of water damage to your walls, ceilings, carpets, and furniture.

Prepare for the Freeze

You can protect your home by taking the following precautions to prepare your pipes for a freeze:

  • Protect faucets, outdoor pipes, and pipes in unheated areas by wrapping them with rags, newspapers, trash bags, or plastic foam.
  • Insulate your outdoor water meter box and be sure the lid is on tight.
  • Cover any vents around your home’s foundation.
  • Drain water hoses and store them in a garage or shed.
  • Protect outdoor electrical pumps.
  • Drain swimming pool circulation systems or keep the pump motor running. (Run the pump motor only in a short freeze. Running the motor for long periods could damage it.)
  • Drain water sprinkler supply lines.
  • Open the cabinets under the sinks in your kitchen and bathrooms to allow heated air to circulate around the water pipes.
  • Set your thermostat at a minimum of 55 degrees, especially when you’re gone for the day or away for an extended period.
  • Let indoor faucets drip, but don’t run a heavy stream of water.
  • Make sure you know where your home’s shut-off valve is and how to turn it on and off.
  • If you leave town, consider turning off your water at the shut-off valve. Leave your faucets on when you turn the water off to drain the pipes.  Make sure you turn the faucets off before you turn the shut-off valve back on.
  • If you drain your pipes, contact your electric or gas utility company for instructions on protecting your water heater.

If Your Pipes Freeze

If a pipe bursts and floods your home, turn the water off at the shut-off valve.  Call a plumber for help if you can’t find the broken pipe or if it’s inaccessible.  Don’t turn the water back on until the pipe has been repaired.

If the pipe hasn’t burst, thaw it out with an electric heating pad, hair dryer, portable space heater, or towel soaked with hot water. Don’t use a blowtorch or other open-flame device. They are fire risks and could produce dangerous carbon monoxide.

Apply heat by slowly moving the heat source toward the coldest spot on the pipe. Never concentrate heat in one spot because cracking ice can shatter a pipe. Turn the faucet on and let it run until the pipe is thawed and water pressure returns to normal.

If You Have Damage

Contact your insurance agent or company promptly. Follow up as soon as possible with a written claim to protect your rights under Texas’ prompt-payment law.

Review your coverage. Most homeowners and renters policies pay to repair houses and replace personal property damaged by the bursting pipes. Most policies also pay for debris removal and for additional living expenses if you have to move temporarily because of damage to your home. If you can’t find your policy, ask your agent or company for a copy.

Homeowners policies may require you to make temporary repairs to protect your property from further damage. Your policy covers the cost of these repairs. Keep all receipts and damaged property for the adjuster to inspect. If possible, take photos or videos of the damage before making repairs. Don’t make permanent repairs. An insurance company may deny a claim if you make permanent repairs before an adjuster inspects the damage.

Most homeowners policies do not cover loss caused by freezing pipes while your house is unoccupied unless you used reasonable care to maintain heat in the building; shut off the water supply; and drain water from plumbing, heating, and air conditioning systems.

For More Information or Assistance

For answers to general insurance questions or for information on filing an insurance-related complaint, call the Consumer Help Line between 8 a.m. and 5 p.m., Central time, Monday-Friday, or visit our website

1-800-252-3439
463-6515
in Austin
www.tdi.state.tx.us

For printed copies of consumer publications, call the 24-hour Publications Order Line

1-800-599-SHOP (7467)
305-7211 in Austin

Help us prevent insurance fraud. To report suspected fraud, call our toll-free Fraud Hot Line

1-888-327-8818

To report suspected arson or suspicious activity involving fires, call the State Fire Marshal’s 24-hour Arson Hot Line

1-877-4FIRE45 (434-7345)

The information in this publication is current as of the revision date. Changes in laws and agency administrative rules made after the revision date may affect the content. View current information on our website. TDI distributes this publication for educational purposes only. This publication is not an endorsement by TDI of any service, product, or company.

For more information contact: ConsumerProtection@tdi.state.tx.us


Understanding the First Time Home Buyer’s Credit… Before it is Too Late!

September 7, 2009

1.   Who is eligible to claim the tax credit?
If you are a first-time home buyer purchasing a new home or a resale-you are eligible for the tax credit.  The purchase must take place on or after January 1, 2009 and before December 1, 2009 to qualify for the tax credit. As it applies to the tax credit, the purchase date is the date when the home closes and the title to the property transfers to the home owner.

2.   What is the definition of a first-time home buyer?
The tax credit law defines a “first-time home buyer” as a buyer who has not owned a principal residence during the three-year period prior to the purchase. If you are married, both spouses cannot have owned a home.

For example, if you didn’t own a home but your spouse did, you do not qualify.  For unmarried purchasers, the credit amount can be given to any buyer who qualifies as a first-time buyer, for instance, if a parent jointly purchases a home with a son or daughter. If you owned a vacation home or rental property not used as a principal residence you are not disqualified as a first-time home buyer.

3.   How is the amount of the tax credit determined?
The tax credit is 10 percent of the home’s purchase price, however, there is a maximum $8,000 credit.

4.   Are there any income limits for claiming the tax credit?4.
The full tax credit amount is given to buyers with a modified adjusted gross income (MAGI) of less than $75,000 for single taxpayers and $150,000 for married taxpayers filing a joint return. For taxpayers with MAGI of more than $95,000 (single) or $170,000 (married) the credit is reduced to zero.  Taxpayers between these figures are prorated accordingly.
  
5.   What is “modified adjusted gross income”?
Modified adjusted gross income or MAGI is defined by the IRS.   For most buyers this will be the figure at the bottom of the first page of form 1040 or 1040A.  For Form 1040 EZ this is reported on line 4 as of 2008.

6.   If my modified adjusted gross income (MAGI) is above the limit, do I qualify for any tax credit?
Possibly. It depends on your income.

7.   Can you give me an example of how the partial tax credit is determined?
There is a $20,000 difference between those who are eligible for a full tax credit and those where the credit is reduced to zero.  If you take the amount you are over the limit by and divide it by the 20,000, this will give you the percentage that you are over the limit by.  Subtract that number from 100% and then multiply it times the $8,000.  That will give you your tax credit amount.

For example: A married couple has a modified adjusted gross income of $165,000. Their income exceeds $150,000 by $15,000. Dividing $15,000 by $20,000 yields 0.75.  This means they are over the limit by 75% and so are eligible for a tax credit of 25%.  Multiplying $8,000 by 0.25 shows that the buyer is eligible for a partial tax credit of $2,000.

Please remember that this is an example. You should always consult your tax advisor.

8.   How is this home buyer tax credit different from the tax credit that Congress enacted in July of 2008?
The most significant difference is that this tax credit does not have to be repaid.  This tax incentive is a true tax credit. But home buyers must use the residence as a principal residence for at least three years or face having to repay it. Certain exceptions apply.

9.   How do I claim the tax credit? Do I need to complete a form or application?
You claim the tax credit on your federal income tax return. Specifically, home buyers should complete IRS Form 5405 to determine their tax credit amount, and then claim this amount on Line 69 of their 1040 income tax return. No other applications or forms are required, and no pre-approval is necessary. However, you will want to be sure that you qualify for the credit under the income limits and first-time home buyer tests.

10.What types of homes will qualify for the tax credit?
Any home that will be used as a principal residence qualifies for the credit. This includes single-family detached homes, attached homes (i.e. townhomes and condominiums), manufactured homes (also known as mobile homes), modular homes and houseboats.  If it qualifies for the capital gains tax on a primary residence, it qualifies for this.

11.I read that the tax credit is “refundable.” What does that mean?
It means that the credit can be claimed even if the taxpayer has little or no federal income tax liability to offset.

For example, if you owe $6,000 in taxes and had $4,500 in taxes withheld for the year you still owe $1,500 in taxes.  You would receive a check from the government for $6,500.  ($8,000 – $1,500 = $6,500.)
Or perhaps more common would be that you have a tax liability of $6,000 and you had $7,500 withheld so you would be getting a refund of $1,500 before the credit – the credit gets added to your refund so you would get a refund of $9,500 ($1,500 + $8,000 = $9,500)
And you don’t have to have any tax liability in the year you claim the credit – but you do have to have income.

12.I purchased a home in early 2009 and have already filed to receive the $7,500 tax credit on my 2008 tax returns.How can I claim the new $8,000 tax credit instead?
You may file an amended 2008 tax return with a 1040X form. You should consult with a tax advisor to ensure you file this return properly.
 
13.Instead of buying a new home from a home builder, I hired a contractor to construct a home on a lot that I already own. Do I still qualify for the tax credit?
Yes. The “purchased” date is the date the owner first occupies the house.  The date of first occupancy must be on or after January 1, 2009 and before December 1, 2009.

In contrast, for newly-constructed homes bought from a home builder, eligibility for the tax credit isdetermined by the settlement date.

14.Can I claim the tax credit if I finance the purchase of my home under a mortgage revenue bond (MRB) program?
Yes. The tax credit can be combined with the MRB home buyer program. Note that first-time home buyers who purchased a home in 2008 may not claim the tax credit if they are participating in an MRB program.

15.I live in a district where I am already receiving a first time home buyer credit (Washington D.C.)   Can I claim both credits?
No. You can claim only one.

16.I am not a U.S. citizen. Can I claim the tax credit?
Consult your tax accountant.  If you are NOT a nonresident alien (as defined by the IRS), have not owned a principal residence in the past three years and meet the income limits you may be eligible to claim the tax credit for a qualified home purchase.

17.Is a tax credit the same as a tax deduction?
No. A tax credit is a dollar-for-dollar reduction in what the taxpayer owes. That means that a taxpayer who owes $8,000 in income taxes and who receives an $8,000 tax credit would owe nothing to the IRS.

A tax deduction is subtracted from the amount of income that is taxed. Assuming the same $8,000 tax liability from above, a taxpayer is in the 33 percent tax bracket would have their liability reduced from $8,000 to $5,360. ($8,000 minus 33%).
So the tax CREDIT is much more helpful to the buyer

18.I bought a home in 2008. Do I qualify for this credit?
No, but you may qualify for another tax credit  if you bought  your first home between April 9, 2008 and January 1, 2009.
 
19.Is there any way for a home buyer to get the money before they file their 2009 tax return?
Yes. If you believe you will qualify for the tax credit you can reduce your withholding taxes on your paycheck by adjusting your withholding amount on your W-4 via your employer or through your quarterly estimated tax payment.  You can put this saved money aside to use as a downpayment.
 
IRS Publication 919 contains rules and guidelines for income tax withholding. Please note that if the qualified purchase does NOT occur, then you will be liable for repayment to the IRS of income tax and possible interest charges and penalties.  Consult your account prior to doing this.
 
20.If I’m qualified for the tax credit and buy a home in 2009, can I apply the tax credit against my 2008 tax return?
Yes. The law allows taxpayers the opportunity to treat qualified home purchases in 2009 as if the purchase occurred on December 31, 2008.

Taxpayers buying a home who wish to claim it on their 2008 tax return, but who have already submitted their 2008 return to the IRS, may file an amended 2008 return claiming the tax credit. You should consult with a tax professional to determine how to arrange this.
 
21.For a home purchase in 2009, Can I choose which year to claim the credit (2008 or 2009) to make sure I get the largest credit possible?
Yes.  You can choose to claim the credit in the tax year that will give you the greatest credit based upon your MAGI.  The purchase must take place in 2009.


Seller’s Disclosure: What does a seller have to disclose to a buyer?

August 1, 2009

in a word: EVERYTHING… 

In the bad old days, the seller did not have this requirement placed on him and it was a case of Caveat emptor – “Let the buyer beware!”. Times have changed and the onus is now entirely on the seller to make known any and all material facts regarding the condition of the property he or she is selling.

In real estate transactions, the root cause for most problems is lack of disclosure by the seller. Funny thing is… most of the time it is entirely unintentional. Why would anyone in their right mind try to hide an issue that will come out anyway through inspections, diligent research or nosy neighbors happy to share any and all facts known or rumored about your home. Yes, your nosy Nellie next door did happen to see the foundation repairman and the roofer two years and will certainly make sure your buyer knows all about it – in great detail.

One interesting disclosure item that always causes issues is disclosing a prior death on the property. Now, deaths by natural causes, suicide, etc. are not required to be disclosed but those caused by a defect of the property or criminal activity – yes, DISCLOSE, DISCLOSE, DISCLOSE! Should you let the buyer know about a death that is not necessarily required? That is a judgement call you will have to make. Example: my brother-in-law bought a home in Austin a few years ago. When we visited, being the chatty gal that I am, I stopped by the neighbor’s house to introduce myself and learn more about the area. I found out in less than one minute that the prior owner had committed suicide in the backyard. Now, that is not a required disclosure item but… should it have been shared? Probably. Would it have caused a termination in the contract… Probably not. My feeling about the matter is: Would you want to learn about something of this nature from the seller or later from the neighbors? 

When I work with sellers, I deliver to them the Seller’s Disclosure form, a 5 page document that is required by the State of Texas to be filled out to the best of the seller’s ability and given to the buyer of any property within a mandated time frame according to the actual contract. There are individuals who are exempt from the use this form: Banks or other entities who own foreclosure properties, Probate administrators, etc. but the normal seller in the State of Texas must render this form… and that is where he/she gets in trouble.

I am often asked by my sellers…”Should I disclose this or that…?” As your Realtor, I am not allowed to assist in the completion of this form but my answer to that is always the same… a resounding YES! If the question was brought up in the seller’s mind, then YES, disclose whatever it is. The litmus test is you should disclose any and all items that if not disclosed, could cause the buyer to reconsider his offer. Meaning, if the non-disclosure of an item would cause your buyer to either make a different offer or pass on the property, then yes, DISCLOSE, DISCLOSE, DISCLOSE. Even if it was a roof repair 20 years ago…Again, I repeat… IF IN DOUBT, DISCLOSE. 

You can always explain your answer. I have had clients add several pages of explanation to the disclosure form, which is entirely appropriate. The disclosed item may have no affect at all on a buyer’s interest in a property. In fact, most homes (like people) have a past and as long as the issues are not on-going or improperly addressed, your buyer will proceed as usual. But by making your disclosure, your buyer simply will not have a reason to come back to you later if any and all matters are disclosed up front.

Another important item to disclose is any inspection report on the home within the last 4 years: structural, mechanical, environmental, termite, etc. And if you had a major issue that needed remediation (mold, for example), that really should always be disclosed even if completely re-mediated. You can again attach your explanations of repairs made and receipts for those repairs.

Disclosure items are a mine field of trouble if handled incorrectly so the best road to take is always the high road. Remember, you will be a buyer someday, too and will want your future seller to treat you as you should treat today’s buyer for your home.


Texas Appraisal Reform Clears House!

May 7, 2009

Appraisal-reform package clears House
As the legislative session enters its last 30 days, appraisal-reform legislation has cleared an important legislative hurdle:
• House Bill 8. Passed by the House on April 27. This bill would allow for the comptroller’s office to conduct a methods and procedures audit and a property value study of appraisal districts every other year.
• Senate Bill 20. Passed by the Senate on April 28. This bill will modernize and update appraisal methods and oversight of appraisal districts to ensure greater accountability and efficiency. It will also promote taxpayer fairness by streamlining the appraisal process while preserving taxpayer protections.
• House Bill 2447. Passed by the House on April 27. This bill implements the Sunset recommendations to repeal the Board of Tax Professional Examiners (BTPE). The functions of the BTPE would be split between the Texas Department of Licensing and Regulation and the comptroller’s office.
• House Bill 3454. Passed by the House on April 30. This bill requires all available evidence that is specific to the value of a property to be considered in determining market value. It also defines “comparable sale” to include only a sale occurring within 24 months of the date of the appraisal adjusted for changes in the market value over time.
• House Bill 3611. Passed by the House on April 27. This bill allows appraisal districts to enter into an agreement to consolidate appraisal review boards.
• House Bill 3612. Passed by the House on April 27. This bill allows property tax appeals from certain counties to be heard by the state Office of Administrative Hearings.
• House Bill 3613. Passed by the House on April 27. This bill allows for a residence homestead to be appraised as a residence, not on the basis of the “highest and best use” appraisal standard.
• House Joint Resolution 36. Adopted by the House on April 27. This joint resolution allows for the implementation of the bills above


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


The American Recovery and Reinvestment Act of 2009, H.R. 1 – How does it affect you, the home buyer?

February 12, 2009

The Economic Stimulus Bill (The American Recovery and Reinvestment Act of 2009, H.R. 1.) has been reconciled by the House and Senate. The details of the legislation have not been finalized but we expect the legislation to include a number of important housing provisions, including the remedies for the housing crisis that NAR prescribed at the annual meeting in Orlando, Florida.

  • Homebuyer Tax Credit – a $7500 tax credit that will be available for qualified purchase of a principal residence by a first time homebuyer between January 1, 2009 and September 1, 2009.  The credit does not require repayment. Individuals who purchase in 2009 using financing assistance from state and local mortgage bonds will be permitted to use the credit, as well.
  • FHA, Fannie and Freddie Loan Limits – Revised loan limits for FHA, Freddie Mac, and Fannie Mae.  Specifics have not been released but reports indicate that the 2008 limits have been reinstated for 2009 except in those communities where the 2009 limits are higher. Additional increases in individual communities may also be available at the discretion of the HUD Secretary.
  • Foreclosure Mitigation & Neighborhood Stabilization – Funding for states and local communities to be used for neighborhood stabilization activities for the redevelopment of abandoned and foreclosed homes are authorized.

These elements of the American Recovery and Reinvestment Act of 2009 are the pillars of the NAR Housing Stimulus Plan presented to the 111th Congress.  Additionally we continue to work closely with the Department of Treasury and Secretary Timothy Geithner to implement a mortgage buy-down program. NAR also recommended that the Treasury Department expand the Term Asset-Backed Loan Facility (TALF) to include commercial mortgage-backed securities as eligible collateral.  The Treasury has approved this recommendation and this will encourage investment in the commercial real estate market.

The Economic Stimulus Bill (The American Recovery and Reinvestment Act of 2009, H.R. 1)
Additional Housing and Other Provisions of Interest to NAR

  • Rural Housing Service – Increased funding for the Rural Housing Service direct and guaranteed loan programs.
  • Low Income Housing Grants – Allow states to trade in a portion of their 2009 low-income housing tax credits for Treasury grants to finance the construction or acquisition and rehabilitation of low-income housing, including those with or without tax credit allocations.
  • Tax Exempt Housing Bonds – Tax-exempt interest earned on specified state and local bonds issued during 2009 and 2010 will not be subject to the Alternative Minimum Tax (AMT).  In addition, financial institutions will have greater capacity to purchase tax-exempt state and local bonds.
  • Energy Efficient Housing – Grants for energy retrofits for federally assisted housing (section 8), funding for Energy Efficiency & Conservation Block Grants to states, and Increases in the residential tax credit through 2010 for certain energy efficient upgrades.
  • Transportation –   Spending for upgrades and repairs of road, bridges and transit facilities.  
  • Broadband Deployment – Grants to make broadband available in unserved communities

As the leading advocate for homeowners and the real estate industry, the National Association of REALTORS will continue to address the issues facing Americans who are trying to purchase a new home, protect their current home or preserve investment opportunities in residential and commercial properties.

NAR recognizes the efforts of the members of Congress and the Senate who understand that without a housing recovery, an overall economic recovery is impossible.

 


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.