10 Steps To Sell More Quickly In Stalled Markets
by Peter G. Miller
We're well into the prime real estate selling season for much of the country, a marketplace less certain in many areas than in the past few years.
We don't fully know what will happen in 2007, but to date many markets have stalled if not declined. For most long-term owners selling in such a marketplace, appreciation from past years assures profitable sales, but perhaps not as profitable would have been the case in 2006.
But still, owners in all cases would like to maximize their profits. What to do? If you're a seller, there are 10 negotiating steps you can take to make sure your home has the best chance for a top price and a quick sale.
Step 1: Get a local broker. In a slow market there are relatively fewer buyers. It follows that to generate the most demand you want your property exposed to as many purchasers as possible. Who do buyers contact when they want a house? Brokers. Figures from the National Association of Realtors show that 85 percent off all buyers rely on real estate brokers when buying a home while 80 percent rely on the Internet. Who posts real estate information on the Internet? Local brokers.
Step 2: Read the sale agreement. Virtually all jurisdictions have a standardized real estate contract which over the years have become lengthy and complex. If you use one then you're automatically agreeing to all unmodified terms and conditions, so read the entire agreement so you know what is being said.
But is there something in the proposed agreement that should be changed, removed or added? Brokers should provide a copy of the sale agreement they expect to use at listing presentations and this document should be read to avoid surprises and misunderstandings. Since these are form agreements, anything not required by law can be changed with a suitable cross-out or addenda. For details, speak with your broker or attorney.
Step 3: Know the marketplace. In terms of negotiation it's not good enough to know recorded sale prices because they frequently don't tell the whole story. For instance, two homes may both have recorded sale prices of $500,000. One may actually have sold for $500,000 while the other sold for $500,000 but the owner gave a 3 percent seller credit to the buyer for a new roof and appliances -- that's $15,000 off the top. Local brokers who actually make sales know the innards of recent transactions are thus are in the best position to provide negotiating advice.
Step 4: Know your terms. You know your property will sell at some price point, but rather than a given price it's best to think of a home as a package of price and terms. For instance, in a slow market it may be better to pay a "seller contribution" to help buyers off-set closing costs than to lower the sale price. In many cases, the seller contribution may be smaller than a price reduction and much more attractive to buyers who need cash to close.
Step 5: Reduce deposit requirements. To make a contract work there's a need for a buyer deposit, the "consideration" necessary to bind a deal. If you're a seller you want the largest possible deposit, but in a slow market you may have to settle for less. Buyers, for their part, want to make the smallest possible deposit if only because a big deposit represents a huge psychological commitment -- and a financial one.
Less consideration may be appropriate if the buyer is pre-approved for a loan, the purchasers have a strong interest in the property and no better offer is in the picture.
Step 6: Throw in stuff. Do you really want to move a swing set or a washer/dryer? In some cases it may be best to "reluctantly" part with such items if only a buyer will make an offer.
Step 7: Update MLS photos. If it's August and your MLS photo shows a home with four feet of snow in the front yard then buyers can guess that the home has been for sale for a long, long time -- meaning the price and terms are, um, flexible. Perhaps more "flexible" than you would like. Have your broker post newer photos.
Step 8: Review the marketing plan. The marketing plan developed by your broker should be reviewed as often as necessary to assure that; one, it is being followed and; two, it is changed as necessary.
Step 9: Visit open houses. It's always good to visit open houses or, as they're otherwise called, the competition. It's not easy to be objective, but is there something other owners are offering which might work for your property? Something you can make into a bargaining point? Maybe an offer to re-paint the living room in a color of the buyer's choice is not a bad idea.
Step 10: Have context. It's silly to worry about small costs and concessions when your core goal is to sell the home.
In one situation, a buyer demanded an extra $500 to resolve some alleged concern just before closing. We thought this was simply an example of buyer's remorse and said yes, got an otherwise terrific price, and closed. Soon thereafter the local market slowed and prices softened. It was far cheaper to "lose" $500 then to locate another buyer a few weeks or months later when the market was harsher and our final sale price might have been many thousands of dollars less.
Would we have rather not paid the $500? Sure. But $500 was a small cost in the context of a rapidly changing market, one where delay could have meant a serious price reduction.
Thursday, February 12, 2009
Know the Facts: Mortgages
Check out this great article, written by my friend Suzanne Mayer (click the image below to read it):
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For Some, It's Finally Time to Dive Into Housing Market
Wall Street Journal
February 11, 2009
For Some, It's Finally Time to Dive Into Housing Market
By MARY PILON
For years, even as her friends bought huge houses in the expensive Phoenix market, ElizabethChild remained a renter.But in January, the airline customer-service agent and her boyfriend closed on their first home.
The three-bedroom, two-bath house, complete with granite countertops and a pool, had been listedfor $340,000 in late 2007, but the couple bought it for $220,500. "Six months ago I didn't thinkI would own a home," says Ms. Child, 27 years old.
"And now I do. It's so perfect."Elizabeth Child and William McGeary were able to buy their first home after prices in Phoenixdropped sharply.The housing bust is creating a new group of winners: first-time home buyers.
People who sat onthe sidelines -- often watching wistfully as their friends became homeowners -- are suddenly ina position to grab some great deals. Indeed, first-time home buyers made up 41% of all buyers atthe end of 2008, up from 36% in 2006, according to a recent survey from the National Associationof Realtors.
The new buyers are being lured in by home prices that are down about 25% from their peak levelsin mid-2006, according to the S&P/Case-Schiller Index. In some markets, prices have dropped evenfurther -- slumping around 40% in Phoenix, Miami and Las Vegas. Lower mortgage rates have alsohelped make real estate more affordable, and as houses languish on the market longer, morehomeowners are willing to negotiate.
With Congress considering plans to sweeten a tax credit forfirst-time home buyers, the picture could get even brighter.
"Buyers are now coming back into those hard-hit markets to take advantage," says Lawrence Yun,chief economist for the Realtors' association. "It's a buyer's market."Ululani and Scott Larson looked for a house in the Seattle area several years ago, but held offfrom buying, deterred by the high prices.
"I felt like we were missing out, because everyoneknows it's the American dream to buy a home and build equity," Mrs. Larson says.The couple was shocked to discover recently that they could afford a four-bedroom home inFederal Way, Wash.
The assessed value of the home in January was $400,000, Mrs. Larson says.Their offer of $315,000, with a down payment of $15,000 was quickly accepted by the relocationcompany, which had had the property on the market for six months.
"Honestly, I didn't think we'dget as nice of a house as we did," Mrs. Larson says.Of course, would-be buyers need decent credit scores and the money for a decent down payment.Also, finding the right property can be a challenge for first-time buyers, who tend to beseeking less-expensive homes.
The typical first-time buyer purchased a home costing $165,000last year, according to the National Association of Realtors. Yet some of the best bargainsright now are in luxury condos and sprawling single-family houses.
"The disproportionate McMansion inventory doesn't work," says Shari Olefson, a real-estatelawyer who works in southern Florida. "Even if you qualify for the loan, there are huge overheadcosts to buying a larger home."
Still, real-estate agents and mortgage lenders are banking on first-time buyers to helpstimulate the otherwise dreary housing market. Many are holding workshops and informationsessions designed specifically for first-time buyers, addressing federal and state taxincentives for homeowners, local prices and ways to take advantage of low mortgage interestrates.
Tim Epps, a mortgage adviser in Tulsa, Okla., runs rent-vs.-buying simulations forwould-be buyers and recommends that other prospective buyers do the same long-term calculations.Mr. Epps and many mortgage lenders recommend that buyers come up with as big a down payment aspossible, even though Federal Housing Administration loans will allow some first-time buyers toenter the market with as little as 3% down. (Hud.gov has more information about FHA loanprograms designed for first-time buyers.)
"Even if [a home owner] loses some paper equity, in the long run, there are some tax benefits,"says Mr. Epps, referring to the deduction for interest paid on mortgages and the credit forfirst-time home buyers.Elizabeth Child bought a home once listed at $340,000 for $220,500.
The $7,500 tax credit for first-time buyers, which Congress passed last year, has had littleeffect on the market so far. Because the credit has to be repaid, buyers are viewing it asanother loan, industry experts say.
But the stimulus package that Congress is working on islikely to repeal the provision that requires buyers to pay the credit back and possibly enlargethe tax credit as well.For many buyers, the biggest question is whether to hold out for even better conditions.Historically, recoveries in the housing market are slow, and most experts expect the prices tostay low for some time.
That means people can take their time shopping for the right property,real-estate experts say.John Stratton, an agricultural engineer in Lisle, Ill., was serious about buying last summer butheld off from making a bid.
Some of the money he planned to use for a down payment sufferedlosses from mutual-fund investments. He's also waiting for prices in his area to go downfurther. "I can do better investing in things other than real estate," he says. "Right now, I'mnot diving in."Patience can pay off. Jen and Drew Rocky spent over a year tracking their prey before the pricewas right.
In the summer of 2006, they saw the four-bedroom, 2½-bathroom home of their dreams inSherman, Conn. The asking price was $565,000, "completely out of our price range," Mrs. Rockysays.But they didn't give up.
The Rockys kept driving by the vacant house. They had online alerts tonotify them of changes in the property's listings. They went to town hall to research the home'spublic records. As they suspected, the home was in foreclosure.
"There were liens all over theplace," Mrs. Rocky says.They bought the home in December 2007 for $410,000. "I felt so vindicated," Mrs. Rocky says. "Wegot a good deal, but I'm sure there are even better deals out there."
February 11, 2009
For Some, It's Finally Time to Dive Into Housing Market
By MARY PILON
For years, even as her friends bought huge houses in the expensive Phoenix market, ElizabethChild remained a renter.But in January, the airline customer-service agent and her boyfriend closed on their first home.
The three-bedroom, two-bath house, complete with granite countertops and a pool, had been listedfor $340,000 in late 2007, but the couple bought it for $220,500. "Six months ago I didn't thinkI would own a home," says Ms. Child, 27 years old.
"And now I do. It's so perfect."Elizabeth Child and William McGeary were able to buy their first home after prices in Phoenixdropped sharply.The housing bust is creating a new group of winners: first-time home buyers.
People who sat onthe sidelines -- often watching wistfully as their friends became homeowners -- are suddenly ina position to grab some great deals. Indeed, first-time home buyers made up 41% of all buyers atthe end of 2008, up from 36% in 2006, according to a recent survey from the National Associationof Realtors.
The new buyers are being lured in by home prices that are down about 25% from their peak levelsin mid-2006, according to the S&P/Case-Schiller Index. In some markets, prices have dropped evenfurther -- slumping around 40% in Phoenix, Miami and Las Vegas. Lower mortgage rates have alsohelped make real estate more affordable, and as houses languish on the market longer, morehomeowners are willing to negotiate.
With Congress considering plans to sweeten a tax credit forfirst-time home buyers, the picture could get even brighter.
"Buyers are now coming back into those hard-hit markets to take advantage," says Lawrence Yun,chief economist for the Realtors' association. "It's a buyer's market."Ululani and Scott Larson looked for a house in the Seattle area several years ago, but held offfrom buying, deterred by the high prices.
"I felt like we were missing out, because everyoneknows it's the American dream to buy a home and build equity," Mrs. Larson says.The couple was shocked to discover recently that they could afford a four-bedroom home inFederal Way, Wash.
The assessed value of the home in January was $400,000, Mrs. Larson says.Their offer of $315,000, with a down payment of $15,000 was quickly accepted by the relocationcompany, which had had the property on the market for six months.
"Honestly, I didn't think we'dget as nice of a house as we did," Mrs. Larson says.Of course, would-be buyers need decent credit scores and the money for a decent down payment.Also, finding the right property can be a challenge for first-time buyers, who tend to beseeking less-expensive homes.
The typical first-time buyer purchased a home costing $165,000last year, according to the National Association of Realtors. Yet some of the best bargainsright now are in luxury condos and sprawling single-family houses.
"The disproportionate McMansion inventory doesn't work," says Shari Olefson, a real-estatelawyer who works in southern Florida. "Even if you qualify for the loan, there are huge overheadcosts to buying a larger home."
Still, real-estate agents and mortgage lenders are banking on first-time buyers to helpstimulate the otherwise dreary housing market. Many are holding workshops and informationsessions designed specifically for first-time buyers, addressing federal and state taxincentives for homeowners, local prices and ways to take advantage of low mortgage interestrates.
Tim Epps, a mortgage adviser in Tulsa, Okla., runs rent-vs.-buying simulations forwould-be buyers and recommends that other prospective buyers do the same long-term calculations.Mr. Epps and many mortgage lenders recommend that buyers come up with as big a down payment aspossible, even though Federal Housing Administration loans will allow some first-time buyers toenter the market with as little as 3% down. (Hud.gov has more information about FHA loanprograms designed for first-time buyers.)
"Even if [a home owner] loses some paper equity, in the long run, there are some tax benefits,"says Mr. Epps, referring to the deduction for interest paid on mortgages and the credit forfirst-time home buyers.Elizabeth Child bought a home once listed at $340,000 for $220,500.
The $7,500 tax credit for first-time buyers, which Congress passed last year, has had littleeffect on the market so far. Because the credit has to be repaid, buyers are viewing it asanother loan, industry experts say.
But the stimulus package that Congress is working on islikely to repeal the provision that requires buyers to pay the credit back and possibly enlargethe tax credit as well.For many buyers, the biggest question is whether to hold out for even better conditions.Historically, recoveries in the housing market are slow, and most experts expect the prices tostay low for some time.
That means people can take their time shopping for the right property,real-estate experts say.John Stratton, an agricultural engineer in Lisle, Ill., was serious about buying last summer butheld off from making a bid.
Some of the money he planned to use for a down payment sufferedlosses from mutual-fund investments. He's also waiting for prices in his area to go downfurther. "I can do better investing in things other than real estate," he says. "Right now, I'mnot diving in."Patience can pay off. Jen and Drew Rocky spent over a year tracking their prey before the pricewas right.
In the summer of 2006, they saw the four-bedroom, 2½-bathroom home of their dreams inSherman, Conn. The asking price was $565,000, "completely out of our price range," Mrs. Rockysays.But they didn't give up.
The Rockys kept driving by the vacant house. They had online alerts tonotify them of changes in the property's listings. They went to town hall to research the home'spublic records. As they suspected, the home was in foreclosure.
"There were liens all over theplace," Mrs. Rocky says.They bought the home in December 2007 for $410,000. "I felt so vindicated," Mrs. Rocky says. "Wegot a good deal, but I'm sure there are even better deals out there."
Monday, January 5, 2009
Other states fueling most Texas growth: Fellow citizens move here seeking jobs at same time immigration from outside U.S. falls
By MIKE SNYDER Copyright 2008 Houston Chroniclel; Dec. 22, 2008, 11:43PM
More people are moving to Texas from other states than from other countries as the state'srelatively strong employment base attracts families struggling with foreclosures and layoffs elsewhere, the Census Bureau reported Monday.
Between July 2007 and July 1, 2008, nearly 141,000 people moved to Texas from other states, compared with about 92,000 international migrants, the bureau said.
The data provide a fresh indicator of how longstanding immigration patterns into Texas are changing.
In the early years of this decade, international migration into Texas was two to three times asgreat as domestic, but the trend reversed starting in 2006.
Much of Texas' international migration historically hails from Mexico and Central America, whereimmigrants fled poor conditions. But the surging domestic migration into the Lone Star State isnow likely to come from economically depressed states such as Michigan, which lost about 46,000 residents between July 2007 and July 1, 2008.
Texas gained 484,000 residents last year, more than any other state. In percentage growth,Texas' 2 percent tied for third with North Carolina and Colorado behind Utah, 2.5 percent, and Arizona, 2.3 percent.
Domestic migration in Texas last year was almost three times what it was in 2005. It peaked in2006, when an influx of Louisiana residents displaced by Hurricane Katrina contributed to about 220,000 Texas domestic migrants.
Karl Eschbach, the state demographer, said Texas has continued to produce jobs while employment declined in many other states. He said this was the key factor driving the increased domestic migration.
"For the past several years, job growth in the United States means Texas," Eschbach said. "The Texas economy has so much outperformed the rest of the country."
More people are moving to Texas from other states than from other countries as the state'srelatively strong employment base attracts families struggling with foreclosures and layoffs elsewhere, the Census Bureau reported Monday.
Between July 2007 and July 1, 2008, nearly 141,000 people moved to Texas from other states, compared with about 92,000 international migrants, the bureau said.
The data provide a fresh indicator of how longstanding immigration patterns into Texas are changing.
In the early years of this decade, international migration into Texas was two to three times asgreat as domestic, but the trend reversed starting in 2006.
Much of Texas' international migration historically hails from Mexico and Central America, whereimmigrants fled poor conditions. But the surging domestic migration into the Lone Star State isnow likely to come from economically depressed states such as Michigan, which lost about 46,000 residents between July 2007 and July 1, 2008.
Texas gained 484,000 residents last year, more than any other state. In percentage growth,Texas' 2 percent tied for third with North Carolina and Colorado behind Utah, 2.5 percent, and Arizona, 2.3 percent.
Domestic migration in Texas last year was almost three times what it was in 2005. It peaked in2006, when an influx of Louisiana residents displaced by Hurricane Katrina contributed to about 220,000 Texas domestic migrants.
Karl Eschbach, the state demographer, said Texas has continued to produce jobs while employment declined in many other states. He said this was the key factor driving the increased domestic migration.
"For the past several years, job growth in the United States means Texas," Eschbach said. "The Texas economy has so much outperformed the rest of the country."
Tuesday, December 23, 2008
Jaime Ulmer Real Estate Blog: Great Article about Texas Real Estate, The Federal Tax Credit, & Why to Use a Texas Realtor
First-time buyers can get a no-interest $7,500 loan
By MARTY KRAMER
Those either/or deals you sometimes see on car commercials have always bugged me. They offer you a discount on the price of the car or an interest-free loan. To me, it’s not an interest-free loan when the car costs $3,000 more if I don’t pay cash.
Thankfully, the U.S. government’s offer of an interest-free $7,500 loan for first-time homebuyers is straightforward. Actually, they call it a tax credit. And it is. If you’re a first-time buyer, you can get an income-tax credit of 10% of the purchase price of the home up to a maximum credit of $7,500.
What does a tax credit do for you? If you have an income-tax bill of $10,000 and qualify for $7,500 tax credit, you would be required to pay only $2,500 in taxes. If you had a $5,000 income-tax liability, you would actually receive a $2,500 tax refund for the year.
I mentioned that the credit is for first-time homebuyers. The government considers you a first-time buyer if you (and your spouse, if married) haven’t owned a principal residence in the last three years. The credit begins to phase out for individuals with gross income higher than $75,000 and joint filers with incomes above $150,000. Once you get to incomes of $95,000 (single filer) and $170,000 (joint filer), the credit is completely phased out.
Although this is called a tax credit, I said it was an interest-free loan. That’s because you must pay the credit amount back over a period of 15 years. If you qualified for the full $7,500 credit, you would pay back $502.50 per year.
If you sell your home before the 15-year repayment period, you must pay back the remaining amount from your home-sale proceeds. If there’s no gain on the sale of the property, the remaining balance does not have to be repaid.
There is a bit of a catch, I suppose. This buyer incentive is only available until June 30, 2009. So if you’re considering making that leap to homeownership, there’s a real incentive to act in the next few months. Even if you purchase a home in 2009 (before June 30), you may be able to take advantage of the credit on your 2008 tax return that you file in 2009. As with any decisions you make that have tax implications, be sure to discuss this with your tax professional. And when you want assistance in making good real estate decisions, you’ll want to rely on the expertise of a Texas REALTOR®.
Article can be found HERE.
By MARTY KRAMER
Those either/or deals you sometimes see on car commercials have always bugged me. They offer you a discount on the price of the car or an interest-free loan. To me, it’s not an interest-free loan when the car costs $3,000 more if I don’t pay cash.
Thankfully, the U.S. government’s offer of an interest-free $7,500 loan for first-time homebuyers is straightforward. Actually, they call it a tax credit. And it is. If you’re a first-time buyer, you can get an income-tax credit of 10% of the purchase price of the home up to a maximum credit of $7,500.
What does a tax credit do for you? If you have an income-tax bill of $10,000 and qualify for $7,500 tax credit, you would be required to pay only $2,500 in taxes. If you had a $5,000 income-tax liability, you would actually receive a $2,500 tax refund for the year.
I mentioned that the credit is for first-time homebuyers. The government considers you a first-time buyer if you (and your spouse, if married) haven’t owned a principal residence in the last three years. The credit begins to phase out for individuals with gross income higher than $75,000 and joint filers with incomes above $150,000. Once you get to incomes of $95,000 (single filer) and $170,000 (joint filer), the credit is completely phased out.
Although this is called a tax credit, I said it was an interest-free loan. That’s because you must pay the credit amount back over a period of 15 years. If you qualified for the full $7,500 credit, you would pay back $502.50 per year.
If you sell your home before the 15-year repayment period, you must pay back the remaining amount from your home-sale proceeds. If there’s no gain on the sale of the property, the remaining balance does not have to be repaid.
There is a bit of a catch, I suppose. This buyer incentive is only available until June 30, 2009. So if you’re considering making that leap to homeownership, there’s a real incentive to act in the next few months. Even if you purchase a home in 2009 (before June 30), you may be able to take advantage of the credit on your 2008 tax return that you file in 2009. As with any decisions you make that have tax implications, be sure to discuss this with your tax professional. And when you want assistance in making good real estate decisions, you’ll want to rely on the expertise of a Texas REALTOR®.
Article can be found HERE.
Wednesday, December 3, 2008
Reuters News Story: US mortgage applications post largest gain ever
By Julie Haviv
NEW YORK, Dec 3 (Reuters) - U.S. mortgage applications surged by the largest amount on record last week as a new Federal Reserve program pushed interest rates down to their lowest level in more than 3 years, data from an industry group showed on Wednesday.
The U.S. housing market is suffering the worst downturn since the Great Depression as a huge supply of unsold homes, tighter lending standards and record foreclosures push down home prices.
But, the latest weekly data from the Mortgage Bankers Association showed potential borrowers were lured by enticing mortgage rates, which dropped dramatically after the Federal Reserve unveiled a plan last week to buy up to $500 billion of mortgage securities backed by government-sponsored enterprises, Fannie Mae (FNM.P: Quote, Profile, Research, Stock Buzz), Freddie Mac (FRE.P: Quote, Profile, Research, Stock Buzz), and Ginnie Mae.
"This clearly was an early holiday gift from the Federal Reserve to mortgage holders and home shoppers," said Mike Larson, a real estate and interest rate analyst at investment firm Weiss Research in Jupiter, Florida.
"But, the MBA's data is only for submitted applications, not closed loans, so a good amount may get rejected because qualifying standards are tighter and many applicants will probably find they do not have the equity to refinance given the decline in home prices," he said.
As long as unemployment is climbing and the economy is weakening, the impact on the home purchase market should be much more muted than the refinance market, he said.
READ MORE
Friday, November 7, 2008
Texas’ Real Estate Markets Healthier Than Most
Hey! Here's a great article by David Jones, a senior editor with the Real Estate Center at Texas A&M University.
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Texas’ real estate markets never caught the housing bust bug that spread like the flu across most of the United States. But now the doctors tell me that the Lone Star State is showing some of the symptoms that flattened residential sales nationwide.
Jim Gaines, Ph.D., an economist for the Real Estate Center at Texas A&M University, keeps his finger on the pulse of the state’s major housing markets. If one market misses a beat, he knows it.
First, the bad news. Because Texas housing markets were at a peak in 2007, it should come as no surprise that Gaines’ latest housing market checkup shows widespread weak home sales.
Statewide, existing home sales in May 2008 were down 15.4% from a year ago. Again, that was to be expected as the Texas building and sales bubbles had to subside eventually.
Lubbock and McAllen received the best reports. Home sales in the High Plains market declined only 0.5%, the least of any examined. McAllen’s fell 1.7%. By comparison, sales of existing homes were down 20.6% in Austin, 14% in Dallas, 33% in El Paso, 13.8% in Fort Worth, 15.7% in Houston, and 23% in San Antonio.
Texas home prices holding steadyThe good news for Texas homesellers is that prices are holding. That’s in stark contrast to what’s happening in other parts of the country. The national median home price fell by 1.8% in 2007, which was the first time a negative change had been recorded since the 1960s. By May 2008, U.S. home prices were already down another 6.8%.
In contrast, the statewide median price for an existing home in Texas is $151,300, up 1.4% from May 2007.
Lubbock had the state’s highest price increase during the year – up 11.1% – with a median of $113,100. Amarillo’s median of $122,200 was 7.4% higher than a year ago. Austin’s 6.1% increase pushed its median to $194,700. El Paso’s median was $137,800, up 5.8% in 12 months.
Home prices in some areas of Texas did fall in the last year. Beaumont’s median of $127,600 is 7% lower. McAllen is down 5.5% to $100,400.
Statewide inventory higher than normalOne of the vital signs Gaines keeps an eye on is months of inventory on the market. That is, how many months would it take to sell all the existing homes in an area at the current sales pace? About six months is considered normal. In general, the bigger the inventory, the sicker the patient.
Texas has an overall inventory of 6.9 months. Nationally, the existing home inventory is 10.4 months (and the new home inventory is 11 months).
El Paso and McAllen are two Texas cities with bulging inventories. McAllen has the biggest stock of unsold homes – 15.2 months. El Paso is close behind at 12.1 months.
Cities with notably small inventories include Amarillo (5.5 months), Austin (5.7 months), and Lubbock (5.5 months).
“Getting back to normal” is how many real estate people describe today’s Texas market. The doctors at the Real Estate Center agree with that diagnosis.
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This article - and others - can be found by clicking this link.
Have a great day!
Jaime
Click here to visit my website!
_____________________________
Texas’ real estate markets never caught the housing bust bug that spread like the flu across most of the United States. But now the doctors tell me that the Lone Star State is showing some of the symptoms that flattened residential sales nationwide.
Jim Gaines, Ph.D., an economist for the Real Estate Center at Texas A&M University, keeps his finger on the pulse of the state’s major housing markets. If one market misses a beat, he knows it.
First, the bad news. Because Texas housing markets were at a peak in 2007, it should come as no surprise that Gaines’ latest housing market checkup shows widespread weak home sales.
Statewide, existing home sales in May 2008 were down 15.4% from a year ago. Again, that was to be expected as the Texas building and sales bubbles had to subside eventually.
Lubbock and McAllen received the best reports. Home sales in the High Plains market declined only 0.5%, the least of any examined. McAllen’s fell 1.7%. By comparison, sales of existing homes were down 20.6% in Austin, 14% in Dallas, 33% in El Paso, 13.8% in Fort Worth, 15.7% in Houston, and 23% in San Antonio.
Texas home prices holding steadyThe good news for Texas homesellers is that prices are holding. That’s in stark contrast to what’s happening in other parts of the country. The national median home price fell by 1.8% in 2007, which was the first time a negative change had been recorded since the 1960s. By May 2008, U.S. home prices were already down another 6.8%.
In contrast, the statewide median price for an existing home in Texas is $151,300, up 1.4% from May 2007.
Lubbock had the state’s highest price increase during the year – up 11.1% – with a median of $113,100. Amarillo’s median of $122,200 was 7.4% higher than a year ago. Austin’s 6.1% increase pushed its median to $194,700. El Paso’s median was $137,800, up 5.8% in 12 months.
Home prices in some areas of Texas did fall in the last year. Beaumont’s median of $127,600 is 7% lower. McAllen is down 5.5% to $100,400.
Statewide inventory higher than normalOne of the vital signs Gaines keeps an eye on is months of inventory on the market. That is, how many months would it take to sell all the existing homes in an area at the current sales pace? About six months is considered normal. In general, the bigger the inventory, the sicker the patient.
Texas has an overall inventory of 6.9 months. Nationally, the existing home inventory is 10.4 months (and the new home inventory is 11 months).
El Paso and McAllen are two Texas cities with bulging inventories. McAllen has the biggest stock of unsold homes – 15.2 months. El Paso is close behind at 12.1 months.
Cities with notably small inventories include Amarillo (5.5 months), Austin (5.7 months), and Lubbock (5.5 months).
“Getting back to normal” is how many real estate people describe today’s Texas market. The doctors at the Real Estate Center agree with that diagnosis.
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Jaime
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