Archives for February 2011

Pending home sales fell in January

Pending home sales have fallen.The National Association of Realtors Pending Home Sales Index dropped 2.8 percent in January, falling from a mark of 91.5 in December to 88.9 last month.

Despite the drop, pending housing sales are doing much better than they were last June (http://www NULL.marketwire NULL.com/press-release/Pending-Home-Sales-Decline-in-January-1402874 NULL.htm), when the rate was 20.6 percent lower. The pace of sales for the month of January was 5.36 million. This is slightly higher than the expected number.

"The housing market is healing with sales fluctuating at times, depending on the flow of distressed properties coming on the market," said Lawrence Yun, the chief economist for the National Association of Realtors.

More good news for Houston real estate is that the index indicated that the South rose 1.4 percent to 97.7. The number is currently 0.4 percent below last January, but is well above the national average.

The Houston real estate market has been higher in many areas than the rest of the country, but it is still not out of the woods. Demand for Houston homes is still where it was a few years ago.

Americans are confident housing market will stay steady

Recent survey shows many Americans believe the housing market is steadyingA recent poll discovered that 78 percent of Americans think the current housing market will continue to be stable, or even improve, over the next calendar year. About 61 percent of those polled still think the recession will make the economy worrisome over the next year.

The poll, completed by Fannie Mae (http://www NULL.fanniemae NULL.com/newsreleases/2011/5314 NULL.jhtml;jsessionid=DVK520UE3AYTHJ2FECISFGA), was conducted from October to December of last year. The persons polled were both homeowners and renters, questioning their confidence of the current housing market and economy.

"More Americans believe that housing prices will remain stable over the next year. We also are seeing encouraging signs in the positive attitudes toward homeownership among younger Americans, despite the severe impact of the housing crisis on Generation Y," said Doug Duncan, the vice president and chief economist of Fannie Mae.

Duncan added that most of those polled do not have enough confidence in the economy and are increasingly concerned if they plan to buy a home in the future.

The Houston real estate is faring much better than the rest of the country. Local home prices have risen for the past several months, according to the Houston Association of Realtors, while the national market has struggled.

Survey: Sellers fare better using Realtors than trying on their own

Sellers tend to fare better using Realtors than selling on their own.A recent survey discovered that those who sell their houses with a Realtor had a 50 percent higher success rate than those who went the "for sale by owner" route.

The survey was done by HomeGain (http://www NULL.prweb NULL.com/releases/2011/2/prweb8153150 NULL.htm), and questioned over 1,000 homeowners. The closing rate for those who used a Realtor was nearly 50 percent higher than those who decided to sell by themselves. Out of the people that were polled, 83 percent used a realtor, while 17 percent attempted to sell their home without one.

Louis Cammarosano, the general manager of HomeGain. said, "It is especially striking that homeowners fare significantly better in selling their homes using a Realtor than selling on their own.”

Cammarosano added that it says something about the abilities of Realtors to be able to have such a success rate selling homes.

Currently, the Houston real estate market is faring better than a great deal of the country, but it is still a difficult market for sellers. Specifically, Houston foreclosures are selling for much lower than other types of sales, a trend that is seen across much of the U.S.

Commercial vacancy rates declining, rent rates are increasing

Commercial vacancy rates are decliningVacancies are predicted to lower in the office sector, industrial real estate, retail and multifamily rentals over the course of the next year, and rent is forecast to go up 3.4 percent this year.

The expected vacancy rate for commercial real estate in 2011 is believed to decline from 16.5 percent to 16.0 percent for the office sector; from 14.2 to 12.9 percent for industrial real estate; 13.0 percent to 12.9 percent for retail and from 5.8 percent to 4.9 percent for multifamily rentals, according to a report by the National Association of Realtors (http://www NULL.realtor NULL.org/press_room/news_releases/2011/02/commercial_rates).

This is encouraging news for potential Houston real estate investors, and the fact that rent is predicted to rise, is positive news for the next year.

"Rising apartment rent in combination with rising oil prices could push the overall inflation rate beyond a comfort level, which could then force the Federal Reserve to raise interest rates later this year or early in 2012," NAR chief economist Lawrence Yun said.

Houston real estate buyers will have to keep a close watch on the market, as these projections will have a big impact on decision making over the next 12 months.

New home sales declined more than expected in January

New home sales declined in Janaury.New housing sales were below forecasted January figures, which could be in direct correlation to the poor weather across much of the country, as well as declines in the western and southern states.

Snow fell in great quantities across large areas of the U.S. during the month, which is being blamed in part for the poor performance, but other, more tangible reasons that the new housing market has struggled are prevalent.

The predicted rate for new single-family home sales January was 349,000, but the actual adjusted annual rate of 284,000 was 12.6 percent below the December rate of 325,000, the U.S. Department of Commerce announced. Sales in the Houston real estate market played into a 13 percent drop in demand in the South. Demand in the West dropped 37 percent.

"There has been no recovery in housing starts, permits or new-home sales. We're in a period where demand and supply will run well below average," Credit Suisse senior economist Jonathan Basile told Bloomberg. Basile added that the current demand on the housing market is not strong.

The Houston real estate market has recently seen strong numbers relative to the rest of the country. Home prices in Houston have risen for several consecutive months.

Fixed-rate mortgage rates drop below five percent

Mortgage rates have declined again.Thirty-year fixed-rate mortgages dropped this week, going below 5 percent, which is encouraging news for the Houston real estate market, since more people are likely to apply for mortgages and purchase homes.

According to the Freddie Mac's (http://www NULL.freddiemac NULL.com/pmms/release NULL.html?week=8&year=2011) latest weekly survey, 30-year fixed-rate mortgages are averaging 4.95 percent. Last week, the rate was at 5 percent, and a year ago, it was 5.05 percent. The report stated that the Southwest's current FRM is 4.98 percent, which is slightly higher, but could be a welcome sign to prospective buyers of Houston real estate.

"Low mortgage rates and home prices are sustaining affordability in the housing market. Existing home sales rose for the third consecutive month in January and were at the strongest pace in eight months," Frank Nothaft, vice president and chief economist for Freddie Mac said, citing a National Association of Realtors report.

According to that report, the Northeast was the only region of the country that sustained a sales decrease during the month of January, as overall sales topped their year-ago levels.

Chronicle: Completion of long-awaited highway to provide new transportation options

New highway to offer new commuter routesThe ring road Houston's city planners envisioned as long ago as 1952 is finally complete, according to the Chronicle, as the last stretch of the Sam Houston Tollway opened last weekend.

The director of the Harris County Toll Road Authority, Peter Key, told the newspaper the project is primed to be an example of a successful infrastructure project.

"Public infrastructure projects in this country, in urban areas in particular, tend to be very expensive, and they tend to take a lot of time to bring to completion. Here's something that's actually coming to a conclusion," he said.

The $400 million spent to build the road will be paid for by EZ Tag fees, and the newspaper says that the growing population in the northeastern part of Harris County will travel on it frequently.

The area's new highway could have a number of effects on Houston property values nearby. Easier transit could reduce traffic congestion, but properties from which road noise is audible could see their sale prices sink, experts say.

Texas foreclosure sale rates below the 2010 national average

Foreclosure sales are less common in Texas than in other states.The Texas real estate climate continues to be better than the national market, as the sales of Houston foreclosures continue to be lower than average.

According to RealtyTrac (http://www NULL.realtytrac NULL.com/content/press-releases/2010-year-end-and-q4-foreclosure-sales-report-6402), foreclosure sales are 25.96 percent of all home sales nationwide. The average for the state of Texas is 12.88 percent. This is reassuring for prospective Houston-area residents, as it may show the housing market improving in the area.

Despite this, the national average is still struggling. James J. Saccacio, chief executive officer of RealtyTrac said that while foreclosures are still prevalent, they continue to sell for less than the average price. With less consumer demand, market will be sluggish.

Saccacio added, "The catch-22 for 2011 is that while accelerating foreclosure sales will help clear the oversupply of distressed properties and return balance to the market in the long run, in the short term a high percentage of foreclosure sales will continue to weigh down home prices."

Texas’ numbers are far lower than some other states. For example, foreclosures made up 57 percent of sales in Nevada.Foreclosure sales in Houston are actually more common that the rest of the state. According to the Houston Association of Realtors, they made up more than 20 percent of local home sales in January.

Changing neighborhoods illustrate shifts in Houston property market

Changing demographics show Houston's diversity.Large-scale shifts in the demographic information reported in the last census are an indicator of the almost dizzying rate at which the societal and ethnic makeup of Houston is changing, according to a report in the Chronicle.

Some changes brought negative consequences, the paper said. Census tract 5501 saw the sharpest decrease in the number of white residents – 70 percent since the last measurement – and the Chronicle describes large numbers of vacant storefronts and housing subdivisions getting more run-down.

By contrast, tract 4553's 80-fold increase in the number of Hispanic residents – the largest in the area – has brought a seeming boom to the area, the paper says, pointing out the area's rapid development and numerous new housing developments. As well, tract 6731 – which saw the biggest influx of Asian residents – now includes many luxury apartments and an upscale shopping center, La Centerra.

One thing Houston's suburbs have in common is the pace at which growth and decline occur, experts say, as rapid population shifts cause property values to fluctuate wildly.

Report: Foreclosures on Houston homes down

Foreclosures down in HoustonThe number of houses in Houston being successfully foreclosed at a recent auction in Harris County dropped, even though more properties were listed than last month, Foreclosure Information and Listing Service told the Houston Business Journal.

On a yearly basis, the 747 properties which were foreclosed during the group's auction earlier this month represents a nearly 16 percent decline from February 2010, which saw 887 Houston homes headed to the block, the publication said, though it added that there was a 5 percent increase in the number of commercial and residential properties listed for foreclosure last month.

Since most homeowners manage to get caught up on their mortgage payments before their property is actually foreclosed, the Business Journal said, the number of homes auctioned off is almost always a lot smaller than the number listed.

It seems, then that a canny Houston property buyer may still be able to find a deal at a foreclosure auction, but the long-term trends in the area's housing market indicate a transition to more growth and stability in the future.

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