A recent Canadian study finds that the actual words real estate agents and home sellers use to advertise their properties has a significant impact on how quickly the home will sell, and what price it fetches.
Researchers from the University of Guelph in Ontario analyzed more than 20,000 home listings, and found that the use of "beautiful" instead of "move-in condition" could make as much as a 5 percent difference in the final selling price.
In addition, descriptions that emphasized the attractiveness of the property were more effective than those which focused on value and prices. Although experts said that each market may behave differently.
"There's usually something that can be said in a positive way which will force a buyer reading an ad to see opportunities," Catherine Lindstadt, a broker at Prudential Douglas Elliman Real Estate in New York, told Newsday (http://www NULL.newsday NULL.com/classifieds/real-estate/making-house-for-sale-sing-in-your-ad-1 NULL.2708100).
Another study from the University of Texas at San Antonio (http://faculty NULL.business NULL.utsa NULL.edu/tthomson/papers/Real_Estate_AgentRemarksJRER20_205_215 NULL.pdf) showed that Realtors' comments in the description section of MLS listings can also have an effect, and that comments that discussed the home's features and used the word "updated" resulted in higher selling prices.
Home listing word choice makes a big impact
Texas housing market shows improvement
A report from the Federal Reserve Bank of Dallas (http://www NULL.dallasfed NULL.org/research/indicators/2011/tei1103 NULL.pdf) says that the Texas real estate market showed notable improvements in January, as home sales increased.
The report says that statewide, existing-home sales rose for the second straight month in January, rising 3 percent compared to December.
Home construction numbers also showed positive movement. According to the report, housing permits jumped 4.3 percent from December to January – the fourth straight month in which permits have increased. Also, housing starts rebounded by jumping 7.7 percent during the month after a 7 percent drop-off in December.
At the same time, home prices, according to data from Federal Housing Finance Agency, fell to close out 2010, sliding 1.6 percent during the fourth quarter of 2010, creating more affordable conditions for those looking at Houston properties.
Prices for Houston homes, however, have moved in the opposite direction. According to the Houston Association of Realtors, the average home price in the local market gained 2.2 percent in January, reaching its highest level ever for that month.
Mortgage rates fall sharply
After rising to start the year, mortgage rates have declined once again, giving those looking at Houston homes more flexibility when looking to buy properties.
According to Freddie Mac (http://www NULL.freddiemac NULL.com/pmms/release NULL.html?week=9&year=2011), the average rate for a 30-year fixed-rate loan last week was 4.87 percent which is down from 4.95 percent the previous week. Rates for 15-year FRMs also fell, dropping from 4.22 percent to 4.15 percent.
"Mortgage rates saw an overall improvement this week. Interest rates for 30-year fixed mortgages were almost 0.2 percentage points below this year's high set just three weeks ago," said Freddie Mac chief economist Frank Nothaft. "This means that homebuyers could now expect to pay $263 less per year on a $200,000 loan."
However, Nothaft also expressed concern with demand in the housing market, with low levels of new home sales and two consecutive drops in the National Association of Realtors' Pending Home Sales Index.
The pending sales index dropped 2.8 percent in February to a reading to 88.9, which is 1.5 percent below the 90.3 mark of a year ago. However, it is still higher than most readings from late last year, when the market was recovering from the absence of the homebuyer tax credit.
New loan rules to promote 20 percent down payment
A number of media reports have said that new mortgage regulations, which are expected to be officially proposed soon by government regulators, may result in additional fees for borrowers who don't put 20 percent down.
The new regulations will lay out what constitutes a "qualified residential mortgage" – or QRM – for mortgage lenders. The financial reform bill last year said that banks need to keep 5 percent of the risk from non-qualifying loans before selling them to investors, forcing them to keep some "skin in the game" and not leave investors with bad mortgages.
Borrowers who don't meet the final QRM guidelines will likely have to pay higher interest rates or fees for a loan, or go through the Federal Housing Administration.
According to published reports, the regulations will require borrowers to make a 20 percent down payment on mortgages. However, half of that 20 percent is allowed to be a gift, and loans that are eventually purchased by government-run mortgage giants Fannie Mae and Freddie Mac will be exempt.
If the rules go into effect, it may make more sense for people to try to save up before buying Houston homes. A 20 percent down payment on a median-priced local home last month would have been more than $27,000.
Texas ranked among top job creation states
Affirming its place as one of the top-performing states in the country in the aftermath of the recession, a recent Gallup (http://www NULL.gallup NULL.com/poll/146402/North-Dakota-Washington-Best-Job-Markets-2010 NULL.aspx) poll finds that Texas has one of the top job markets in the country.
According to the report, Texas ranked as the eighth-best job market in the country, with a job creation index of 14 – meaning there is a 14 percentage point difference between the number of workers who feel their companies are expanding and those that are contracting.
Texas' rating was double the overall average of 7. Nationwide, 28 percent of respondents said their companies were hiring, while 21 percent said they were contracting.
It's the third consecutive year in the top 10 for Texas. The top state in the country for jobs, according to the report, was North Dakota, which has an unemployment rate of just 3.9 percent, according to the Department of Labor.
Strong jobs numbers have also boosted the Houston real estate market. According to data from the Texas Workforce Commission, businesses in the area added nearly 23,000 jobs last year.
Pending home sales fell in January
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
A 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
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
Vacancies 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.
Fixed-rate mortgage rates drop below five percent
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.
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