Is 2012 going to be a banner year for the Houston real estate market? Only time will tell, but so far all of the news has been positive.
Sales have been going up month after month, prices have been steady or rising, and the housing inventory is getting closer and closer to a stable (neither a “buyers” or “sellers” market) here in Houston. A stable market is six months of inventory. Buyers seem to have finally gotten the message that the “bottom” now seems to be history. Sellers are also figuring out that the value that they have lost in the current homes, can be made up by the cheaper costs of their new home and the bargain basement interest rates. The inside the loop market is very lucky in that we never really had a “bubble” to burst. Prices dropped about 15% over all since the peak in 2007, but that was mainly due to the fact that it took so much longer for a home to sell over the last few years because of jittery buyers. Prices are now stable and slowly creeping back up.
Rental prices have also been rising dramatically, which means that for some people it is probably cheaper in the long run to buy. There are attempts in Congress to limit the mortgage interest tax deductions, but what I have read on this indicates that even if a limit were enacted, the limit is high and would not affect the vast majority of homeowners.
Another good sign is that new home builders are starting to build again because of pent-up demand, especially in the suburbs where new construction is most popular. There is an unfinished new construction in my own neighborhood that sat uncompleted for almost two years, and it is now being finished (I actually was the listing agent for the tear down that once sat on the property). The REALLY good news is that the mortgage interest rates are at the lowest that they have been in many decades. The mortgage loan process is also finally starting to loosen up after swinging hard in the opposite direction in a seemingly knee-jerk reaction to the housing crash in many other areas of the country. There are still a number of foreclosures in the suburban market, but inside the loop there are very few. Most of the “good” foreclosures have been snapped up, and those that are left seem to be mostly in disrepair and are only suitable for investors or buyers with lots of cash and time to make repairs.
On the other hand…
The Greek “tragedy” also seems to be stabilizing, but is still shaky. The jury is still out on how the world economy will be affected in the long run. The one big “IF” in all of this, is gasoline prices. The continuing increase in prices – due to the commodities speculators market – could possibly bring the recovering US economy to a grinding halt, but could also signal a huge increase in buyers looking to move in closer to the central employment areas. Rising oil prices also has been historically good news for the Houston area.
The traditional busy spring real estate season is just about here, so I’ve got my fingers crossed!
Finally, mark my words. I’ve been telling my clients this for months: These are the days that many people will eventually look back on and say to themselves, “if only I’d taken advantage of the prices and the interest rates back then!!”.
Here are some links to related stories:
Your comments and thoughts are appreciated.