SE Texas Real Estate Talk

New Construction Costs In Southeast Residential Market

Part two:  What's it cost to build a new home in Southeast Texas.

Looking at the sales data there is a clear pattern that develops when analyzing the new construction costs in Southeast Texas.  Here's a graph showing sales price by area.  These are homes that have sold.  This shows the price the builder was willing to sell for. In most cases we will assume they sold for a profit. 

 

The range is fairly narrow.  On the low side there are a few sales under the $100 per square foot mark.  On the high side there have been a few sales that approach $140 per square foot.  The neighborhoods where new construction has sold above $120 per square foot are:  Dominion Ranch in Port Arthur, Westchase in Beaumont, Barrington Heights in Beaumont, and Fairfield in Beaumont.  Interesting that there haven't been any new construction sales in Lumberton that closed for over $120 per square foot this quarter.

Here's a graph that shows the range from low to high.

 

It is a pretty safe bet if you want to buy new construction in Southeast Texas you will need to budget at least $100 per square foot of living space that you desire.  If you add some bells and whistles and a prime Beaumont location be prepared to spend around $120 per square foot.  If you really want the newest and best materials then you'll be pushing the $130 per square foot mark. 

Now the builders aren't going to tell us what their profit margins are but I've seen them knock about $8 per square foot off once a home has stayed on the market a couple months.  Two years ago that was not seen in Southeast Texas.  In 2006, Builders didn't have to negotiate.  Full price or no sale.  That was then.  2009 is a whole new world.  Buyers have a lot more control.  We don't know how long the builders will continue taking offers but its safe to say until the economy starts to pick up and the inventory number start to decline home builders will still be considering all reasonable offers. 

One last piece of information to chew on.  Southeast Texas isn't home to any of the national builders who use the economies of scale to their advantage.  In Houston for example you can find new construction for less than you can in Southeast Texas.  Here you'll find a much smaller group of home builders but the flip side of that is you will get a higher spec level in a Southeast Texas home.  New home buyers can expect granite counter-tops, tray ceilings, crown molding, covered porches and that's just naming a few upgrades that are common in the area.  

So if you think $120 a square foot seems high, its not if you are buying new construction in Southeast Texas.

New Construction - Active and Sold - In Southeast Texas this Quarter

Here's a post that was requested.  The request asked a big question, "What is the cost of new construction in Texas?"   This one is going to be a multi-part post.  So here we go.  Since May 2009 there have been 38 sales recorded in the Beaumont MLS that are classified as new construction.  There are 23 sales pending - under contract- but not closed as of this post.  And there are 116 active listings that are classified as new construction. 

Part one of this answer will deal with areas in Southeast Texas where there are new construction homes for sale and the areas where the most sales have occurred.  Here's a graph.

 

Most of the new construction is in Beaumont and Lumberton.  Not a surprise for the locals.  Those have been the main residential growth areas for a while now.  Its good to see there is some new construction at the beach. 

Its also interesting to see the median price of new construction by area and the median price of homes that have sold since May. Here's a graph for that.

 

The highest median sales price is still in Beaumont on the west side of town.  The beach and Pinewood have higher asking prices for new construction but no sales this quarter.  Average days on the market for new construction sales is 128.  The average sale price for the whole Southeast Texas market is $237,000. 

Now to really get to the heart of the question that I was asked, "What is the cost of new construction in Texas", we really have to look at the price per square foot that the builders are building for and the price per square foot that they are selling for.  With 177 new construction homes that's going to take me a bit more time to input and analyze the price per square foot data. 

Once we can see the price per square foot -by area this will really tell us what builders are willing to build for and what they are willing to sell for.   The analysis will give you a really good idea of the cost of new construction in Southeast Texas.  I know your dying to know more, so tune in tomorrow.

Psst. Past It Along, National Home Prices Increase

Did you see the heading on CNNMoney.com?  Here's one we've been waiting for, "Home prices up for 1st time in 3 years".  Really, I didn't make it up.  Its there on their website. They even got an interview with Robert Shiller, the Yale economist who was the most vocal about predicting the housing bubble.  Here's what he has to say now.  If you've got 4 minutes to spare, watch what he thinks is next up for the national housing market.

Pinewood, Sour Lake Residential Home Sales 2009 Statistics

 

Just West out Hwy 105 is a great neighborhood called Pinewood.  A special request came in for some market stats on Pinewood and I'm happy to provide some interesting housing data.

• There are 11 homes for sale in the Beaumont MLS with an average list price of $230,745.
• In 2009 there have been 7 sales with an average sales price of $177,829.
• The most expensive home currently for sale is a 4,000 square foot plus home on W. Pineshadows.  The asking price is $435,000.
• The days number of days homes have spent on the market is 98 which is a little less than the Beaumont MLS average. 
• Sellers were able to average 96% of their asking price for their negotiated sales price.
• The lowest sale was $110,000 or $55.89 per square foot.
• The highest sale was $272,400 or $83.66 per square foot. 
• Of the seven sales, four buyers have used conventional financing, two paid cash, and one used a VA loan. 

Of course, the statistics go on and on but those are the highlights.  Pinewood is a neighborhood with older homes and new construction.  When you are looking at sales data you want to compare apples to apples.  So don't take the sales price of an older home compare that to the price of a brand new home.  It doesn't work that way even if we -as buyers- wish that it did. 

Any more questions on Pinewood just let me know.  If you are curious about your neighborhood market statistics, I'd be glad to provide you some information.  Happy house hunting.

Getting A Loan? Here's What You Need To Know About the Third Party Financing Addendum

Almost all of us take out a mortgage when we purchase a home.  In Texas, when you make an offer that is contingent upon financing approval to complete the purchase, you will want to sign a third party financing addendum. 

The Texas Association of Realtors addressed a few of the components of this addendum in a recent email update to Realtors.  This is information they shared with members in the recent update.

Third Party Financing Condition Addendum
I'm having difficulty understanding the terms and issues involving the Third Party Financing Condition Addendum. How does this addendum work?

Prior to the adoption of the current addendum, there was considerable uncertainty as to when and how it was to be determined if the buyer had satisfied the lender's financial requirements. Often the dispute concerning the lender's approval would arise many days after the time period for approval under the prior addendum had expired, and the argument would be whether approval had in fact been obtained within the days specified.
In order to give all parties some certainty about this approval process, the addendum was changed to put the burden on the borrower/buyer to provide written notice to the seller within the time specified if the buyer cannot obtain the necessary financial approval. This would seem to be appropriate, since the buyer is in the best position to obtain that information from the lender and, after all, it is the buyer's contingency. If the buyer is not satisfied that he has obtained financial approval relating to his assets, income, and credit history within the time provided, the buyer must give timely written notice to that effect to the seller. If the buyer gives a timely notice, the contract terminates, and the earnest money is refunded to the buyer. If the buyer does not give such written notice to seller within that time period, the contract will no longer be subject to the buyer's financial approval regarding assets, income, and credit history.
The addendum does not require that the buyer obtain financing approval within the specified time period. Rather, it provides an opt-out period for a buyer who does not believe he can obtain that approval.
As was the case before this change, the lender's approval of the property as satisfying the lender's underwriting requirements is separate from the buyer's personal qualifications.

*Quoted from The Texas Association of Realtors.

As a home buyer who's not a real estate professional, here's the top 5 things you need to know about the addendum. 

1. It is the buyers responsibility to give written notice to the seller if they are unable to get their loan approved.

2. If the buyer gives written notice within the time frame then they will be able to terminate the contract and the earnest money will be refunded.

3. The buyer does not have to have loan approval within the given time period.

4. The home must still meet the lender's underwriting requirements regardless of the time frame for financing approval.

5. If the property does not appraise for the purchase price then the buyer has the option of proceeding with the purchase or terminating the contract.

That's a quick and simple explanation of the third party financing addendum.  As with all contracts, if you have specific legal questions when you should consult an attorney.  If you are starting a home search, you will find there is a lot of paper work that comes along with buying a home.  If you are getting a mortgage to buy your home then you will want to make sure you are signing a third party financing addendum.  Its for your protection.

Hot Spots To See In Beaumont. Take A Quick Video Tour of Town.

Today, I had the opportunity to attend a unique training event put on by the Beaumont Visitor and Convention Bureau.  They call it "Destination Training" and its for anyone who works in a field that promotes Beaumont.  Some of our hot spots on the tour were The McFadden Ward House, The Texas Fire Museum, The Neches River Front Park and boat tour, The Energy Museum and the Southeast Texas Art Museum.  It was a full day of seeing everything Beaumont has to offer.  And believe me, there is a lot to see and do here.  My sister-in-law is coming in town in a few weeks and there are at least two places I'm taking her see.  

Here's a short video (about 4 minutes) of my "destination training" tour of Beaumont.

If you are coming to town to visit or planning to relocate, you will want to stop at the Ben Rogers Visitor Center near Ford Park.  They have every brochure you can imagine and coupons too.  Who doesn't like coupons?  If you are relocating to Beaumont and need to look at homes then you'll want to touch base with me.  The Beaumont Visitor and Convention Center specializes in helping people who are here to visit.  I specialize in helping people who are hear to stay.  Enjoy the tour!

Stop Your Home Search! Just Listed. You'll Want To See This Home.

Every now and then you list a really great home.  The sellers have great taste and their home is in pristine condition.  These are the listings we dream about.  Well, dreams come true.  Here's a new listing in the west-end of Beaumont.  Its better than new.  Marino built with upgrades, warm neutral colors, a side entry garage and so much more.  I don't expect this one to be on the market long.  Watch the video and then call me for your own personal tour. 

Call 409-504-9097.  Trust me homes like this are few and far between.  Don't regret that you didn't call when the sold sign goes up.  Its just listed and you'll want to see this home.

Southeast Texas Residential Home Sales: What Happened In June?

If you happened to notice there were no new blog posts last week, that's because I was on vacation.  We went to the Rocky Mountains.  It was wonderful to be some place cool for a week in the middle of the Southeast Texas summer.  This heat wave and dry spell have been a killer this year.  Let's hope for rain.

June home sales data has been reported by both the mid-county and Beaumont MLS systems.  Here's what happened in June.

 

Now if the average sales price in Mid-county strikes you as a little high, it strikes me that way too.  I haven't had time to dig into the data yet but it looks like one very expensive property sold which pulled up the average. 

Months supply of homes on the market has remained unchanged much of the year.  We continue to have about 7-8 months supply.  The average sale price is higher again which leads one to think the country's recession hasn't hit Southeast Texas home prices yet. Average days on the market is also fairly constant so far this year.  Our sales have decreased slightly from last year and more than slightly from 2007. 

Its good to be back from vacation and I'm ready to share more residential home sales information with you.  If you want to find out more about a certain neighborhood just call, email, or text me.  If I don't know the answer to your question, I'll research the answer for you.  Happy house hunting!

Southeast Texas Home Sales 2008 vs 2009

Is the Southeast Texas real estate market up or is it down?  That's a question I hear almost everyday.  Buyers want to know if they can get a great deal.  Sellers want to know if their homes are still going up in value. 

Since we are half way through 2009 its a good time to compare the first half of 2009 to the first half of 2008.  The results may surprise you.  I like graphs and charts to display statistical information.  Like they say a picture is worth a thousand words.

1000 words about the number of homes that have sold:

The total number of homes that sold in the first six months of 2008 was 1089.   The total number that has sold in the first six months of 2009 is 1050. *This number is not official yet.  The Beaumont MLS has not reported the official number of sales for the month of June.  When they do they will be recorded for your viewing pleasure at the  Real Estate Center at Texas A&M website.  Looking at the number of sales our market really hasn't had any measurable change since last year.  But before we say there hasn't been any change, here's a thousand words about median sales price.

  

Now there's a change!  The median price in 2009 has been significantly higher than the median sales price in 2008.  June 2009 data has not been released yet.  However, from the research I've done it appears as though the median price in June is down.  We have been seeing this in the activity levels of the more modestly priced homes far outpacing the sales of the upper price range homes.  For most of 2009 the median sales price has been approximately $135,000.  Compare that to 2008 when the median price was about $125,000. 

Here's another change in our local real estate market, although this trend is happening across the country.  FHA financing is now as common at conventional financing.  Of the homes that closed in the first six months of the year there were 383 conventional loans, 333 FHA loans, 39 VA loans, and 269 cash sales. 

So to answer the question is the Southeast Texas real estate market going up or down?  I'd have to say prices, at least the median price, is up.  Sales are about the same.  We really don't have any signs of a down turn in the local real estate market.  Average days on market and inventory levels have gone up a bit this year which could signal a flattening out of the price increases but its really to soon to say. 

Is it a good time to buy?  Yes.  Is it a good time to sell in Southeast Texas? Yes.  Everybody is a winner in this market.

Breaking Mortgage Update: Get Your $8,000 Tax Credit At Closing

Just in this morning.  Southeast Texas has a lender than is offering monitaziation of the $8,000 first-time buyer tax credit.  Haven't heard about the credit yet?  You must have been under a rock but here's a website with all the information on Federal Housing Tax Credit for first-time home buyers.

The Mortgage Group is our local lender who is offering the program.  Here's the announcement:  

We are very excited to announce we are now able to offer the Texas Department of Housing and Community Affairs MONITAZIATION of the $8,000 Tax Credit so the funds can be used at closing.  The borrowers are allowed to get 5% of the first lien amount up to a max of $7,000 to go for down payment or closing costs.  Here are a few bullet points to help you understand the program:
 
Each buyer must complete a pre-purchase homebuyer education course.
Homebuyers must be eligible to claim the Federal Tax Credit.
Homebuyer must complete the IRS Form 5405 and file an amended 2008 IRS Federal Tax Return.
This is a 90 day 0% loan with a $250 admin fee.
Homebuyers cannot have owned a home in the last 3 years.
Must meet income limits.
If funds are not paid back within 90 days, the funds are repaid over 24 months at 10% interest with monthly payments of $323 per month. 
 
 
 
 
Scott Gittinger
Senior Loan Officer
Texas License Number 49555
 
 
Michael Caballero
Marketing Director
 
Mortgage Group
990 IH 10 North, Ste 135
Beaumont, TX 77702
(409) 899-1800   Office
(409) 899-1808   Fax
(409) 351-2528   Cell

If you need more information about this program call today.  Its an incredible opportunity but you have to qualify and you have to close on a home before November 30, 2009.  Its taking about sixty days for most residential purchase contracts to close these days so you want to be finding a home soon.  If you wait until October or November to start looking you may be too late.  Sometimes offers like this sound to good to be true but this one is true.  First-time home buyers are able to get an $8,000 tax credit for buying a home.