SE Texas Real Estate Talk

Has the Southeast Texas Residential Housing Market Hit Bottom?

Here's an interesting little snippet from the CEO of Freddie Mac. 

Daily Real Estate News  |  January 27, 2010  |   Share

Freddie Mac CEO: Housing Is Near Bottom
The inventory of foreclosed houses still hampers the recovery of the housing sector, but overall, the U.S. housing market appears to be at or near bottom, Freddie Mac CEO Charles Haldeman told the Detroit Economic Club on Tuesday.

He predicted that the 30-year fixed mortgage rate would remain between 5 percent and 6 percent through 2010.

"The big downside risk to all this is a large wave of homes now in foreclosure potentially hitting the market at prices that are destructive," Haldeman said.

Source: Reuters News, Soyoung Kim (01/26/2010)

In Southeast Texas our foreclosure rates have remained relatively stable and don't comprise a big part of the residential housing market.  If foreclosures are the thing hampering the recovery across the nation, Southeast Texas should recover faster than the markets with higher foreclosure rates.  In a few more days we'll see how many homes sold in Jan. 2010.  What's your bet?  Have we hit bottom?  Let me know what you think. 

Southeast Texas Housing Outlook for 2010

Thursday, Dr. James P. Gaines, was in Beaumont talking about the residential housing market and what's in store for 2010.  If you have never heard of him, then a brief introduction is in order.  Dr. Gaines is a Research Economist with the Real Estate Center at Texas A&M. 

"If you are a buyer or seller of real estate in Texas when Dr. Gaines talks you should listen."

The Beaumont Board of Realtors was fortunate enough to have him present his "Economic and Housing Outlook" for 2010 at the first quarter luncheon.  Now, if you already know if homes values are going up or down this year then there is no need to read any further. 

To give credit where it is deserved the following charts and graphs are from a power point presentation Dr. Gaines presented on Jan. 14, 2010.

First and foremost take a look at home sales in Texas:

The numbers are small but the trend is clear.  Home sales rose from 1990 to 2006.  Since the peak in 2006 they have fallen back to the levels seen in 2001-2003.

Second, here's the same trend shown in Southeast Texas:

 
Southeast Texas home sales peaked in 2007.  They have fallen back to about the 2002-2003 levels. 

Third, this chart shows what was going on with median prices and inventory in 2008 and 2009.

There was a decline in sales.  Roughly, 9.5%.  There was a decline in the average and median price across the state.  The months supply of inventory remained the same.

Last but not least, take a look at the single family homes sales data for Southeast Texas.

 
Year to date sales fell about 5% for the year in Beaumont.  The average price went down a smidgen.  Our median price actually went up.  One red flag that you don't want to overlook is the months supply of inventory increased to 9 months.  Hint: A six month supply is considered balanced and healthy by the Real Estate economists.  A nine month supply would indicate a buyers market and in a buyers market the pressure on home prices is downward.   

One statement Dr. Gaines made that stuck in my mind went something very close to this; "There has never been a better time to buy residential real estate and there will probably never be this same unique opportunity to buy real estate again in our lifetime." 

What really happens in 2010 remains to be seen but the outlook seems to say if you plan to buy a home do it soon or you may have missed a golden opportunity in the residential housing market. 

Southeast Texas Homeowners Check This Out

The National Association of Realtors has just launched HouseLogic.  You can check it out during the Beta Test.  The big advertising push to consumers will be in February. 

The new website will help homeowners with home improvements, home maintainence projects, and provide consumers with information about taxes, incentives and home financing. 

Check it out!  Tell your friends you saw it first on setexasrealestatetalk.com. 

Let me know what you think.

 

The Worker, Homeownership, and Business Assistance Act Offers Help to Southeast Texas Home Buyers

You haven't missed the ship yet!

It is no secret the economy has seen better times.  It is no secret that the U.S. Government has been trying to help keep it afloat. 

For homeowners who want to move up and want-to-be homeowners trying to buy a first home consider this your life raft. 

Say "Hello" to the, The Worker, Homeownership and Business Assistance Act of 2009.  The law went into effect on November 6, 2009 and in a nut shell it extends the first-time homebuyer credit for five months and allows an eligible move-up buyer to sell their home, buy a new one and receive up to a $6,500 credit. 

Details can be found at The IRS.gov website.  Just want the cliff notes, then here you go:

• Purchase deadline extended to April 30, 2010
• Maximum credit for a first-time home buyer is $8,000
• "Long-time resident" buyers can receive up to $6,500.  To qualify a buyer must have owned and used the same home as a primary residence for at least five consecutive years of the eight-year period ending on the date of the purchase of a new home as a primary residence. 
• You have the option of claiming the credit on your 2009 or 2010 tax returns.

Its a great opportunity to move-in or move-up to a new home.  Once the economy is running smoothly again you can bet the homebuyer tax credits will be gone for good.  Don't get left behind. Jump on board this ship before it has sailed.

Southeast Texas Home Buyer Tax Credit Extension In Works

The first time home buyer tax credit which has been responsible for as many as 50% of the home sales that have occurred this year is set to expire on November 30th.  Right now the Senate is working on an extension.  There are a few changes in the proposed legislation. 

Fresh from the Daily Real Estate New headlines, here's the latest:

Daily Real Estate News  |  October 28, 2009  |   Share

Senate Dems on Board with Credit Extension
Senate Banking Committee Chairman Chris Dodd (D-Conn.) says Senate Democrats have agreed to extend the first-time home buyer tax credit. The latest version extends the program to home sales signed — not closed — by April 30. Purchasers would have another 60 days to close the sale. The credit will also be expanded to include so-called step-up buyers who have lived in their current home for at least five years.

The credit would be cut nearly 10 percent to a $7,290 cap. Income eligibility for first-time home buyers would stay the same, but it would rise for step-up buyers to $125,000 for individuals and $250,000 for couples.

Source: Bloomberg News, Dawn Kopecki and Ryan Donmoyer (10/27/2009)

The exciting part of the extension is the step-up provision.  We may start to see some better activity in the mid and upper price ranges once the ink is dry on the new legislation.

Economists Predict Housing Recovery in 2010

Rainy days and Mondays get a lot of us feeling down, so here's a story that may lift your spirits. 

From the Associated Press, Happy Tuesday.

Daily Real Estate News  |  October 13, 2009  |   Share

Economists Predict Housing Recovery
Economic forecasters predict that 2010 will be the first year since 2005 for housing to contribute to the growth of the U.S. economy, according to a survey released by the National Association for Business Economics.

Home prices are expected to rise 2 percent next year, but forecasters don’t believe the increase in prices will discourage homebuyers.

More than 80 percent of economists surveyed by the NABE think the recession is over and recovery has begun, but they expect the expansion to be slow because unemployment persists.

Source: Associated Press, Mae Anderson (10/12/2009)

Beaumont Number Two in Nation For New Building Permits

Need some good news on a rainy Monday afternoon?  Well, this story should do the trick.  Business Week just released a list of the top twenty markets across the nation where building permits are on the rise.  

Don't have time to read the whole story?  Here's the "cliff notes".

 10 Markets Where Building Is Booming
The building business—both commercial and residential—is a seeing a recovery in some markets, especially those where military, government, and energy jobs are driving demand.

Lake Charles, La., which leads the nation, is an anomaly—it’s recovering from hurricanes—but the other markets are largely driving by economic growth. For instance, building permits for apartments in Huntsville, Ala., near the expanding U.S. Space & Rocket Center, have jumped 400 percent so far in 2009.

Many of the contracts are going to smaller local builders, but some of the giants are getting back in the game as well. KB Home resumed construction in the Mid-Atlantic, including Washington D.C., after pulling back earlier this year.

The top 10 growth markets, based on building permits, are:
Lake Charles, La., 122.5 percent
Beaumont-Port Arthur, Texas, 65.8 percent
Salt Lake City, 36.6 percent
Huntsville, Ala., 30 percent
Jacksonville, N.C., 28.6 percent
Augusta-Richmond County, Ga.-S.C., 21.6 percent
Fayetteville, N.C., 12.2 percent
Las Cruces, N.M., 11.6 percent
Auburn-Opelika, Ala., 11.3 percent
Little Rock-North Little Rock, Ark., 7.7 percent

Source: BusinessWeek, Prashant Gopal (09/18/2009)

There now, doesn't that make this rainy Monday a little better.

Time Is Running Out on the $8,000 Tax Credit

First-time home buyers have just 12 weeks to find and close on a home to qualify for the $8,000 Federal Tax credit before the November 30th deadline. 

Don't miss out.  Here's what you need to do:

1. Start your search today.  You can search for all homes in the Beaumont MLS here on the blog.  Click the interactive map to begin searching.

2. Get pre-qualified.  Know how much you can afford to spend on a home before you spend precious time driving around looking at homes.  Need a good lender, call me.

3. Don't waste time.  Its taking most lenders about 45 days to process a loan application and get full approval.  That means if you haven't found a home by mid-October you might not be able to close by the November 30th deadline.

4. Do a little homework.  Read up on the Tax Credit . RISMedia posted an informative article yesterday that gives some helpful tips. 

5. Print a copy of IRS form 5405  to apply for the first-time buyer tax credit.

It's not that often you will find the government giving away $8,000.  If you are able to take advantage of this opportunity you will be buying a home when home affordability is at its highest level in 28 years.  You will be taking a huge step forward in building your future wealth.  As the old saying goes "Buy when prices are low, sell when prices are high."  Just don't let time run out.

Home Sales Up For Sixth Straight Month

Each day my Google Home Page is filled with the most current real estate news and headlines from around the county.  Today, this one caught my attention.  Its a huge indicator that the national housing recovery has positive momentum.  August marked the sixth straight month of sales increases.  Read what the National Association of Realtors reported below:

Daily Real Estate News  |  September 1, 2009  |   Share

Pending Home Sales on a Record Roll
Contract activity for pending home sales has risen for six straight months, a pattern not seen in the history of the index since it began in 2001, according to the National Association of Realtors®.

The Pending Home Sales Index, a forward-looking indicator based on contracts signed in July, increased 3.2 percent to 97.6 from a reading of 94.6 in June, and is 12.0 percent higher than July 2008 when it was 87.1. The index is at the highest level since June 2007, when it was 100.7.

Affordability at Record High
Lawrence Yun, NAR chief economist, said the housing market momentum has clearly turned for the better. “The recovery is broad-based across many parts of the country. Housing affordability has been at record highs this year with the added stimulus of a first-time buyer tax credit,” he said.

“Other buyers are taking advantage of low home values before prices turn higher. Nationally, the typical mortgage payment now takes less than 25 percent of a middle-income family’s monthly income to buy a median priced home, with payment percentages so far in 2009 being the lowest on record dating back to 1970. As long as home buyers stay within their budget, mortgage payments will be very manageable,” Yun said.

First-Time Buyers
NAR estimates that about 1.8 to 2.0 million first-time buyers will take advantage of the $8,000 tax credit this year, with approximately 350,000 additional sales that would not have taken place without the credit. Buyers have little time to act because they must complete the transaction by November 30 to qualify for the credit. Unless extended, contracts signed but not completed by that date will not be eligible – it is taking approximately two months to complete home sales in the current market.

By Region

• Northeast: The Pending Home Sales Index declined 3.0 percent to 78.8 in July but is 4.7 percent higher than July 2008.
• Midwest: The index slipped 2.0 percent to 88.1 but is 8.1 percent above a year ago.
• South: Pending home sales activity rose 3.1 percent to an index of 103.8 in July and is 12.0 percent above July 2008.
• West: The index jumped 12.1 percent to 112.5 and is 20.0 percent above a year ago

 

We'll find out in a few days what the final sales numbers for the Southeast Texas housing market were during August.  Check the blog later this week to see if Southeast Texas also saw a sales increase in August.

National Housing Market Signs of Bottom on Horizon

Home prices are still falling across the nation but not as fast.  Here's a video from MSNBC.  There are signs that the national housing market may be starting to find the bottom.  Its been a long 3 plus years since the problems first began.  Let's hope the experts are right and the bottom is here. 

Southeast Texas by and large was immune from the housing market debacle.  It comes as a surprise to our out of state buyers that the sellers here in Southeast Texas aren't just accepting any offer that comes along.  It requires a little re-education for most out of state buyers.  They've heard nothing but how bad the housing market is across the country.  Maybe where they moved from, but not the case here.  After all Beaumont was named the hottest housing market in the nation.

Here's what the experts have to say:

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