Click here to view the embedded video.

HOUSTON — (June 21, 2011) — The 2010 home buyer tax credit continues to obscure an accurate gauge of how the Houston real estate market is performing. The 2010 federal incentive triggered a short-term surge in local home sales last spring that has skewed the year-over-year analysis most of this year.

When compared to the tax credit incentivized closed sales of May 2010, there were fewer home sales recorded in May 2011, according to the Multiple Listing Service (MLS) report prepared by the Houston Association of REALTORS® (HAR). At the same time, the number of listings that went under contract this May and expected to close in the next 30 to 60 days was up more than 35 percent when compared to May 2010—yet another comparison that is skewed by the tax credit that required buyers to enter purchase contracts by the April 30, 2010 deadline.

“Getting an accurate read on the Houston real estate market remains challenging because the 2010 tax credit prompted a surge in home sales during the first half of last year that otherwise would have occurred throughout the summer,” said Carlos P. Bujosa, HAR chairman and VP at Transwestern.

The average price of a single-family home jumped 6.5 percent from May 2010 to $220,210. The May single-family home median price—the figure at which half of the homes sold for more and half sold for less—climbed 3.2 percent year-over-year to $157,900. Both the average and median price reached the highest levels for a May in Houston as well as for 2011.

Volume continued to soar among rental properties, confirming reports that while many new residents may be moving to the greater Houston area, they are as yet unable or unwilling to buy a home possibly due to more stringent mortgage lending requirements, an inability to sell the homes they’ve left behind, or a combination of these or other factors.

According to the latest HAR report, May single-family home sales fell 11.9 percent versus one year earlier. However, the 5,043 single-family homes that did sell represent the highest monthly volume recorded since June 2010, just after the tax credit expired. The under-$80,000 and above-$500,000 segments of the market experienced increased sales last month.

Foreclosure property sales reported in the MLS decreased 3.0 percent in May compared to one year earlier. Foreclosures comprised 19.8 percent of all property sales, down from 22.0 percent in April and 23.5 percent in March. The median price of May foreclosures fell 11.2 percent to $79,000 on a year-over-year basis.

May sales of all property types in Houston totaled 5,948, down 11.2 percent compared to May 2010. Total dollar volume for properties sold during the month declined 6.7 percent to $1.2 billion versus $1.3 billion one year earlier.

The Houston real estate market staged an encore of its post-tax credit performance in October with a decline in sales volume but continued stability in pricing. Despite the fourth month of down sales, the market enjoyed another boost in the average price and a nudge in the median price of single-family homes.

According to the latest monthly data compiled by the Houston Association of REALTORS® (HAR), October sales of single-family homes throughout the Houston market fell 23.3 percent compared to October 2009. However, on a year-to-date basis, single-family home sales are off 4.0 percent from 2009 levels. Declines were recorded in all but the lowest pricing segment.

The average price of a single-family home rose 5.6 percent from October 2009 to $208,459 while the October single-family home median price—the figure at which half of the homes sold for more and half sold for less—edged up 0.7 percent from one year earlier to $150,000. Both average and median pricing achieved the highest levels for an October in Houston.

Foreclosure property sales reported in the Multiple Listing Service (MLS) declined 13.4 percent in October compared to one year earlier. Foreclosures comprised 21.9 percent of all property sales in October—unchanged from the month before and generally consistent with the levels they have maintained for much of the year. The median price of October foreclosures dropped 8.5 percent to $80,550 on a year-over-year basis.

Sales of all property types in Houston for October totaled 4,404, down 23.8 percent compared to October 2009. Total dollar volume for properties sold during the month was $873 million versus $1.0 billion one year earlier, representing a 20.3 percent drop.

“For four months running, Houston has experienced declining home sales, but the silver lining has consistently been the appreciation in pricing,” said Margie Dorrance, HAR chair and principal at Keller Williams Realty Metropolitan. “We are encouraged to hear that more people are moving to Texas than any other state in the country—as many as 1,200 to 1,400 every month—and with Houston among the more popular urban destinations, local REALTORS® are hopeful that this will translate into improved sales going into the new year.”

Today, August 24, the National Association of Realtors issued the following  statement, “Existing home sales drop 27% in July; effects of expired homebuyer tax credit add turbulence to the market.”

Following the national trend, an anticipated property sales slowdown set into the Houston/Katy real estate market in July following the expiration of the federal homebuyer tax credit. The credit had propelled local home sales for four straight months beginning in March, however home sales suffered a double-digit decline in July. Despite the drop, the average price of a single-family home still managed to climb to a two-year high.

The southside of  I-10 had a 26% drop in sales for July compared to 2009 levels. The northside  of I-10 experienced a 42% drop in July closings.  As many first time homebuyers purchased on the northside, this is reflected in the slowing sales. Despite the downturn, average prices rose slightly on both sides of I-10.

According to the latest monthly data compiled by the Houston Association of REALTORS® (HAR), July sales of single-family homes throughout the Houston market fell 25.1 percent compared to July 2009. Sales volume faltered in all single-family home pricing segments except among properties under $80,000, which were flat. Sales of all property types combined slid 24.4 percent in July on a year-over-year basis.

The average price of a single-family home rose 2.7 percent from July 2009 to $224,764, the highest price since June 2008. The July single-family home median price—the figure at which half of the homes sold for more and half sold for less—dipped 0.7 percent from one year earlier to $160,880, but still recorded its highest level since July 2009.

Foreclosure property sales reported in the Multiple Listing Service (MLS) tumbled 13.5 percent in July compared to one year earlier. The median price of July foreclosure sales declined 6.1 percent to $84,000 on a year-over-year basis.

Sales of all property types in Houston for July totaled 5,056, down 24.4 percent compared to July 2009. Total dollar volume for properties sold during the month was $1.0 billion versus $1.4 billion one year earlier, representing a 23.9 percent drop.

“Homebuying came earlier and at a heftier pace than we would normally have seen in Houston during the spring and summer months because of the tax credit, but indicators showed that sales would decline once the credit expired, so this comes as no surprise,” said Margie Dorrance, HAR chair and principal at Keller Williams Realty Metropolitan. “It is encouraging that pricing has remained strong and that on a year-to-date basis home sales are actually slightly ahead of 2009 levels.”

Houston and surrounding areas month-end pending sales for July totaled 3,267, down 16.4 percent from last year, suggesting that sales will be down again in August. The months inventory of single-family homes for June extended to 7.7 months compared to 6.5 months one year earlier, but remains healthier than the national months inventory of single-family homes of 8.9 months, reported by the National Association of REALTORSâ (NAR).

Home ownership is an important and defining part of the Katy lifestyle. Now that the tax credits for first-time and repeat homebuyers have expired, many people are wondering if this is a good time to buy a Katy home. The answer is yes!

Even without the tax credits, there are many opportunitites in today’s Katy housing market including affordable prices and low mortgage rates. Market conditions may change and these opportunities may not be around for long, so homebuyers shouldn’t wait.

Plentiful Katy real estate inventory provides a great choice of homes in all prices, styles, locations and ages, including new construction. Many existing home owners who postponed trading up, downsizing or relocating due to market conditions are now ready to sell. Houses in Katy, both south and north of I-10, go on the market daily with many of these being more affordable than they were in the recent past. Foreclosures still exist, too.

Like Katy inventory and pricing, mortgage rates are at very favorable levels; some weeks mortgage rates still break records for their level lows. However, it is very important to know that mortgage ratges are extremely sensitive to market forces and can change very quickly. While nothing indicates that rates will soar in the near future, even a slight increase can push monthly payments up to the point where Katy homebuyers might miss out on their first choice for a new home. 

Lenders are scrutinizing borrowers more today than anytime in the past. To ensure that the process goes smoothly, buyers must be prequalified for a loan before they make an offer on a home; otherwise, it won’t be considered by the seller. For a refferal to a great Katy mortgage lender, one who can make it happen for you, contact me.

For a Realtor with 21 years experience selling Katy real estate, contact me via this blogsite or phone me at 713-818-2404. I work with both sellers and buyers to create a win/win atmosphere and a successful, profitable outcome.

According to Ron Hanlen of Network Funding, there is another factor currently driving Katy real estate inventory levels:  Mortgage interest rates. Despite dire predictions about the impending rise of mortgage interest rates, rates have held onto historic lows, in the 4’s.

Ron said, “Once the tax credit expired, everyone expected that listings would go down.  But they haven’t…they have gone up.  With all of the negative media attention on housing it would be easy to consider that it is because the sellers are distressed in some way. Maybe they lost their job or they are trying to sell the home before it goes into foreclosure.

But here is the real reason why listings are up:  Interest rates are at an all-time low. Despite the constant bombardment of negative media coverage, the vast majority of existing homeowners are very credit worthy, live within their means and have stable income.  Experienced homeowners have seen interest rates in the 5’s, 6’s, and 7’s in the last several years. With interest rates in the 4’s, savvy homeowners know that when interest rates are at an all time low, it’s time to make a move.”

Even if a seller gets a little less for their house than they might in the next few years, this loss is easily made up on the buying end of the transaction.

Ron continued, “Mortgage rates can make a right turn at any second.  Mortgage rates are not low because of anything that the Federal Reserve, Treasury, or Obama administration is currently doing. Mortgage rates are low because of global fear about the economy and financial system.  This causes banks and investors to hoard their cash and park it into nice, safe and boring mortgage backed securities.  You earn a very low interest rate in return for safety.  But the financial markets and the global economy will turn around, and when it does it will move mortgage rates up with it.”

Ready to buy or sell a home in Katy? To discuss selling your house or to tour Katy homes, contact me. To search all the houses currently on the market in Katy/Houston see Home Search. I have sold Katy real estate for over 20 years and would be pleased to work together.

I’ve had the busiest spring of my 21-year real estate career!s As the April 30th deadline to qualify  for the tax credits, $8,000 for first-time home buyers and $6,500 for existing home owners, loomed, home sales got really crazy.

It was not unusual for brand new listings to have multiple offers. Bidding wars ensued. Here in Katy, particularly on the southside of I-10, it was impossible to believe that a real estate recession exists.

Nationwide, the tax credit bills created a strong upswing in home sales. To read the rest of this story, see OnlyKaty.com.

The Federal Housing Administration, FHA, has kept mortgage rates and Mortgage Insurance Premiums, MIP, lower than the market dictated for some time to encourage home buyers to shore up the economy.

MIP premiums are about to increase; the date is April 5th. On case numbers dated after April 4th, MIP premiums go from 1.75% of the total loan value to 2.25%. It’s not as dreadful as it sounds. On a $200,000 mortgage, the increase, based on today’s interest rates, is approximately $6 per month–stay out of…to read the rest of my article, see OnlyKaty.com.

Normally, I don’t write articles explaining why rates are fluctuating. If you are like me, you just want to know what the rate is today. However, a recent change will  raise rates and we will also probably see them continue to increase in the future.

Read my entire article at OnlyKaty.com.

Want an extra $8,000? If you’re a first-time homebuyer, you’re in for a nice gift.

Last fall, the Federal Government introduced a financial incentive to prospective first-time homebuyers, an income tax credit of up to $7,500. The rules were simple: You must have been a first-time homebuyer, (as defined by not owning a home in the previous three years), and you met certain income restrictions.

The new $8,000 tax credit is available to those who buy between January 1, 2009 and December 1, 2009. It’s not a deduction, it’s an actual credit. Unlike the $7,500 first-time homebuyer tax credit introduced last summer, this does not need to be repaid.

First-timers who qualify can make no more than $75,000 in adjusted gross income if they’re single or $150,000 if filing jointly. The maximum tax credit is $8,000 or 10 percent of the sales price of the home, whichever is less. After purchase, three years residence in the property is required. As always, check with your accountant for details and be sure to submit IRS form 5405 when you file your taxes.

For information about Katy area homes, you can search the entire Houston MLS from this blog. For questions or to tour any area homes, contact me directly at 713-818-2404.I have specialized in Katy real estate for over 20 years. Experience does count!

]]> http://fuellingkaty.com/2009/03/15/1407/feed/ 0 http://fuellingkaty.com/2009/02/16/how-the-stimulus-bill-will-affect-katy-residential-real-estate/ http://fuellingkaty.com/2009/02/16/how-the-stimulus-bill-will-affect-katy-residential-real-estate/#comments Mon, 16 Feb 2009 19:12:15 +0000 Julie Q. Fuelling http://fuellingkaty.com/?p=1127

Please excuse the wordiness of the following post but this is the very best explanation I’ve read of how the new Stimulus Bill will affect the residential housing market, including here in Katy. It is a letter, published in full,  sent to my profession from the President of the National Association of Realtors:

Dear Fellow REALTOR®,

Here’s our take on the Stimulus Bill and Treasury announcements made this week. We look at the Stimulus package AND the Treasury’s package holistically, in compliment with each other – mostly because that’s how the Obama team is looking at it. Your representatives, the NAR Board of Directors, asked us in November to do 4 things (with an unspoken but clearly understood mandate to PRESERVE what we already have). Here they are: 1) get loan limits raised for high cost areas, 2) make the $7,500 tax credit NOT a loan, 3) try to find ways to push interest rates down (which are higher than they should be due to systemic risk right now) by 200 basis points, and 4) help provide solutions to the foreclosure/short sale problem.

So here’s what we have achieved: 1) the loan limits will be raised to $727,000 in high cost areas, 2) the tax credit will be raised to $8,000 with NO payback [a true credit], 3) interest rates have come down 125-150 basis points, and 4) the bill has over $50 billion in it for foreclosure mitigation, with Geitners Treasury plan signaling that the second half of TARP and TALF will be used to mitigate foreclosures through a government guarantee, drive down interest rates by buying another $200-300 billion of mortgage paper from the GSES’s thereby freeing them up to do the same with new mortgages, and Fannie has just agreed to lift the cap of 4 investment properties eligible for loans and raise it to 10.

In addition, we preserved what we have – which some tend to forget is always on the table when these negotiations start up again – mortgage interest deductability, real estate tax deductability, and the $250,000/$500,000 cap gains exclusion (an overall package worth more than $100 billion and for some a very attractive funding source for their pet projects).

We did make a run at the $15,000 credit — and we would have loved to have gotten that or the Homebuilders $22,000 credit idea as well as their 5 year loss carryback deal, but they were considered too rich for this program. What it did do though is totally take the debate off of whether a tax credit should be reinstated at all (it expired last year) and whether it was a true credit or a repayable loan, and kept the conversation on how much it should be. It also kept the debate off of ‘what we are willing to give up to get a $15,000 tax credit’ and kept the debate again, on how much it should be. It’s pretty hard to complain when they give you what you ask for and you lose something you never had.

While we study the Treasury specifics on their major role in providing the rest of the housing solution–there is much more to come and we are working diligently with the Administration to help ‘unclog the pipeline” and get capital flowing into housing again.

Sincerely,

Charles McMillan, CIPS, GRI
2009 NAR President

For information about Katy area homes, you can search the entire Houston MLS from this blog. For questions or to tour any area homes, contact me directly at 713-818-2404. I have specialized in Katy real estate for over 20 years. Experience does count!