Houston Housing Market Heats Up, But Still Not Near Pre-Recession Levels
by: Shomial Ahmad, August 27, 2012 4:08:00 pm
Summer's a typically good time for housing sales. But compared to last year, average home prices are up and total dollar volume of sales are way up. Stacy London with Houston Capital says when she's talking to competitors in other states, she has a little nickname for Houston.
"Actually we refer to it here in our office as the happy bubble."
And that bubble, London says, doesn't burst once you go beyond the outer loop. It's in Conroe, Katy and Pearland. More people are moving to Houston, she says, and many people are looking to get their first mortgage.
"When a first-time home buyer compares what they're paying in rent to what they could pay in a monthly home payment — and have the tax deduction of ownership — the economics are very straightforward and simple. Especially when you combine that with interest rates in the 3s."
London says she's had clients pre-approved, just sitting around because they can't find a house to buy. Realtor Tim Surratt says it's pretty common to have multiple bids on houses.
"Just in the last two weeks, I've had two houses that came on the market. Both of them sold the day that they came on the market with multiple offers on them, and then what's called a back-up offer."
The market may be good for those houses, which were in Tanglewood and Highland Village. But it's not so easy for older homes in certain areas, like Sharpstown and Westwood. That's at least the reality for some Realtors. Jay Raman with Ashoka Lion is still dealing with clients who've walked away from their homes. Others have significantly lowered their initial asking price. For example, take this duplex with three-bedroom two-bath units on Fondren and 59.
"The owner couldn't get people to put offers for $140,000 for a duplex. You know, that was two different units, and we ultimately sold it for $105,000, actually the sale price was around $99,000."
Raman tells clients that it's good that the market is improving. But if you're looking to make a good return on an investment, he says, now's not the time. Evert Crawford is with the Institute for Regional Forecasting with the University of Houston. Crawford expects the recovery to keep on gradually improving. That improvement doesn't mean that prices will shoot up.
"When these properties do come back on the market through foreclosure, lenders usually offer them at a really good price. And that suppresses prices for quite a while. "
The percentage of foreclosure property sales is significantly down from the beginning of this year. But still latest figures from the Houston Association of Realtors show more than 16 percent of property sales come from foreclosures.