January 14, 2015

Million dollar-plus homes in the Houston area were hot commodities in 2014, with some 1,194 million dollar-plus luxury residences sold from January throughout October — the most in the entire state.

In fact, Houston’s high-end housing market reflects a 13 percent increase, the Lone Star’s third highest jump over the same time frame in 2013.

Those stats come from the Real Estate Center at Texas A&M University in its new 2015 Texas Luxury Home Sales Report.

“Those people sell their home in California, move to Texas and realize their money goes much further in our market.”

Jim Gaines, an economist at the Real Estate Center at Texas A&M University, says that the luxury housing market proved to be one of the top segments of housing because Texas is a hot destination for new residents, particularly from California.

“We saw a lot of people moving to Texas from places like California, where a modest two-bedroom condo can be valued upwards of $1 million,” Gaines says in a statement. “Those people sell their home in California, move to Texas and realize their money goes much further in our market.

“Thus, even if they don’t have an income typical of a luxury homeowner, they have assets to purchase luxury homes and are stimulating that market.”

Dallas-Fort Worth saw the second largest increase in sales volume in the state compared to 2013 for homes priced $1 million and more. From January to October of last year, North Texans purchased 926 luxury homes, which was a 15 percent increase over 2013, when sales were relatively placid.

In comparison, San Antonio won the percentage increase game at 26, but that represents only 107 luxury homes and 0.4 percent of the overall market. Austin’s growth was in the single digits: 9 percent. Its million dollar homes had the highest share of the overall market at 2 percent, however.

January 5, 2015

You’ll learn a lot about home inspections as a first-time homebuyer. Here are a few Inspection 101 questions that your Texas REALTOR® can answer when it’s time to look under the metaphorical hood of your first house.

Who pays for it?
As the buyer, you choose the inspector, pay him directly for the inspection, and the inspection report he generates is yours. If you don’t already have a home inspector in mind, ask your friends and family members for a referral, or your Texas REALTOR® may be able to recommend someone. Whoever you chose must be licensed by the Texas Real Estate Commission.

What does an inspector do?
An inspector will conduct an “objective visual examination of the physical structure and systems of a house, from the roof to the foundation,” according to the American Society of Home Inspectors. The inspector will go through the entire house and make note of any damage, need for repairs, or maintenance issues, and then give you a copy of the completed report based on his findings. It’s important to know that there could be defects a home inspector will not find and wouldn’t be expected to find if the defects are in areas with limited or no access.

When should I get an inspection?
Your Texas REALTOR® will discuss including a termination-option period in your contract to purchase the home. This is an amount of time during which you can conduct inspections, negotiate with the seller for repairs, and still have the option to terminate the contract.

Where should I be during the inspection?
You don’t have to be at the property during the inspection, but it’s in your best interest to be there. Your inspector may not mind if you accompany him and ask questions as he checks everything out, but be sure to ask first.

Why should I have this done?
Buying a home is probably the largest investment you will ever make, so you want to know as much as you can up front. A home inspector will point out items that need regular maintenance and identify any problems.

After your inspection is complete, talk with your Texas REALTOR® to determine if there are any issues you want to ask the seller to address before you move forward. A Texas REALTOR® has experience with the home-buying process and will make recommendations that are right for you.

12/30/2014

A new family moved in next to us, and my wife and I stopped by to welcome them. They asked us when trash pickup is (Friday), if the city will fix the broken streetlight next to their driveway (yes), and if the guy who “walks” an imaginary dog through the neighborhood is dangerous (no).

Then they asked a strange question: They wanted to know how much we paid to file our homestead exemption.

A scam that’s been around for years
They received a letter in the mail containing lots of data about their property from a company offering to file their homestead-exemption paperwork—for the low, low price of $35. Being first-time homebuyers, they didn’t know that there is no fee for filing your homestead exemption in Texas. You download the form from the state and file it with your local appraisal district; it doesn’t cost anything.

But wait … there are more
I’d heard about that homestead-exemption scam; we received a similar letter when we bought our house. Lucky for us, our Texas REALTOR® had explained how to file the exemption. She also said to call her if we received any other official-looking letters asking for fees for anything related to the sale of our house. That came in handy when we got an invoice a few days after closing from a deed-retrieval service, charging us $87 for a copy of our deed. She told us to throw away the so-called invoice—we would be getting a copy from the title company.

As far as real estate scams go, these may be small potatoes, but when you’re buying a house, every dollar helps.

December 19, 2014

The second wealthiest ZIP code in the nation isn’t in River Oaks or one of the Memorial area villages.

Instead, a small area of downtown Houston lays claim to that lofty status, according to a recent study by a real estate blog.

The next time Hollywood is looking for an upscale location for a series, instead of 90210, perhaps they should look to 77010.

Movoto‘s report shows that residents living in 77010 made an average per capita income of $212,325, based on information pulled from the Census’American Community Survey for 2008 to 2012. That ZIP code area includes Discovery Green and theGeorge R. Brown Convention Center, with boundaries of Highway 59 to the south, Polk Street to the west, Fannin Street to the north and Rusk Street to the east.

We’re guessing that the 77010 ZIP scored so high on the tony list because a) not many people live there, and b) those who do live in pricey highrises. The two main residential towers in the area are One Park Place, a rental tower overlooking Discovery Green, and Four Seasons Place, attached to the Four Seasons Hotel, which offers condos for sale with hotel-quality amenities.

The Four Seasons Hotel Houston, located at 1300 Lamar S., converted 64 units in the mid-1980s for short- and long-term leasing or even purchase. CultureMap featured unit 3707 in the tower with private entrance at 1111 Caroline St. it the ongoing On the Market series. Designed by renowned architect William F. Stern, the 4,776-square-foot penthouse on the 30th floor was originally listed at $4.6 million and is still on the market at a reduced price of $3,850,000.

One Park Place, located at 1400 McKinney St. and developed by The Finger Companies, boasts 24-hour, five-star concierge services and a one acre resort-style pool. Occupants also enjoy a private entrance to Phoenicia Specialty Foods and MKT Bar Cafe.

So the next time Hollywood is looking for an upscale location for a series, instead of 90210, perhaps they should look to 77010.

Movoto’s ranking of 32,420 ZIP codes reveals the other richest ZIP codes in its top 10 list. These incredibly well-off areas are:

1. 21056, Gibson Island, Md.
2. 77010, Houston
3. 04642, Harborside, Maine
4. 94528, Diablo, Calif.
5. 99510, Anchorage
6. 08248, Strathmere, N.J.
7. 10007, New York
8. 19316, Brandamore, Penn.
9. 02110, Boston
10. 49717, Tuscarora Township, Mich.

The only other Texas city to make it to the top 50 wealthiest ZIP codes is Farnsworth up in the Panhandle, coming it at 31 with an average per capita income of $118,870.

December 15, 2014

Houston home sales surged in November toward a record-setting year, but the Houston Association of Realtors warns that falling oil prices will bring a slowdown in 2015.

The Houston Association of Realtors is predicting that home sales activity will drop 10 to 12 percent over the next year.

It’s all about jobs. Falling oil prices could reduce job creation in Houston next year to only 65,000 new jobs — nearly a mere half of the 120,000 new jobs Houston gained in 2014. Slower job creation in 2015 will mean slower home sales next year also, the Realtors association said.

While consumers may enjoy paying less for gas at the pump, lower oil prices mean a slower economy in Houston, which is known as the Energy Capital of the World.

It appears the bull run in Houston housing is about over. Nobody can predict oil prices.

West Texas Intermediate, the benchmark for American crude, took a huge tumble again Tuesday falling below $61 a barrel, the lowest level since 2009. This summer, WTI oil was trading at more than $100 per barrel.

Even though the inventory of homes for sale is exceptionally tight in Houston and November sales were strong, the Realtors group said the Houston housing surge would be tapering off.

HAR Chair Chaille Ralph with Heritage Texas Properties said: “I have been asked whether falling oil prices could impact housing in 2015, and Stewart Title Chief Economist and former HAR Chairman Ted C. Jones, Ph.D., has forecast a 10 to 12 percent decline in home sales in the next 12 months, with about a 6.0 percent increase in prices.”

Houston is having its strongest year ever for home sales in 2014. So even if sales slowdown more than 10 percent in 2015, the local housing market will still be fairly good.

HAR reported single-family home sales totaled 5,092 units in November, an increase of 1.8 percent compared to November 2013.

In November, the inventory of homes for sale was exceptionally small. Months of inventory, the estimated time it would take to deplete the current active housing inventory based on the previous 12 months of sales, dipped to a 2.7-months supply versus a 2.9-months supply in November 2013.

With the inventory tight, home prices increased sharply. The average price of a single-family home jumped 10.3 percent from last November to $271,232.

On a positive note, the low-end of the housing market will be getting a boost from relaxed lending standards. In recent years, the National Association of Realtors had voiced concerns that overly tight lending guidelines were preventing young people from being able to buy a home.

But new rules just established by the government-chartered Fannie Mae and Freddie Mac will allow some buyers to get a mortgage with only 3 percent down payment. The first wave of those new rules will go into effect this weekend, said Houston mortgage lender Gail Evans of On Q Financial.

The lenders have a lot of stipulations and require homebuyers to have a minimum FICO credit score of 620.

The lower down-payment programs, could also help the home building industry, which has been highly focused on upscale homes with few low-priced offerings for first-time buyers.

December 11, 2014

What was an earlier announcement buried in a company’s second-quarter earnings report is quickly becoming a five-story apartment complex joining the building frenzy in The Galleria area.

Post Galleria is now under construction on the site of a now-demolished hotel along Loop 610 north of Richmond Avenue, the Chronicle reports. Renderings first surfaced recently on the Houston Architecture.com forum showing plans for the building — with those taken from the developer’s website.

Developed by Atlanta-based Post Properties, Post Galleria is to include 395 units in the wood-framed building with a contemporary bridgeway an architectural focus at the main entrance, according to the company’s website. The bridgeway opens into an additional communal courtyard with landscaping featuring a water fountain. A fitness facility and clubroom that provide close to 10,000 square feet of leisure space for residents are among the amenity highlights, in addition to a large private courtyard and swimming pool.

Post Galleria will sit on almost four acres in this highly sought-after area.

December 10, 2014

According to an end-of-the-year report from the Texas Association of Realtors, the state’s economic and population growth yielded significant gains in all areas of real estate over the last year. The 2014 Texas Annual Housing Report shows these boosts were powered by international homebuyers, as well as increases in luxury home sales and condo and town home sales.

For starters, Texas gains more out-of-state residents than any other place in the country, and it’s near the front of the pack for international buyers, particularly from Mexico. More than 584,000 people moved to Texas from other states in 2013, for a net gain of 138,057 people, while international homebuyers are at a five-year high, contributing more than $11 billion to the economy in a 12-month period.

In Austin and Houston in particular, the luxury housing market grew twice as fast as the housing market at large.
“It’s a great time to live in Texas. The high demand for Texas real estate is not being fueled by speculation and investment activity – it’s driven by the thousands of people who move to the Lone Star State daily,” Dan Hatfield, chairman of the Texas Association of Realtors, said in a release.

“People are moving to Texas from across America and around the world to take part in our state’s booming economy, business-friendly environment and quality of life.”

Luxury homes priced over $1 million were a significant portion of the market’s growth. January 2014’s Texas Luxury Home Sales Report showed an average 35 percent year-over-year increase for luxury home sales in Texas’ four major metros: Dallas, Houston, Austin and San Antonio. In Austin and Houston in particular, the luxury housing market grew twice as fast as the housing market at large.

A lack of inventory — below the Real Estate Center at Texas A&M University’s balanced housing market level — drove up prices 5 to 10 percent, depending on the market, but housing development increased quarter-to-quarter in the second and third quarters of 2014. That’s the first time it’s done so in three years, and home sales should continue to grow in 2015 thanks to growth in stock.

With those high prices, however, condo and town house sales were the fastest-growing sector in 2014, growing 10.5 percent in the first five months of 2014 compared to the same time period in 2013. They also spent 14 fewer days on the market compared to 2013 in the four major cities.

Even with the sub-optimal inventory, 2014 is on pace to outperform 2013 as the second-best year in home sales for the state.

December 9, 2014

Zillow Inc. predicts Houston’s hot housing market will cool down next year.
The Seattle-based real estate company (Nasdaq: Z) forecasts Houston’s home values will increase 2.1 percent next year. Historically, Bayou City home prices have climbed about 9 percent annually since 2012.
“It’s a huge drop over the past year,” said Skylar Olsen, a senior economist with Zillow. “And that’s a very conservative projection.”
Zillow predicts such a sharp decline in home value appreciation after two years of gangbuster growth primarily because the supply of new homes is finally starting to catch up with demand, Olsen said.
During the Great Recession, homebuilding activity fell dramatically across the country, including Houston. The number of building permits in the Bayou City dropped from a high of 55,159 in 2006 to a low of 22,328 in 2010, according to the Real Estate Center at Texas A&M University.
However, Houston’s job growth, particularly in the energy sector, has kept demand high for new homes. For the thousands of new residents relocating to Houston for new jobs, homes were nowhere to be found. The housing shortage, coupled with the growing demand, caused prices to skyrocket, Olsen said.
At the same time, Houston’s fast recovery has fueled homebuilding frenzy as builders rush to fill the city’s pent-up demand.
Building permits are returning to pre-recession levels, with 34,543 permits issued in Houston last year. Local developers and homebuilders submitted a record $696 million worth of construction permits in August, a 64.6 percent increase year over year, according to the Greater Houston Partnership.
“Inventory is coming up, so demand is softening,” Olsen said. “(Home) prices have really slowed down quarter over quarter, and it has a lot to do with the new supply.”
Ultimately, the slowdown is good for the housing market, Olsen said.
Houston’s home prices have been growing at an “unsustainable pace,” causing fears of a housing bubble. In September, San Francisco-based Trulia Inc. (NYSE: TRLA) placed Houston on a watch list for a possible housing bubble.
“Home values can’t outpace income, or else you’re heading into bubble territory,” Olsen said. “We expect home value appreciation to slow down to a sustainable pace. That’s certainly the hope.”
As inventory comes up, homes will stay on the market longer, Olsen said. There will be “less of a feeding frenzy” and more options for homebuyers, she added.
For Realtors, a slower market means they should expect more modest gains in commissions next year. However, the increased home inventory means they should be able to do more business, Olsen said.
“Houston is still one of the hotter markets out there,” she said.