Kingwood / Humble Real Estate Blog

The Federal Housing Finance Agency (FHFA) annouced some changes in the Home Affordable Refinance Program (HARP).  The program was origianlly designed to help some homeowners that were underwater on their mortgages to refinance.  One of the problems was that many homes across the country are worth less than the existing loan balance.  The old rules stipulated that a home could be refianced for up to 125% of the current apprased value.  Now that limit has been removed, giving eligibility to more underwater homeowners.  So far it seems that the revised program only applies to Fannie Mae or Freddie Mac loans, therefore it is limited to certain homeowners.

There is another proposed bill that looks interesting.  Some of the US senators are proposing that visas be given to foreigners that purchase residential real estate in the U.S.  To qualify for a visa, one must purchase a home or homes with a value of not less than $500,000.  The minimum home cost would be $250,000 per home.  This could help increase the number of homes bought by overseas buyers, who are already spending billions on real estate in the U.S.

That seems like pretty good news to me.  The 30 year fixed rate is around 4% and actually dropped a little below 4% being the lowest ever in history.   The September jobs report came in this morning showing that the private sector created 103,000 new jobs.

Even though we lost some government jobs keeping the unemployment rate(national) at 9.1% and even though the stock market is all over the place, there is still some good news out there.

Here’s more.  According to a new survey of U.S. corporate executives, Texas boasts the best business climate in the country.  Nothing wrong with having a good business environment inviting new companies to come in and giving confidence to existing companies to expand and create more jobs.

According to an article by the Texas A&M Real Estate Center, Houston is one of the healthest employment markets in the country and may see a 3.9% increase in jobs this year.

There’s still some softness in prices in certain areas and in certain price ranges, but home sales are moving along.  We’re slightly ahead of last year overall in the total number of single family home sales in both Kingwood and the Humble markets.   The amount of current inventories run from a stable supply to a slightly oversupply.  Some parts of Kingwood has less than a 6 month supply, but the overall Humble market has more than an 8 month supply of existing homes to sell.  An 8 month supply would definitley be a buyer’s market.  It’s about 7.6 months of inventory for the entire Houston area.

In July the Houston market saw an increase of the average price for a single-family home to $224,110.  That’s the highest average for the month of July.

It’s an amazing time to be buying a home.  Prices are attractive and interest rates are very low.  The rate for a 30 year fixed rate mortgage is now around 4%.

I received an email today from American Home Shield (a home warranty company) and in the email they listed 3 tips for maintaining some of your home systems.  I thought I would pass these along because routine maintenance can help extend the life of appliances and components and in some cases, even reduce energy costs.  The 3 tips from AHS are as follows:

1. Air Conditioning Systems – To ensure efficient operation, check the air filter every month and clean or replace as needed.
2. Electrical Systems – Regularly use the self-test button on the ground fault circuit interrupters (GFCI) to ensure proper working order.
3. Washer/Dryer – Routinely check all hoses and venting to your washer and dryer—inspecting for leaks, cracks, holes and clogs. Replace hoses as needed.

These can also be good tips for being safe around your home, which brings to mind another tip.  You should test your smoke detectors to be sure they are working property.  I recently replaced the ones in my home with new detectors because the old ones did not seem to work that well when I tested them.  Some of the older homes only have detectors in the hall ways and not the bedrooms.  The new homes also have them in the bedrooms.

Texas is definitely on its way back. Nearly 73 percent of the jobs shed by employers during Texas’ shorter recession have already been recovered as the Texas economy recovers more quickly than the U.S. as a whole. Nationally only 13.4 percent of recession-hit jobs had been recovered ending 2010. Texas gained 251,100 jobs from March 2010 to March 2011.

Home prices in Texas have faired much better than the rest of the nation.   We have had price declines but not huge drops as in other states. We still have foreclosures, but we haven’t been hit as hard there either.  Texas has 1 foreclosure for every 1106 mortgages while California has 1 in every 240 and Nevada has 1 in every 97.   Building permits in Texas for single-family homes were down 14% in the 12 months ending March 2011, however there were still 59,006 permits issued for this 12 month period. Multi-family building permits were actually up 55% more than a year ago. The market is definitely anticipating an increase in renters vs. buyers

Locally the Houston area posted an annual employment growth rate of 2.1 percent for the March 2010 to March 2011 period. Dallas was slightly higher, but we were better than the overall U.S. growth rate. I believe the better business climate in Texas has really made the difference. Sources: Texas A&M RE Center and Texas Comptroller.

This won’t affect most of you, but it’s worth noting. Starting in the 4th quarter of 2011, homebuyers for upscale properties may find it hard to get financing. The reason is that the US Government may reduce the loan limits for mortgages on high-end properties. That’s right, the government, because close to 90% of all mortgage loans are backed up by entities of the federal government. I’m referring to the Department of HUD for FHA loans, Veterans Administration for VA loans and of course Fannie Mae and Freddie Mac for conventional loans. Prior to the world wide financial collapse and the massive foreclosures, there were more private investors providing the funds for home financing. That has now changed and the government agencies are taking up the slack.

The maximum loan limit for these government entities is $729,750, however that loan limit will expire on 9/30/11 and after that it may be reduced. There’s a hint that it could be reduced by 15%. We need to find a way to get the private sector back into the finance game, but it’s not easy. Lending terms would be more restrictive right now, and that would keep more buyers out of the market, and therefore, less homes selling. So we need the federal agencies, but it’s at the cost of the taxpayer. Fannie Mae, for example, will be borrowing another $8 billion or so from the taxpayers soon.

Homes sales (in the Kingwood/Humble area) so far in 2011 are fairly close to last year’s numbers. Overall, we’re a little behind, but probably not more than 10% We had an advantage last year of the Federal Tax Credit and that may have had some effect, but I don’t think the lack of the tax credit is really hurting this years sales. Some areas are almost dead even with last year.

The current buyers may be considering that interest rates are at their lowest for some time to come. I can’t predict the future, but rates just edged up a hair more and could be going higher. However, I don’t expect to see any big jumps in rates for the near future. If you are thinking about getting a home and you are on wondering whether to buy now or wait, then give me a call. There are some situations, where it might not be the right time to buy, but it’s worth talking about. If rates go up, it can really effect the amount of house that you are able to purchase. If lower rates allows you to get a 15 year mortgage instead of a 30, that’s a real advantage and an equity builder. There are definitely times that waiting can cost you money.

Same goes for you home sellers who want to trade up or trade down. If you wait for the price to go up on your current house, then it will probably go up on the house you want to buy.

On Sunday afternoon, April 10, 2011, more than 2000 members of the Second Baptist Church (whose north campus is in Kingwood) met at Discovery Green Park in Downtown Houston to celebrate the coming of Easter and to donate shoes to local charities and foreign ministries.  This celebration was called “Dance Your Shoes Off”, because that is just what happened.  The members performed a corregraphed dance to contemporary Christian music, and at the end of the dance, each member left a new pair of shoes on the field to be donated.  It was really impressive.  Watch the video below.

If you missed the business section of the Houston Chronicle for Sunday, April 10th, you missed the paper’s analysis of the Houston area’s home sales for 2010 broken down by area and then by subdivision.  The analysis or report took up space in the entire business section.  It was broken down into 8 regions or areas and then listed the subdivisions in those regions.  The Humble and Kingwood areas were all included in the Northeast region.  Maps were included showing the percent of the market change from 2009 to 2010 and broken down by zip codes.  Maps  were also included showing the percent of foreclosures in different areas.  The information was compiled for the Chronicle from the records of the Houston Association of Realtors. 

I’m not going to try to get into any further details about different subdivisions, etc.  If you are curious about your own particular house or neighborhood, you need to contact me (see contact page) and I can provide you with information that is more specific to your situation.  As a Realtor, I have access to the information that was used for the study.  I also kept a copy of the page covering the northeast region.  Call if you want a copy.

As budget and deficit cutting gets underway, our leaders in Washington will look for ways to raise revenues without an obvious “across the board” tax hike.   Promising to raise our taxes is not a popular campaign slogan.  In the past, tinkering with the tax code has been easier than a tax hike or a reduction in spending.   An example is the Tax Reform Act of 1986.  For those of you too young to remember, we tax payers were allowed a tax deduction for just about any interest that we paid on personal loans, including the interest on our mortgage as well as credit cards and car loans.  The ’86 tax act eliminated most of the interest deductions, but still allowed a deduction for the home mortgage interest.  I believe it has now been limited to the first $1 million of debt.

 With the spiraling national debt, our leaders are again looking for ways to cut costs and increase funding.  And, once again, the deduction for mortgage interest gets tossed around in discussions for possible elimination or reduction.  This is really a popular tax deduction and I don’t see any major changes taking place to remove it.  The National Association of Realtors is definitely front and center on this issue.  They are lobbying congress and they are urging each of the Realtor members to contact their members of congress to protect the deduction from elimination.

If you are in favor of keeping the deduction, we Realtors are working hard to help you.  In today’s real estate market, it’s important to keep it as an additional incentive for home ownership, and therefore bring stabilization to home values.