Home sales push total dollar volume past record set in 2007

HOUSTON (November 19, 2013) Twenty-nine consecutive months and counting. That’s how long Houston home sales have held to positive territory. Home buyers sent housing inventory levels down to 3.1 months in October compared to 4.4 months one year earlier, but they also contributed to a record total dollar volume.

According to the latest monthly report prepared by the Houston Association of REALTORS®, home sales climbed 13.5 percent year-over-year, with contracts closing on 6,020 single-family homes. That is the lowest one-month sales volume since March.

The median price of a single-family home—the figure at which half the homes sold for more and half for less—rose 8.9 percent to $177,500. The average price increased 7.9 percent year-over-year to $239,773. Both figures represent the highest prices for an October in Houston.

October brought gains to all housing segments except the under-$80,000 market. Homes selling from $150,000 through $500,000 scored the greatest increase in sales volume.

“Home sales have shown no sign of letting up, which illustrates the strength of the Houston economy and its continued job growth,” said HAR Chairman Danny Frank with Coldwell Banker, United REALTORS®. “Unfortunately, the home buying frenzy has also sparked a recent wave of scams in which for-sale properties are falsely advertised in online listings as rentals with scam artists trying to take advantage of unsuspecting consumers. HAR urges consumers to always work with a REALTOR® and remember that a deal that sounds too good to be true most likely is too good to be true.”

Foreclosure property sales reported in the HAR Multiple Listing Service (MLS) fell 46.9 percent compared to October 2012. Foreclosures currently make up just 7.5 percent of all property sales, down from 19.6 percent at the beginning of the year. The median price of foreclosures edged up 0.9 percent to $85,706.

October sales of all property types in totaled 7,322, a 14.7 percent increase over the same month last year. Total dollar volume for properties sold rose 26.7 percent to $1.7 billion versus $1.3 billion a year earlier. At $17.7 billion total dollar volume for the year, 2013 has already surpassed 2007’s record-setting total dollar volume of $16.6 billion.

October Monthly Market Comparison

Houston’s real estate market experienced gains in all categories in October when comparing sales to October 2012. Total property sales, total dollar volume and average and median pricing all rose on a year-over-year basis,

Month-end pending sales totaled 3,995, a 3.7 percent gain over last year and a strong indicator of another month of positive sales when the November numbers are tallied. Active listings, or the number of available properties, at the end of October dropped 16.5 percent to 31,638.

Houston’s inventory of available homes dipped from 3.2 months in September to 3.1 months in October, down from 4.4 months of inventory one year ago. The inventory of single-family homes across the United States currently stands at 5.0 months, according to the latest report from the National Association of REALTORS® (NAR).

Total property sales 6,385 7,322 14.7%
Total dollar volume $1,334,844,884 $1,690,606,011 26.7%
Total active listings 37,909 31,638 -16.5%
Total pending sales 3,854 3,995 3.7%
Single-family home sales 5,303 6,020 13.5%
Single-family average sales price $222,187 $239,773 7.9%
Single-family median sales price $163,000 $177,500 8.9%
Months inventory* 4.4 3.1 -30.3%
* Months inventory estimates the number of months it will take to deplete current active inventory based on the prior 12 months sales activity. This figure is representative of the single-family homes market.

Single-Family Homes Update

October sales of single-family homes in Houston totaled 6,020, up 13.5 percent from October 2012. That marks the 29th consecutive monthly increase.

Home prices reached the highest levels ever recorded in Houston for an October. The single-family median price rose 8.9 percent from last year to $177,500 and the average price climbed 7.9 percent year-over-year to $239,773.

Broken out by housing segment, October sales performed as follows:

  • $1 – $79,999: decreased 28.6 percent
  • $80,000 – $149,999: increased 7.1 percent
  • $150,000 – $249,999: increased 26.1 percent
  • $250,000 – $499,999: increased 23.6 percent
  • $500,000 – $1 million and above: increased 21.3 percent

HAR also breaks out the sales performance of existing single-family homes throughout the Houston market. In October 2013, existing home sales totaled 5,160, a 16.2 percent increase from the same month last year. The average sales price rose 6.8 percent year-over-year to $223,446 while the median sales price rose 10.3 percent to $165,500.

Townhouse/Condominium Update

October sales of townhouses and condominiums were up 20.0 percent from one year earlier. A total of 583 units sold last month compared to 486 properties in October 2012. The average price rose 12.5 percent to $189,429 while the median price was flat at $135,000. Months inventory fell to 2.9 months versus 5.0 months in October 2012.

Lease Property Update

Houston’s lease property market showed further growth in October. Rentals of single-family homes rose 9.4 percent compared to October 2012 while year-over-year townhouse/condominium rentals increased 3.2 percent. Average rents retreated slightly from their recent record highs, although they are up year-over-year. The average rent for a single-family home rose 5.4 percent to $1,647 while the average rent for a townhouse/condominium increased 5.2 percent to $1,463.

Houston Real Estate Milestones in October
  • Single-family home sales increased 13.5 percent year-over-year, accounting for the market’s 29th straight monthly increase;
  • Total property sales rose 14.7 percent compared to one year earlier;
  • Total dollar volume climbed 26.7 percent, increasing from $1.3 billion to $1.7 billion on a year-over-year basis; at $17.7 billion total dollar volume for the year, 2013 has already surpassed 2007’s record-setting total dollar volume of $16.6 billion.
  • At $177,500, the single-family home median price reached the highest level for an October in Houston;
  • At $239,773, the single-family home average price also reached an October high;
  • 3.1 months inventory of single-family homes is down from 3.2 months in September 2013 and down from 4.4 months in October 2012 while comparing to the national average of 5.0 months;
  • Sales of townhouses/condominiums rose 20.0 percent year-over-year.
  • Rentals of single-family homes rose 9.4 percent while and townhouse/condominium units increased 3.2 percent.



More Details Emerge on Exxon Mobil Campus in North Houston

Next year is the year when Irving, Texas-based Exxon Mobil Corp. will start phasing employees into the company’s new corporate campus in Springwoods Village.

And as that move approaches, more details are emerging of what the 385-acre campus will look like.

“During a typical day, we have about 3,000 workers on site, 16 tower cranes and hundreds of pieces of mobile construction equipment,” Jim Hennesy, project executive for the campus, said in an employee newsletter, exclusively obtained by the Houston Business Journal.

The campus will consist of about 20 office and specialty buildings, which are designed around a central three-acre commons, modeled after great public squares found in Europe and the U.S.

Exxon Mobil’s ‘heart’

The Energy Center, a meeting and training center, will be the largest community space on campus and will serve as the point of entry for visitors and dignitaries.

“The iconic structure will be the symbolic ‘heart’ of the campus and will showcase the corporation’s heritage, people, technology and leadership,” Exxon’s newsletter, The Lamp, says.

The building will feature a 10,000-ton floating cube positioned 80 feet above the plaza and reflecting pool below. The north hall visitor entry will feature a marble staircase with the word “welcome” engraved in the steps in 100 different languages.

A south hall training center will feature the word “energy,” also in 100 languages.

Other facilities include a town hall and auditorium, executive offices and meeting rooms, elegant and causal dining venues, interactive digital displays and a lower outdoor plaza that can host up to 3,500 people for special events.

A major laboratory will support the upstream and downstream businesses. Located in the south area of the campus, the structure, called the Science Quad, will be a research and physical science facility promoting innovation and discovery.

Wellness and child care

A 10,000-square-foot Wellness Center will support the fitness needs of employees and include training rooms with assisted free-weight machines, treadmills, a basketball court and other exercise options.

The campus will also feature an on-site Child Development Center providing childcare and early-education services for children 6-weeks-old to pre-kindergarten. The center has a capacity for about 300 children in 19 classrooms.

“From the start, the campus was designed and is being built for the people who are going to use it,” Bryan Milton, president of ExxonMobil Global Services Co., said in the newsletter.

This central area will be the hub of the development and provide a collaborative space for employees and their visitors.

Houston Real Estate: Houston Building Permits On The Rise

The number of building permits issued by the city of Houston is creeping back to its pre-recession high.

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The city issued $5.7 billion in permits over the past 12 months, according to data collected by the city’s Department of Public Woks & Engineering, Planning and Development Services. That’s a 22.9 percent increase over the $4.6 billion issued during the same period a year earlier. Last month, the increase was 23 percent.

With housing demand in overdrive, builders have been ramping up development amid solid economic growth. Medical projects, schools and other commercial developments have been on the rise, too.

Residential permits grew by 32.3 percent and non-residential permits were up 17.9 percent, according to the Greater Houston Partnership.

The peak was in 2008 when overall permit activity reached $6 billion for the 12-month period ending in October. The low point was in September 2010 when values were $3.1 billion.

Houston Real Estate: How To Stage Your Home For A Quick Sale

When real estate agents talk about staging your home, they’re referring to a method of decorating that is designed to showcase the home’s best assets, impress buyers and sell quickly for the highest possible price.

Because not all sellers stage their homes, especially homes in lower price ranges, you’ll be at an advantage if you do. Read on to find out how.

Why Home Staging Is Important

Although staging is optional, it really shouldn’t be. When you’re dealing with such a significant financial transaction, you don’t want to be lazy and settle for a lower selling price or a longer marketing period than you have to.

Relative to the amount of time and money involved, staging may be one of the most lucrative projects you ever undertake. Potential buyers aren’t just looking for a structure to inhabit – they’re looking to fulfill their dreams and improve their lifestyles. Staging helps sell those dreamsstaging-your-home-for-sale-1 and creates a more emotional purchase that can generate more money for the seller.

Home staging is also beneficial because potential buyers don’t want to see work that needs to be done upon moving into the home. For every problem they see, they’ll deduct its cost from their offering price. If they see too many problems, they’ll pass altogether.

Staging How To’s
While there are plenty of room-specific staging tips, if you’re on a limited budget, it’s best to focus on big-picture improvements and on the areas that will make the biggest difference in your home’s selling price.

These include the exterior and entryway (both heavily impact a buyers’ first impressions), the living room, kitchens and bathrooms, the master bedroom and outdoor living space, such as a back patio. The following techniques can and should be employed in as many rooms of the house as you can afford and have time for:

In the kitchen, potential buyers love to see new appliances that come with the home, but if you can’t do that, make the ones you have spotless. No one wants to see splattered spaghetti sauce, films of grease or piles of crumbs in their potential new home. Likewise, make sure your bathroom sparkles, from the corners of the tub to the sink drain to that spot behind the toilet you don’t think anyone can see. Your goal should be to make everything look new.

There are two major problems with clutter. One is that it distracts buyers from your home’s features. The other is that it makes it seem like the home doesn’t have enough storage space. Put away knickknacks. Keep in mind that buyers will be interested in your closet space, so tossing everything into the closet to hide it away may not be the best strategy.

Buyers need to be able to envision themselves in your home, so remove all the family photos, items with family members’ names on them and refrigerator art. Also make sure to put away all the toys and anything else that is highly indicative of the home’s current inhabitants.

Remove Odors
Pets, kids, what you ate for dinner last night, a mildew-covered bathroom and many other conditions can make your home smell. You are probably immune to your home’s smell, so you’ll need to have a friend or neighbor help you out with this one. Inexpensive tricks for ridding a home of odors and giving it an inviting aroma include baking cinnamon-coated apples in the oven, burning vanilla-scented candles, or throwing some slice-and-bake cookies in the oven. It’s also a good idea to grind half a lemon in the garbage disposal to remove sink odors. While you could use a spray to deodorize your home, it might give it a cheap, institutional bathroom smell, which is hardly the image you’re going for. If you’re a smoker and you normally smoke indoors, start limiting your smoking to outside the home and take extra steps to deodorize indoors. Finally, don’t forget to take out the trash.

Define Rooms
Make sure each room has a single, defined purpose. Also make sure that every space within every room has a purpose so that buyers will see how to maximize the home’s square footage. If you have a finished attic, make it an office. A finished basement can become an entertainment room, and a junk room can be transformed into a guest bedroom. Even if the buyer won’t want to use the room for the same purpose, the important thing is for them to see that every inch of the home is usable space. This includes alcoves, window seats, corners, breakfast nooks and so on.

It is unlikely that a potential buyer will like your wallpaper. Your best bet is to tear it down and paint the walls instead. Don’t even think about painting over the wallpaper – it will look shabby and send red flags for the buyer about all the work he or she will have to do later.

Custom paint colors are the same way. You may love your orange bathroom, but people’s tastes in colors are very specific and highly personal. While you might think that white walls would be ideal because they create a blank slate that allows buyers to envision their own décor and gives them an easy starting point, it’s actually better to paint your home with warm, neutral colors that appeal to the masses and project the homey image you’re trying to sell.

No one wants to live with dirty, stained carpet, especially when someone else made it that way. Linoleum is passé and looks cheap. Though pricey, hardwood floors add value and elegance to a home. They are also low-maintenance, provide great long-term value and are perfect for buyers with allergies. In other words, they appeal to almost everyone, and if not, they’re easily carpeted over by the buyer and preserved for the next owner.

In kitchens and bathrooms, go with ceramic tile or stone if you can afford it. If not, use high-quality vinyl tiles that mimic their more expensive counterparts. If you can’t afford to do that, stick to common areas like the living room, dining room and kitchen. Bathrooms should make the cut too because they have relatively little floor area and therefore won’t be too expensive to upgrade.

Take advantage of your home’s natural light. Open all curtains and blinds when showing your home. Add supplemental lighting where necessary. Outdated or broken light fixtures can be cheaply and easily replaced. If you think your existing fixtures are fine, make sure to dust them, clean off any grime and empty out the dead bugs.

Make sure furniture is the right size for the room, and don’t clutter a room with too much furniture. Furniture that’s too big will make a room look small, while too little or too small furniture can make a space feel cold. Don’t use cheap college furniture, either. You don’t have to pay a lot of money to switch out your existing furniture and you may even be able to rent it, but the furniture should look nice, new, expensive and inviting. You’ll also want to arrange the furniture in a way that makes each room feel spacious yet homey. In the living room, for example, seating should be set up in a way that creates a gathering area around the fireplace.

Walls and Ceilings
Cracks in the walls or ceiling are a red flag to buyers as they may indicate foundation problems. If your home does have foundation problems, you will need to either fix them or alert potential buyers to the problem. That said, a fix would be better in terms of getting the home sold. If the foundation only looks bad, but has been deemed sound by an inspector, repair the cracks so you don’t scare off buyers for no good reason.

Your home’s exterior will be the first impression buyers get and may even determine their interest in viewing the inside. Make sure your lawn, hedges, trees and other plants are well-maintained and neatly pruned and eliminate any weeds. To brighten windows, wash them well, and consider adding flower boxes to brighten them up further. If you can, power wash your home’s exterior – it can make it look almost freshly painted but with less effort and expense. Make sure the sidewalk leading up to the house is clear and clean, and purchase new doormats for the front and back doors. If you have a pool, showcase it by making sure it’s crystal clear. Creating some sort of outdoor living space in the backyard, such as a deck or patio with outdoor furniture, is another way to use the exterior of your home to its greatest advantage.

Last Touches
Just before any open house or showing, make sure that your staging efforts go the full mile with a few last-minute touches that will make the home seem warm and inviting. These include fresh flowers, letting fresh air into the house for at least ten minutes beforehand so it isn’t stuffy, adding a pleasant scent as discussed earlier, and putting new, plush, nicely folded towels in the bathrooms.

Bottom Line
Even if you have plenty of cash, don’t put too much money into the staging process. You want to emphasize the home’s best features, but keep in mind that what sells the home and what will make the home usable for the buyer are not necessarily the same thing. Overall, to get the most bang for your buck, your home staging efforts should be designed to appeal to the widest possible range of buyers. The more people willing to submit purchase offers for your home, the higher the selling price will be.


5 DIY Tips for Home Staging on the Cheap

property-1Your home’s been on the market for a while now, and you’re not getting any offers. Your real estate agent has suggested professional staging, but that’s just not in the budget. What’s a desperate home seller to do?


You might consider a staging consultation. Many home stagers will provide room-by-room assessments for homeowners, offering tips about paint colors, furniture placement, improving traffic patterns and more. Most consultations last about two hours and won’t break the bank at $150 to $250.


Or, you can use these five low-cost, do-it-yourself staging tips to create a space that sells:


No. 1: Cut the clutter


Get boxes and tape, and start packing. Clothes, books, toys, extra pots and pans – pack up everything you don’t absolutely need during the next two or three months. Remember that potential buyers will be opening closets and drawers; if it looks like there’s not room for your things, buyers will assume storage will be tight for them as well.


Too much furniture can also make a space look cluttered. Your home will look bigger if it’s not jam-packed. Go through the house room by room and ask yourself what you can live without. See if your friends are willing to store your things until the house sells, or consider renting a short-term storage unit.


No. 2: Let the sunshine incontemporary-dining-room


“I advise homeowners to open all their window coverings,” says Maureen Bray, owner of Portland, OR-based Rooms Solution Staging. “Don’t just open the blinds — raise them to the top to allow people to see the view and let in light. Home buyers love light, bright rooms.”


Of course, that means windows must be cleaned inside and out, and window sills need to be wiped down.


Got a view you’re not so crazy about showcasing? Consider blinds that can be angled to let in light, or hang sheer panels.


What if you have those heavy, expensive, custom drapes and valances that were popular 20 years ago? “Take them down,” says Bray. “You got your money’s worth out of them. Today’s buyers want light.”


No. 3: Clean, then clean some more


“I always tell people, ‘Clean like there’s no tomorrow.’” says Bray. “A really clean house gives buyers the impression that it has been well-maintained.”


Unfortunately, a one-time cleaning won’t do the trick. You’ll need to keep at it until your house sells. Knock down cobwebs, wipe counter tops, scrub grout, mop floors, wash light fixtures and repeat.


If cleaning bathtubs and wiping down baseboards is simply not your area of expertise, consider hiring a weekly cleaning service. Yes, it’s an investment, but if it shortens your selling time, it’s money well spent.


No. 4: Set the scene


Want buyers to fall in love with your house the moment they see it? home-theatreFirst impressions matter. Your lawn must be mowed and edged, bushes must be trimmed, and flower beds must be weeded and topped with fresh mulch or bark. Add colorful flowers near the front door, either in flowerbeds or pots.


You’ll make your home even tougher to resist if you borrow or rent a power washer to clean grimy sidewalks, driveways, stairs and decks. Remember: You want everything to look fresh, fresh, fresh.


No. 5: Take new photos


Once you’ve decluttered, cleaned and planted flowers, take new photos of your home.


According to a 2011 survey, 88 percent of buyers say their home search relies, at least in part, on online listings. It’s important that the photos used in those listings and printed fliers reflect the improvements you’ve made to your home. Photos that showcase your decluttered, squeaky clean, curb-appeal-laden abode will appeal to a broader range of home buyers.


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How To Create A Bidding War On Your Home



We all thought it wouldn’t last! After all Houston’s real estate market has not seen this kind of activity since 2006 (per HAR). Home prices continue to rise and inventory continues to shrink creating the best opportunity in years for home owners to sell with a maximum return on their investment. As a REALTOR specializing in Houston’s Inner Loop neighborhoods I commonly see listings receive multiple offers and many times before the pictures are even uploaded onto the MLS site. houston real estate, spring  tx real estate, texas city tx real estate, katy tx real estate, woodlands tx real estate, conroe tx real estate, galveston tx real estate, sugar land tx real estate, pearland tx real estate, baytown tx real estate, humble tx real estate, kingwood tx real estate, clear lake tx real estate, pasadena tx real estate, richmond tx real estate, spring branch  tx real estate, tomball tx real estate, alvin tx real estate, friendswood tx real estate, league city texas real estate, league city tx real estate, seabrook  tx real estate, santa fe tx real estate, deer park tx real estate, missouri city tx real estate, dickinson tx real estate, la porte tx real estate, rosenberg tx real estate, stafford tx real estate, webster tx real estate, river oaks tx real estate,


With all of this surge in activity, bidding wars and limited inventory the temptation for many sellers is to take the marketing/preparation of their home for granted. This is a HUGE mistake! The work must still be done.


Sellers should always understand that location is paramount. If you live in an area that’s in demand there will always be buyers. However, in order to secure the highest sale price in the least amount of time with the potential for multiple offers I would like to suggest the following:


1. Do Not Overprice Your Home! In the past if a home was on the market for 2 to 3 weeks it was not a big deal. Now with many homes going under contract in the first 24 to 48 hours those 2-3 weeks will look like eternity to a buyer.


2. Open Houses can still be an effective tool, don’t forget the basics. Effective, quality marketing could secure multiple offers and potentially over the listed price.


3. Make sure the REALTOR you choose is familiar with using the internet and social networks to create an on-line interest in your home. According to recent studies an est. 80% of all home buyers previewed the home they purchased on the internet.


4. Clean the interior, remove all clutter and have the home professionally cleaned. Buyers will be less likely to want to compete with other buyers if your home feels dirty and not well maintained.


5. Create a reason for the buyer to get out of the car with appealing curb appeal and exterior. Buyers know there is limited inventory and that they may be paying over the list price so they are going to be picky.


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Housing Real Estate Market: Houston and Nation Continue to Improve

With record home prices and lots of job growth, it’s no surprise that Houston again placed on a national list of improving metro regions for residential real estate.


The Bayou City was one of 255 U.S. metropolitan areas included on the July National Association of Home Builders/First American Improving Markets Index.houston real estate, spring  tx real estate, texas city tx real estate, katy tx real estate, woodlands tx real estate, conroe tx real estate, galveston tx real estate, sugar land tx real estate, pearland tx real estate, baytown tx real estate, humble tx real estate, kingwood tx real estate, clear lake tx real estate, pasadena tx real estate, richmond tx real estate, spring branch  tx real estate, tomball tx real estate, alvin tx real estate, friendswood tx real estate, league city texas real estate, league city tx real estate, seabrook  tx real estate, santa fe tx real estate, deer park tx real estate, missouri city tx real estate, dickinson tx real estate, la porte tx real estate, rosenberg tx real estate, stafford tx real estate, webster tx real estate, river oaks tx real estate,


The group tracks housing markets that are showing signs of improving economic health across three sectors: job growth, house-price appreciation and single-family permit growth. It includes regions that have shown improvements for six months since their respective troughs.


July represented the sixth straight month in which at least 70 percent of U.S. metro areas qualified for the improving market index, the group reported. The number was down slightly from 263 metros on the list in June, but more than triple the number of regions on the list a year ago.


Here’s how Houston stacked up against other metropolitan areas on the list.


Houston home prices shot up 11.9 percent since the low point in August 2011, based on house price appreciation figures from Freddie Mac. Only 39 metro areas on the improving markets list had higher gains. Phoenix was up the most with a 35 percent gain since its low in June 2011.


Houston added 11.3 percent more jobs since its low point at end of 2009, according to the U.S. Bureau of Labor Statistics. Only 15 metropolitan areas on the list of improving areas showed higher job growth rates since their respective troughs:


  1. Midland, TX    09/30/09    30.4%
  2. Odessa, TX    08/31/09    29.5%
  3. Columbus, IN    07/31/09    22.1%
  4. Elkhart, IN    06/30/09    21.4%
  5. Cleveland, TN    11/30/10    15.5%
  6. Provo, UT    12/31/09    15.1%
  7. Holland, MI    06/30/09    15.0%
  8. Nashville, TN    09/30/09    13.5%
  9. Bismarck, ND    12/31/07    13.2%
  10. Austin, TX    09/30/09    12.7%
  11. Winchester, VA    10/31/09    12.6%
  12. Grand Rapids, MI    07/31/09    11.5%
  13. San Luis Obispo, CA    07/31/09    11.5%
  14. Longview, TX    10/31/09    11.5%
  15. Fargo, ND    04/30/09    11.4%
  16. Houston, TX    12/31/09    11.3%


For house permits, Houston’s growth rate was similar to San Antonio, San Diego and Goldsboro, N.C., according to the U.S. Census Bureau.


New to the U.S. list this month are Cumberland, Md.; Saginaw, Mich.; Farmington and Las Cruces, N.M.; Kingston, N.Y.; and Olympia, Wash. Only one Texas city, Sherman, was among the 14 metro areas that dropped off the July list.


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Housing market: Is now the time to buy?’s Prime Property asked readers last month to vote on whether it was it was a good time to sell a house. The results were close, with 52 percent of folks saying it was not a good time because prices would continue to rise. houston area real estate, real estate texas, houston real estate, real estate in texas, texas real estate, tx real estate, real estate listings, houston texas real estate, real estate in houston tx, real estate houston texas, texas real estate houston, real estate in houston texas, woodlands real estate, houston real estate for sale, real estate for sale houston, real estate for sale in houston, katy real estate, houston commercial real estate, real estate in houston area, homes in houston area, houston real estate market, houston real estates, real estate in houston tx area, houston residential real estate, real estate houston tx area, houston area realestate,houston real estate listings, bellaire houston real estate, houston real estate listing, houston area real estate listings, (That may help explain why our inventory is so incredibly low.)


The poll was based on a survey from Fannie Mae that revealed more Americans thought it was a good time to sell. Today, Fannie released results from a new survey that shows more Americans expect mortgage rates and home prices to climb, potentially spurring home shoppers to act.


The share of respondents who said mortgage rates will go up during the next 12 months jumped 11 percentage points to 57 percent, the highest level in the survey’s three-year history. Those who think home prices will go up in the next year also hit a survey high of 57 percent.


Local experts say the recent spike in mortgage rates isn’t going to do much to move the dial on Houston’s already hot, inventory-constrained market. But clearly the rate hike is having an impact on many consumers.


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Rent-to-Own Deals are Usually Good for Sellers, Bad for Buyers

Most people buy real estate hoping that home ownership will turn out to be a good investment. But increasing wealth doesn’t always come with buying. The same is also true for rent-to-own scenarios, where caution is also highly recommended.

The main issue with this form of home buying is that in most metropolitan areas, only about 1-to-3 percent of available housing is a rent-to-own (R2O) foreclosures, real estate agency Houston, houses rent to own, foreclosure home listings, rental house, Houston real estate, HAR Real estate, cheap homes for sale, homes for rent, real estate investing, real estate foreclosures Houston, big houses for sale, real estate, Houston area real estate, land for sale, real estate properties for sale, Houston real estate mls, foreclosures for sale, foreclosure sales, beach houses for sale, rental homes, houses in foreclosure, foreclosure home, HAR Real Estate Houston, Houston Area Realty Homes, Houston area realtors, business real estate listings, HAR Homes property for sale, HAR Foreclosures, HAR Homes For Sale, buy foreclosure homes, new real estate listings, commercial real estate, houses for lease, real estate for sale, Houston real estate broker, commercial real estate listings, houses for sale, real estate listings Houston texas, house for rent, foreclosure house, Houston Area Foreclosures, katy real estate, Property For Sale Houston, condos for sale, homes for sale, foreclosure home for sale, Houston real estate market, new houses for sale, foreclosure houses, home for rent, Houston commercial real estate, how to find real estate, Houston real estate listings, homes for lease, HAR, Houston Area Property for Sale, home foreclosure listings, Houston residential real estate

Here’s the reason that’s a problem: The vast majority of wealth earned in real estate comes from long-term ownership. If in that small pool of R2O offerings you don’t find a property you really feel good about, yet you still enter into that deal, this is more likely to result in you not owning it long term, because that home was not what you really wanted in the first place.

Bottom line: You probably won’t increase your net wealth as a function of buying that property.

In addition, most people trying to do a R2O deal are trying this strategy because they’re not creditworthy enough to qualify for mortgage financing. If you can’t qualify, the bank is telling you that they have concerns that your financial picture may lead you to default on a mortgage loan.

My advice? Please, take their advice! Work on your creditworthiness. Get some credit counseling from a reputable non-profit credit counseling organization. Get your financial house in order. You are most likely better off saving your pennies and working on your creditworthiness so you can buy that perfect home with low interest rate, fixed long-term financing a few years down the road.

Also, many R2O deals are offered by investors who bought the property and are selling it to you so they can make money! Many of these investors ask above-market prices for the properties because they assume you have no other option.

Additionally, many times the “rent” is above the comparable market rent. So market rent might be $1,500 but you are paying $1,800 with that additional rent to be credited (termed “rent credit”) for your downpayment. But if you aren’t able to purchase for any reason, including the chance you can’t secure bank financing, you don’t get that extra rent credit money back. So the seller keeps it. You lose.

Of course, all terms are 100 percent negotiable, so if you try one of these R2O deals, feel free to negotiate all terms to your advantage, and good luck.

I know people want to own real estate to earn wealth, and I’m the biggest proponent ever, since this can be a great way to earn long-term wealth. But doing a rent-to-own deal is unlikely to increase your wealth and more likely to end up costing you money via forfeits of those additional rent downpayment when you move out.

Oh, did I forget? It’s estimated that only about 10 percent or less of renters in R2O deals actually are able to close the purchase. So at the end of the day, you’ve paid above market rent to someone else. I’m sure they appreciated your increasing their net wealth? But for you, the better route would have been leasing a normal rental and saving money. That’s a more solid strategy for building wealth.

If you want to earn wealth on real estate, you need to buy that near-perfect property for all the right reasons — which is because you want to own real estate for a long time. That’s my philosophy, and it should be yours, too!


Real Estate Glossary of Terms

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