Houston Celebrates 2% Drop in Sales REALTORS® CORNER
when compared to the same month last year. While a drop in sales is usually not greeted with open arms, let’s examine why this is excellent news for the Houston market.
N
By PAUL SILVERMAN, Heritage Texas Properties
First, in February 2010 we were still feeling some artificial inflation of the market due to the Federal First Time Buyer Tax Credit. While this incentive fueled a sharp rise in sales, it took a lot of potential buyers out of the market who were planning on purchasing later in the year. When this credit expired last year, the market instantly felt a sharp drop in sales.
The second major factor affecting the market is the much tighter lending guidelines that have been applied the last 12 months. With everything from Fannie Mae overlays, rising interest rates, minimum credit score changes and the upcoming loan officer compensation rules that changed on April 1, buyers have felt decreasing purchasing ability.
The third contributing factor is the total number of foreclosure sales. In February 2011, there was a 16% drop in the total number of foreclosures sales. As we all know, distressed properties normally sell at a significantly lower than market price, which has a negative effect on values and appraisals.
When you look at these three contributing factors, it clearly shows that the market in Houston is returning to stability and our total number of sales are now a result of normal buyer demand as opposed to being
o, your eyes are not playing tricks on you. The latest MLS statistics are out and they show a 2% drop in sales for February 2011
artificially inflated by the Federal Tax Credit. When you mix in the tighter lending guidelines, this also implies that, while it limits the purchasing power overall, the Houston market is still resilient and is headed in a positive direction.
Along with these market metrics, there are more reasons to be extremely optimistic for 2011. Our year-to-date sales have increased 2% and our average price has also increased 4% to $205,495. In addition, Builder Online ranked Houston #7 in Healthiest Housing Markets for 2011. They estimate that in Houston building permits will rise 30% this year along with employment growth of 2.66%.
While it is sometimes hard to interpret statistics, forecasts and reports, it is often a good idea to talk to those on the front line of the real estate market and get their opinion. When speaking with several builders and Realtors, it is apparent that the market is getting better as sales office traffic, phone calls, sales and other positive market factors have improved in the last 30 days.
When you look at all these factors, it paints a very accurate and optimistic outlook for 2011. As builders and Realtors, it is time to be positive and prepare for a successful year.
Paul Silverman, MIRM, GREEN, ABR, CGP, CSP, CMP, SRES, AHWD, ePro is a broker associate at Heritage Texas Properties. Paul is past board member of the GHBA Sales & Marketing Council as well as the Houston Association of Realtors MLS Advisory Committee. Reach Paul at
psilverman@heritagetexas.com.
Focusing on what’s really best for builders. Better coverage, better rates, and flexible coverage options from the strongest insurance companies serving the industry. Hotchkiss Insurance Agency has proudly insured Texas builders and contractors for over 35 years. Continually focused on offering only the best, our program now offers enhanced coverage and more options than ever before aimed at helping protect your business and your bottom line.
Call 713-292-5723 or request a quote online at
www.hiallc.com/ghba
Insurance designed for builders and contractors
www.hiallc.com GREATER HOUSTON BUILDERS ASSOCIATION – BUILDING A BETTER FUTURE | HOUSTON BUILDER | APRIL 2011 17
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16 |
Page 17 |
Page 18 |
Page 19 |
Page 20 |
Page 21 |
Page 22 |
Page 23 |
Page 24 |
Page 25 |
Page 26 |
Page 27 |
Page 28 |
Page 29 |
Page 30 |
Page 31 |
Page 32 |
Page 33 |
Page 34 |
Page 35 |
Page 36 |
Page 37 |
Page 38 |
Page 39 |
Page 40 |
Page 41 |
Page 42 |
Page 43 |
Page 44 |
Page 45 |
Page 46 |
Page 47 |
Page 48