At our last Montgomery County REALTOR® brunch the speaker was Jim Gaines who is a research economist with Texas A&M Real Estate Research Center. He spent some time looking at last years housing market and then brought his crystal ball out and looked at what is in store for us this year.
Here's what he had to say about housing in Texas in 2009:
- Texas lagged in the recession; in 2008 we took a pass. In January 2009 we joined in. Typically Texas lags going in and lags going out. We didn't fall as far and have as many problems.
- Tax Credit did help - 10 to 12% increased sales volume - Sales that happened that would not have.
- Foreclosures and home builder concessions kept home values down.
- Appraisal issues became a major issue in purchases.
- Lenders have made purchasing mortgages difficult to get. Jumbo loans were almost non-existent.
- Texas as a whole was down about 8% in 2009. The median and averages prices didn't change which is good.
- On a whole 2009 was relatively flat.
- There was not much recovery for home builders but it shouldn't get much worse.
- Parallel to what happened in the 1980's.
Here's what he said about Houston in particular:
- Houston ended the year with a 6 month inventory. We were down about 8%. The median price was flat.
- #1 home building area in the country even though we are down 50%.
- We are poised for a boom for the 21st century; both population and business growth.
Then he brought his crystal ball out and tried to give us some ideas for 2010. (Just kidding he didn't have a crystal ball and told us so!)
We will probably have low interest rates for first half of the year. For the second half of the year it is possible that interest rates may increase from 5% to 6.5%.- Job losses will go flat but we won't see much gain. 2010 is likely to be a year of damage control.
- Flat to Low growth in the housing market.
- In-migration should pick up.
- Home prices decline MUCH less than the last 2 years.
- Government stimulus should be over. He didn't see politicians voting for it again but have $ left over.
- State & Local Governments & school districts are going to have to restructure.
- Foreclosures continue through 2011. 5 year arms that were given in 2005 are going to come due. (They were sometimes called liar loans.) They had negative amortization, strategic defaults. So far upside down that even if they could meet it they will probably walk. Which means we are looking at having quite a few additional foreclosures.
It wasn't a totally rosy forecast but if you are looking to buy a house it sounds like this is the time to find a deal. On the flip side when you are selling you may not get as much as you want but on the positive side if you are looking to buy another home you will get a deal on the house you buy.
I also think in the big scheme of things a flat market is good!
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If you are buying or relocating to Spring Texas or Tomball TX and need help from a professional REALTOR®, Marchel can be reached at Marchel@AgentwithResults.com or by phone at 832-721-8332.
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Copyright © 2010 Marchel Peterson, All Rights Reserved.*Texas Real Estate - Looking back to 2009 and forward to 2010!!*
Marchel
Great comparison post; I remember what a nightmare those 80's were.
Hello Marchel, great post with some huge differences and full of some great information.
VB ;o)
Marchel, we are so fortunate here in Texas to have dodged the bullet and not suffered the same extreme downturn as other arts of the country! i am at the Luxury Portfolio Conference in las Vegas now and the Market Presentation today said theta we would start seeing signs of an upturn by the 3rd or 4th quarter of this year!
Marchel, Things might surprise all of us this year....I am hoping for stabilization everywhere and then a rebound but buyers (here) are certainly out.
Marchel,
I want a new crystal ball.... Mine is broken.
Ann Hayden in Wildwood, MO
Marchel- Great blog. I expect to see interest rates go up to 6% after spring, perhaps 6.5% later in the year.
6% and 6.5% are still great rates for a 30 year mortgage. If buyers don't think so, then look back to the 70's and early 80's.
I'll take 6% over 13% any day!
Marchel, one thing about crystal balls and predictions, they are just that, a prediction. If we could bank on them, we would all be on a warm beach somewhere :) :) :)
Marchal, my part of CT is behind everyone else too. Must be a Texas New England type of thing, we do it in our own time in our own way.
Your news is welcomed, and I believe we are all on the way out of a terrible terrible place. Flat for a while, as long as there is no downhill slide again we will be fine.
Now where do you order those crystal balls from????
TOM, I remember buying a home in the 80's and we got a great interest rate of 12.5%. That was even bond money!
ROBERT, We are a bit of an anomaly as far as the nation goes.
RUSSELL, I think we had our downturn back in the late 1980's with the oil bust. After that our prices evened out and I think we just did not have a bubble to burst. That is good news for us now as the rest of the countries prices are getting back in line.
CAROLE, We are to the point where flat if good!
ANN, I wish I could help you with that broke crystal ball but mine is broke also. BUMMER!!
MELISSA, I find it so funny when the lender I use talks about interest rates tanking and they are not even over 6%. Having bought a house in the Carter years and getting a kick butt interest rate of 12.5%.
GEORGE, They are a predicition and just that. Who knows what the future will bring until we are there.
ANDREA, In this case it is a good thing to be behind the curve. This last year has been flat for us but I keep telling my clients FLAT IS GOOD! I can't help you with that crystal ball as mine seems to be on the blink!
Hi Marchel,
I tend to agree with Mr. Gaines on just about everything and not for just Texas but the nation.
Flat is good buyers will have to buy a home with the idea it will be a good place to raise their family not as a retirement vehicle.
As an Aggie, Class of '77, I'm quite familiar with Jim Gaines and the TAMU Research Center. Lots of good information.
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Hey Marchel - Your synopsis of 2009 and crystal ball sounds a lot like mine! Great minds thinks alike!
Marchel...basically, this is the same type of news for Colorado...we'll just have to keep optimistic even when some pessimism drips into our vocation...I know that I'm not telling you anything new...From your blogs, you seem to have good perspective on things! Cherise
Marche A great overview of your market, looks like Texas did better than many other markets. I too expect things to remain flat but then again who am I? the economists can't even get a handle on the market :)
Marchel, I wish all states could have done as well as our Texas market!
Definitely a good time to buy, flat markets are good because they are a necessary stabilizer and add a little security.
A flat market is GREAT considering what everyone else did.
Hi Marchel,
While Jim Gaines report wasn't totally rosy, it sounds a lot better than some areas will see. Damage control at least shows that we have the politicians attention. We the People still have some say...thankfully. Good luck this year, hope it a winner for you.
Gail
Hi Marchel, After I win the Powerball tonight - I'll call you to find me some property so I can build my animal sanctuary!
Great informational post. Have the bluebonnets started blooming yet? I miss all the TX wildflowers!
Hi Marchel...That report certainly gave you a pretty good look into the past, present, and future of real estate in your area. Although the news about the rising interest rates is maybe not the best it is to be expected. They are bound to go up sooner or later.
Kate
Marchel, you sure make Texas look and sound really good, I almost want to move there. What a wonderful promotion of your state.