It’s no wonder that consumers are a bit confused as to the true picture of the housing market in Houston. While Houston Realtors constantly like to point out that our market is insulated from the national trends, we are constantly bombarded with negative press that makes all of us wonder. Even though sales of real estate in Houston have slightly declined, there are many highly respected experts and studies that prove the viability of the Houston market.
As reported in Business Week, “Federal Reserve Chairman Ben S. Bernanke may be about to get help in his attempt to boost the economy, from an industry at rock-bottom: housing. “Job growth, even with unemployment at 9.4 percent or higher since May 2009, and an increasing U.S. population mean home construction probably will improve in 2011 from its near-record low, said Charles Lieberman.”
The number of U.S. households, an indicator of real estate demand, probably will rise 0.7 percent to 118.7 million in 2011, the biggest annual gain since the beginning of the mortgage crisis in 2007, according to Patrick Newport, an economist with IHS Global Insight in Lexington, Massachusetts.
The lack of new housing starts has been “holding back the recovery, but arguably that drag is fading now that the financial system is recovering,” said James O’Sullivan, chief economist at MF Global Ltd. in New York. He expects a 12 percent increase in residential investment in 2011, along with job growth of 200,000 a month by June, as much as 225,000 a month by the second half and an unemployment rate of 8.8 percent by the fourth quarter.
By far, the most interesting report comes from Nouriel Roubini, the New York University economist. He has been quoted indicating that "It's pretty clear the housing market has already double dipped," says Roubini. "And the rate of decline is stronger than in previous months," he said of the new housing data. Ironically, the housing market must not be too bad because he just purchased a 5.5 million dollar condo in New York. It’s hard to take advice from someone that warns others about the dangers of the market yet personally realizes that now is the time to buy.
Every once in a while, I get some really good ammunition in my “box of fireworks” for the Houston market. Last month, the Federal Housing Finance Agency’s (FHFA) seasonally adjusted purchase-only house price index (HPI) proved my assumption correct once again. The HPI, calculated using home sales price information from Fannie Mae- and Freddie Mac-acquired mortgages was 1.6 percent lower on both a seasonally adjusted and unadjusted basis in the third quarter than in the second quarter of 2010. It was lower for most of the country with a few exceptions and like always, Texas was one of them. Texas ranked # 7 in home appreciation with a one year average of 1.9%. The Houston, Sugar Land, Baytown area showed a 2.86 appreciation rate. As we see property values tumble throughout the country, an appreciation is just plain…appreciated!!
If you are looking to buy real estate in Houston, Pearland or the surrounding areas and need a qualified Realtor to help in your search, please contact Paul Silverman, Broker Associate at Keller Williams Metropolitan. You can visit our website at www.ourfirstnest.com.