Every week, we ask a Houston real estate professional for their thoughts on the top three stories from the week before.
This week, we talked to Christi Borden, a Realtor with Better Homes & Gardens Real Estate Gary Greene in Katy who, in addition to her CIPS, MCNE, ALHS, GRI, ABR and e-PRO designations, has been on the HAR Board of Directors since 2010, and has been involved in the MLS, Technology, Communication, Risk Management, TREPAC and International Advisory Groups.
Houston Agent (HA): HAR’s recent Legislative Priorities Survey found that the mortgage interest tax deduction is very much in favor among Houston’s homebuying public; is that consistent with your clients?
Christi Borden (CB): My clients have indicated that continuing the MID is very important. Though true across all price ranges, it is especially true for the first-time homebuyer, who is basically a renter hoping to be converted to a homebuyer and will most likely purchase a home with the majority of the home price being financed.
At this time, most first-time homebuyers are utilizing an FHA loan, allowing them to finance up to 96.5 percent of sales price. That is a lot of interest paid, and their continued ability to deduct that interest is certainly figured into their financial planning. Any revenue from our legislators acting to cut this deduction would barely scratch the surface of the nation’s debt problems and could certainly negatively impact future home sales, especially when studies indicate we are looking at the next generation that may have watched real estate sour for their parents and who may be very leery to becoming homeowners themselves.
Disallowing the MID tax incentive could be just another reason for them to remain renters. While that may be good news for investors/landlords, it would not be a positive move for our nation’s continued economic growth.
HA: Our content on syndication and online marketing is always popular with our readers; do you use any of the syndication sites (Zillow, Trulia, Realtor.com) or have you found other methods of online marketing to be more effective?
CB: I do syndicate my listings to all the major sites through IDX agreements between my broker and my professional associations, NAR/TAR/HAR. While there has always been a strong argument for not allowing this syndication to non-broker sites, that genie is out of the bottle and cannot be easily put back.
On the positive side: Sellers like it because it helps place their property in front of prospective buyers. Buyers like it because they can access data easily. However, on the negative side: The main issue I have is that the data is often inaccurate or out of date. In the state of Texas, sales data is not of public record. Many sites have to either use inaccurate or incomplete data (appraisal districts) or through a VOW (Virtual Office Website). Many of their estimates of sales price or current market value are way off the mark, which has led buyers to make poorly placed offers based upon this inaccurate data.
Also, property listings can be out of date, leading buyers to believe a property is available when it has, in fact, been sold or removed from the market, leading to confusion and frustration.
HA: Lastly, our coverage of boomerang buyers (buyers who are reentering the homebuying market after losing their home to foreclosure) generated considerable interest; do you see the boomerang market growing in the next couple years?
CB: Luckily, the Houston market was somewhat insulated from the massive forecloses that we saw across the county. This is due to many things: Our strong job market, conservative lending environment and stable appreciation rates (4-8 percent annually on average), as opposed to some areas like Florida, Arizona, California, where unfettered speculation and unsustainable spikes in imagined value combined with outrageous lending vehicles.
Those areas fell hard and resulted in widespread foreclosures. While I do anticipate post-foreclosure buyers re-entering the market in the three to five years, my best advice for them now is to talk to an experienced lender to see what they need to do to repair their damaged credit so that they are in a good position to purchase once the foreclosure black mark is removed from their credit history.