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 with Callee Maglothin, a Realtor with Keller Williams Memorial, specializing in the Spring Branch, Cottage Grove, Galleria and Energy Corridor. Keller Williams Memorial honored her with the Rookie of the Year award, in addition to achieving Top 10 Producer status. She was an active member of the Keller Williams Agent Leadership Council, and earned a five-star rating from Texas Monthly Magazine. Maglothin has lived in the Greater Houston area for over 20 years and received a BBA in Marketing from Texas A&M University.
Houston Agent (HA): Are you seeing more buyers interested in renting or homeownership in your area? Why do you think that is?
Callee Maglothin (CM): I’m seeing a lot of renters, but I still would say more homebuyers. If you look at rental prices, they’re around $2 a square foot when you get closer into the downtown area. I think people are seeing they can live in a 700 square-foot home for $1,400, versus paying a mortgage for the same price for a home with a lot more space.
I think the rental prices are so high that people are purchasing more often. The only reason I’m finding people still pursuing rentals on the most part is because some buyers are not able to find what they’re looking for, due to the lack of inventory, so they’ve decided to rent a little bit longer and wait for something to come up.
I would say in the next five to seven years, we’re going to see at least a gradual improvement, or it will stay pretty stable. I think it’ll still gradually increase, but I don’t think we’re going to see the spike that we saw this summer.
HA: There has been a rise in mortgage rates this year. Will it continue to rise?
CM: Yes. I think it will rise gradually, because it’s had a big jump a few months ago. As far as predictions go, I’ve been reading that the rates will likely stay around 4.6 to 4.8 percent by this time next year. I hope that the Fed understands that the interest rates are to be part of our housing recovery, so I’m hoping they’ll let it be a gradually uptake, and not move to quickly. Once it starts getting closer to the sixes and sevens is when the Houston market might start feeling it more so than we have.
HA: Foreclosure activity has declined in Houston for the past few months. Is this due to any factors in the market? And what do you predict will happen with foreclosures in the next few months?
CM: I can’t think of anything specific, besides the fact that I’ve been working with investors and finding it very hard to find foreclosures. It’s a very competitive market if you want to be an investor right now. I remember last summer, we were talking a lot about shadow inventory, and how the banks had a hold-up of homes that they weren’t foreclosing on yet, because they were doing the paperwork.
We’re guessing they were going to do more of that this year, but I think they were still maybe holding onto some of those (maybe going into short sales), so there are not as many foreclosures. I think that number might rise, but again, I think they’re letting it trickle to help the housing market and homeowners.
I think the number of foreclosures will probably increase, because we’ve been talking about shadow inventory for a while. I know there are a lot of homes that should be foreclosed but aren’t, and something has to happen to them. If not this year, I have a feeling it will happen this year. But I don’t foresee a big boom of foreclosures hitting the Houston market because our jobs are so high, salaries are high, and I don’t think it will bring the Houston housing market down.