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 Realtor Evan Compean from Champions Real Estate Group in Houston. He has been in the real estate industry since 2002, where he started as an investor. He bought, sold and leased his own properties with the help of other agents.
Compean is now focused on helping consumers with a variety problems, ranging from appraisal issues to repair negotiations.
Houston Agent (HA): What housing trends should Realtors be on the lookout for in 2014?
Evan Compean (EC): Realtors and consumers alike should expect several trends to continue and possibly a few trends to redevelop. For instance, everyone has noticed the steady increase in prices and rents. This trend should continue due to the inadequate amount of inventory and healthy job market bringing in completely new consumers to the Houston area.
Another trend which I personally feel is redeveloping is the continued growth of the suburbs at a healthy pace. With the increase of fuel prices, many more consumers wanted to start moving back into the city. This trend still continues, but the recent increase in values has caused many of the popular areas of town to appreciate to levels where not all buyers are able to afford.
If you have a consumer with a budget of $250,000, there are few satisfactory options for many buyers near the city in certain hot spots. I expect older areas to continue to attract attention for those willing to invest money and time, in hopes of gentrification.
Land values have seen a large spike these past couple of years, so I believe the trend of townhomes will become more popular. Areas like The Heights and Eastwood, which house many of the original bungalows of town, will continue to see increases in values because of their limited supply of certain housing stock. Areas with more available land to develop, like EaDo will continue to see more townhomes come up.
I also feel Houston will continue to have a growing disparity between the different microcosms in the city, similar to other large cities. The city will become more dense as values increase, and urban sprawl will likely return and cause the suburbs and exurbs to grow. The more informed a Realtor and consumer are of potential trends, the easier it is to make a decision on anything in regards to real estate.
HA: How healthy is Houston’s mortgage market looking?
EC: I believe the mortgage market is looking very healthy for both current mortgagors, and buyers looking to obtain a new mortgage. Home values have, for the part, ended their downward spiral, and have even seen healthy jumps in value. This has made refinancing much easier, preventing some home owners from defaulting.
The healthy job growth has continued to be a large driving force for the Houston market, bringing in financially stronger buyers, which in turn has caused a larger increase in demand than anticipated. Lending guidelines continue to be very strict, yet I’m seeing more and more buyers have little trouble obtaining loans.
As a whole, the strong financial position that Houston is in has kept the lending industry strong, and will continue to propel it forward.
HA: Existing-home sales have been a bit weak the last couple of months; what are the reasons behind the decline?
EC: This recent decline was to be expected, and not surprising to many experts. Housing inventory has been extremely low and is giving buyers few options. Personally, many of my buyers have very limited options in purchasing a home. They are left with a choice of picking a home that they might not love, or continue waiting for more inventory to hit the market. Many are choosing to wait.
Sellers are also in the predicament of needing to sell, but can’t because values have not surpassed the price they paid for the home. Other sellers are waiting to put their homes on the market at the absolute peak.
We all know that peaks and valleys can’t be predicted in real estate, as Realtors we should continue to inform the consumer of this fact and of the current market. There might be many buyers and sellers who will figuratively miss the boat because they were waiting for the right moment to buy or sell.