Buyer Demand Shows No Signs of Slowing Down
According to Ed Wolff, president of Beth Wolff Realtors, Real Living in Houston, the Houston Association of Realtors (HAR) reported 2.9 months worth of average inventory for the month of November, and is anticipating a three to six month supply, more likely staying around 3.1 months during 2014. Houston Realtors have similar predictions about inventory, expecting it to increase slightly as we enter the new year.
“When looking at the beginning of 2013, we were around 3.5 months on average, which I think is probably realistic for 2014,” Martin says. “More sellers tend to put their home on the market, while the big push for buyers to close before the end of the year is over. It is still a very good and healthy number and much lower than the national average, which is around five months.”
There is typically a slight decrease in sales at the beginning of the year. But according to broker associate Bridget Martin of Heritage Texas Properties in Royal Oaks, buyer demand is extremely strong right now because so many people are moving to Houston.
“We have so much relocation right now that these buyers have to purchase,” she says.
Realtors are hopeful that available inventory will increase this year. However, demand is so strong that Wolff says that it is going to take one to two years to catch up with inventory.
“The 2.9 month average across eight counties represented by the Houston MLS is astronomically low,” he says. “If you look at the location throughout the city where the majority of interest of the current purchasers are, it goes far below that 2.9 month average. If you need to move, we have no problem selling your house. The problem is going to be finding you something that’s acceptable for your next home.”
With Houston’s strong economy and low unemployment rate, there are not many factors that would hinder buyer demand either. But the increase in interest rates could be a problem for potential homebuyers.
“Economists in our industry have indicated that the market can withstand some increase, but anything rising above 6 to 7 percent would certainly impact a buyers ability to qualify for a loan,” Borden says. “This could knock many first-time buyers out of the home purchase market entirely.”
Other than rising interest rates, one of the only factors that would affect buyer demand is a natural or economic disaster (hopefully, neither of these will occur in 2014).
“Typically natural disasters are more on a local scale (hurricanes for us), while economic disasters are more national (stock market crash),” Martin said. “When you have disasters such as these, purchasing a home is not on the priority list for most buyers.”
Interesting article, but it would be prudent to at least mention the factors which are driving demand, particularly since some of them are neither organic or sustainable. It appears you don’t appreciate (or don’t understand) the real factors driving the current demand and asset inflation in our real estate markets. With the Fed’s balance sheet at $4 trillion and climbing, and TX oil production going parabolic, it’s pretty easy to see why demand is as robust as it is. The real problem is that neither of these two phenomena are sustainable. This particular statement caught my attention:
“With Houston’s strong economy and low unemployment rate, there are not many factors that would hinder buyer demand either.”
I would argue that we are witnessing unprecedented asset inflation to keep a corrupt banking sector afloat. At the same time, we’re making homes unaffordable for a large percentage of the population. If that’s your idea of progress, then by all means let the good times roll. Personally, I’m advising my clients to take a more cautious, realistic approach in our current real estate environment. While the 2008 housing collapse may be behind us, the next one is creeping up in the rear-view mirror. This time is not different. It’s just a different verse of the same song because none of the real problems in the economy have been solved; they’ve just been papered over.
“Debt that can’t be paid won’t be paid.”
http://aaronlayman.com/houston-tx-housing-bubble/
You cannot do a short sale until you’ve adelary missed payments. If you are up to date on your mortgage, the bank has no reason to worry and therefore will not accept a short sale. The bank knows you can still make the payments because you still are, and will expect you to continue to fulfill your end of the bargain. If you do fall behind on payments, you have to have a good reason why. Such reasons might be a death in the family, loss of job or an injury that has kept you from working. A short sale protects the owners credit when the borrower can no longer make the payments. In that event, the bank realizes it’ll take many more months to wait to evict you and sell it themselves than if they cooperate with you and allow you to retain possession of the house while they sell it. The bank takes the financial hit and pays all the fees in the sale of the property, but in turn, the owner is not entitled to any equity that has built up on the property.If you have absolutely no equity in the house and just want to get rid of it, you might want to do research or talk with a lawyer about a quitclaim deed. With that deed, you sign off all your rights to someone else and they take on all the responsibility you once had. If nobody you know wants the property, I’m sure there are investors who will be more than happy to take it off your hands, rent it out and wait a few years for the market to rise. Then, you can move on to a less expensive house free from the hassle of your overpriced property.I am not a lawyer and not qualified to give legal advice, so please speak with an attorney about your options. Some of them may give you some quick advice over the phone without charging you. Good luck