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 Sarah Ghandour, an agent with Natalie Glass Properties in Houston. Ghandour has been in the real estate industry for eight years and specializes in Houston’s upscale high-rises, condominiums and single family homes. She is a member of the Institute for Luxury Home Marketing, Lakewood Ministries and Toastmasters. In addition, she participates in out reach programs and local charities around Houston, and volunteers at Fort Bend Women Center.
Ghandour grew up in the Clear Lake/Friendswood area, and earned her degree from the University of Houston. When she is not working or volunteering, she enjoys spending time with her family, friends and her puppy, Sammi.
Houston Agent (HA): What kinds of factors did homebuyers consider last year while making their purchase? Do you predict this will be different in 2014?
Sarah Ghandour (SG): There are a few important factors, and I’d like to start with safety. It’s been very important to determine where the safe locations are – that’s actually the No. 1 concern with a lot of my clients. They want to make sure their new neighborhood is going to be gated and safe. They check areas with lower crime rates.
Location is key. There has been an extreme population growth in Houston, and right now people are buying because of their commutes, which have grown a lot longer than what they used to be. What was once 30 minutes is now an hour or an hour and a half. I’m noticing more people buying properties central to their work.
Another factor is interest rates. In the past few years, they’ve been fairly low. In 2012, a conventional loan on a 30-year mortgage was around a 3.1 percent interest rate. Right now, it’s close to 4.7 percent. But it’s under 6 percent, so it’s still considered really low, and has motivated buyers to buy, because they can purchase a more expensive home at a lower rate.
Right now, a lot of people lead busy, fast-paced lives, and because of this, many buyers are looking for a low-maintence home. They don’t want to mow lawns or do repairs. They are buying properties based on what’s going to eliminate more time, which will allow them to spend more time with their families or out on the town.
HA: How is Houston’s foreclosure market looking? Are you noticing any improvements?
SG: In the past few years, I’ve noticed a lot of changes with the foreclosure market. I used to work with a lot of investors in purchasing foreclosures, and there has been less inventory on the market in the past year-and-a-half. One thing that contributes to that is stricter lending standards.
A few years back, Fannie Mae started new guidelines when it came to investors buying foreclosures, making them wait until they are a few days on the market before purchasing. This allows primary residents and homebuyers to have a shot at buying foreclosed properties. The government is setting up programs that make banks and lenders more flexible to work with homeowners who are struggling with their mortgages, and help them create a plan to help them pay.
I think inventory will remain fairly low, and that’s because of the market trends and interest rates. I think it will continue to decrease in inventory.
HA: Inventory is currently at an all-time low in Houston. Do you believe it will increase in the new year?
SG: I think it’s going to continue to remain low, because of the resale market and our low interest rates. I think if our interest rates were to climb, that may have an influence, but because we’re still under 5 percent, homebuyers are quickly running after homes. There are multiple offers everywhere – it is definitely a seller’s market. Right now, homebuilders are dominating the market, since many projects in the process of being built right now. In my opinion, I think in the next year, as long as we keep under 6 percent in our interest rates, I think inventory will still remain low.
Close to 1,400 people relocate to Texas daily, so there is a lot of activity going on in Houston’s real estate market. It’s very exciting – Realtors are hustling to get homes. But it’s also opening a door of opportunity for new homebuilders. Many buyers are considering building new homes because they’re low maintenance, brand-new, they don’t have to worry about inspections, etc. The new development here is amazing.
The only thing that may influence a bit of buying decision could possibly be the 2014 election. But I guess we’ll stay tuned to see how that will impact our economy in Houston.