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 Chance Brown, the broker/owner of Realty ONE Group Lone Star in Houston. Prior to his current position, Brown gained real estate experience as a sales coach, sales manager and Realtor. He is a graduate of the Texas Realtors Leadership Program and a recipient of the NRG “20 Under 40 Rising Stars in Real Estate” award and the Fort Bend County Business Journal’s “20 Under 40 Executives” award.
Chance earned his degree from Sam Houston State University and lives in Tomball, Texas with his wife and two children. When not working, he enjoys reading, riding motorcycles, and spending time with his family and friends.
Houston Agent (HA): Houston has been ranked the 7th most popular market for foreign homebuyers. In your opinion, what attracts foreign homebuyers to Houston and why?
Chance Brown (CB): I think all the things that make Houston a desirable location for anyone looking to move make it equally attractive for foreign homebuyers. There is a low cost of living, low taxation, an ease of setting up a business from the financial side, and good schools and entertainment. All of that combined create a place where people can be happy for both work and play. Also add in a diverse mix industry that attracts people from all over the world. Houston really has everything that a foreign buyer needs to come to our city and prosper.
HA: What kinds of factors did homebuyers consider last year while making their purchase? And do you believe these factors will still remain important in 2014?
CB: Based on the National Association of Realtors’ (NAR) profile of homebuyers and sellers, the overall thing that buyers are looking for hasn’t really changed too much over the past several years. But what we’re seeing is people looking for energy efficiency and low commuting costs, associated with the home and location they choose.
What that really means to me is that they still want the house of their dreams, but they want a low cost, low maintenance and low time commitment purchase. I think all of that lends itself to buyers looking to purchase homes now that fit more of a lifestyle. They want to spend more time doing the things that they really like to do, instead of working on their house, mowing their lawn or sitting in traffic.
The perfect example of the importance of the lifestyle element is relocation. Twenty years ago, there’s no question that if Exxon Mobil was moving their headquarters to Houston, they would go into Downtown Houston and let employees commute from the suburbs. But today, and looking to the future, they picked a suburban location close to good schools, shopping and things that fit the lifestyle of today’s buyers.
As far as going into 2014, I don’t really think there’s going to be much that changes in what buyers are looking for. I really think the wild card for 2014 is going to be the mortgage market. Between interest rates going up and the new rules and regulations being placed on the industry, mortgages are going to be key on where the market goes and what people can buy. I think it’s a great opportunity for agents to become experts on mortgage related issues or team up with a really great loan officer who knows what they’re doing.
HA: In your opinion, what caused Houston’s real estate market to be so strong last year?
CB: I think the market strength came from several sources that really combine and create a perfect storm. We created in Houston nearly 100,000 jobs last year, and despite preconceived notions, not all of those came from the oil and gas industry. If you combine that with low interest rates, the high demand caused people who have been sitting on the sidelines watching their equity position start to make the decision to come out and sell. As they did, the price appreciation helped convince others to sell.
Our current inventory level is at 2.8 months, and our market equilibrium is about 6 months. There’s a shortage of homes on the market and a lot of demand for people to sell their house. I think that demand is going to keep the market strong throughout the next year.