Every week, we ask a Houston real estate professional for their thoughts on the top three stories from the week before. This week, we featured Claudette Toomey, Realtor with Taylor Real Estate Group in Houston. Claudette has worked in the real estate industry for over 10 years, becoming a Certified Luxury Home Specialist and a top producing agent in Houston.
Houston Agent (HA): How has the housing affordability affected your outlook for 2014?
Claudette Toomey (CT): Homes are still affordable, and what I’ve seen in new construction, even though there is low inventory which is increasing homes prices, Houston is still one of the most affordable markets. I’m positive that when Spring hits, the housing market will definitely look better, although the increase in mortgage rates may force buyers to become more cautious on how much they want to spend.
HA: Are more people purchasing or renting?
CT: People that are coming into multiple offer situations because of the lack of inventory, and when they don’t get the home, then they may have to rent. Although, renting has become more pricey, with landlords that leased properties for the last five years at $2200 a month that are now leasing them at $3400 a month. Leasing has gone up considerably. People are renting due to our lack of inventory, although there is a lot of new construction to be built in the future, but currently lack of homes for people to move into.
HA: Higher priced new homes have seen a stronger increase since 2010, why do you think that is?
CT: I think it’s because of the lack of inventory. Back in the day, people were able to say, “Hey I want to buy a home,” and it was definitely easier to qualify people for loans and there was more of a selection in homes to choose from. What I’ve seen now for buyers is “Hey, how high can I go in price?” with it becoming more difficult to get pre-approved, and lenders focusing on debt-to income ratio, and it’s bringing price points up. I’ve had a lot of million dollar buyers who have had to go up to $1.2 million , going above asking price. Five years ago , and even 10 years ago, buyers had their choice of lenders to qualify for, and now it’s transitioned more to their budget and realistically what they can afford.