Caryn Beard is a Realtor at and owner of Caryn Beard Properties in Houston.
Every week, we ask a Houston real estate professional for their thoughts on the top three stories from the week before. This week, we spoke with Caryn Beard, Realtor at and owner of Caryn Beard Properties.
Houston Agent (HA): For the better part of the last half-century, suburban sprawl has characterized development in Houston and most of the country’s major metros. However, a recent study from The George Washington University found that Houston was slowly moving away from sprawling landscapes and instead building more walkable urban places, which essentially means areas accessible by either public transportation, bike routes or on foot. Have you noticed this trend, and if so, how has it affected your business?
Caryn Beard (CB): Yes, I have noticed that people are beginning to prefer living closer to restaurants and walkable amenities. Interestingly enough, though, I’ve noticed most of the clients preferring these areas tend to be empty nesters – people without children or whose children have recently left. I’ve seen them moving away from the suburbs and closer to the city center where there’s more shopping and entertainment, even hospitals are a selling point.
It hasn’t really affected my business, overall. Houston’s economy is good, home prices are good – they have shot up, though. I’m a bit of a pessimist, but I worry we might be in another bubble. I’ve been in business so long, and I’ve seen it go up and down, and Houston has never increased this much in value.
We still have a bunch of land left to develop and a lot of eager buyers, but we don’t have the sellers to satisfy the demand, which drives up prices.
Still, we are seeing more development towards walkability. Condos and apartment buildings are being erected around what essentially amounts to town squares. And around those areas, prices are a bit higher, so I suppose in that respect it has bolstered my business a little.
HA: A recent report from Reis revealed that rental rates in Houston are continuing to climb, bringing the median rent for a 2-bedroom apartment to $1,450. Have you noticed these rent increases, and if so, how has it affected your business?
CB: Rents have gone up, and as a landlord myself, I rather enjoy it, but, historically speaking, rents have always been pretty fair in comparison with home prices. Even still, rents and home prices are rising in tandem.
The thing is, most people want to buy, but they can’t because maybe they had a short sale, or a foreclosure, or just something derogatory on their credit score that will keep them from getting adequate financing. I’ve seen recently a new trend of leasing-to-own, which is allowing these higher risk buyers to start paying towards eventual homeownership. I think this is a good program.
HA: In an article Houston Agent published earlier this week, we discuss common mistakes that sellers make when putting their house on the market. For instance, sellers often allow their ego to get in the way when it comes to accepting offers. What seller, or buyer, issues have you run into, and how do you handle them?
CB: I’m the type of agent that when I go in to a listing, I tell clients – and I sincerely mean this – I want them to get as much as they can for that property. All agents work differently. If a client really wants to list their home higher than market value, I’ll do it, but before we start I look them in the eyes and say, “We have to be in this together. If we price the house high and don’t get any showings in the first few weeks, it’s too high; or if we get showings and no offers, we’re still priced too high.”
I’m finding, and I’ve talked with other agents who agree, even when we price properties on the high side, we’re still getting offers.
The next thing agents need to do in the coaching of their seller or buyer, is explain that unless they get an all cash offer, they should probably be concerned about the appraisal, which can be a tough one. Some agents talk to the appraiser and try to make sure they maximize the homes value, and others just let it be – appraisers can be hard to convince.
Another big thing I tell sellers is to keep their emotions out of the process, because it’s ultimately a business transaction. Just because a seller spent $20,000 updating their bathroom and another $3,000 on some other updates, it doesn’t mean they’ll get an additional $23,000 on the appraisal. It just doesn’t happen.
On the flip side, when you’re talking to the buyer, or even the buyer’s agent, agents need to tell them that if a property doesn’t appraise for the contract price, they may need to put down a little more to get the house.
Agents need to talk with their clients before these things happen, and coach them on how the process, the real process, will work. In my experience, the more you coach your client, the smoother the process tends to be.