Ron's Blog Conroe/Woodlands/Lake Conroe

A few blogs back I presented ths sales data for Montgomery County and explained that although sales were down, prices were rising. A few buyers sent me emails saying they couldn't figure that out. Well I can't either but is is true. Let me tell you it is true and it is true for most of the State of Texas. Here are the sales price increase/decrease for April, 2007 versus April, 2008. All data is from the Real Estate Center, Texas A&M University. Amarillo +5.5%, Austin +2.7%, Beaumont +7.6%, Brownsville -19.3%, Bryan-College Station -3.2%, Corpus Christi +13%, Dallas -2.6%, El Paso -1.1%, Fort Worth -4.4%, Galveston +7.8%, Houston +.7%, Lubbock +8.1%, San Antonio +5.2%, Texarkana +7%, Victoria +20%, Waco -1.8%. Nine of the sixteen Texas metro areas rose in price while only seven areas increased in unit sales. In general we are seeing home prices increase. Please don't expect prices to drop. We may see periodic drops in certain areas but to sit there and think that you will save tens of thousands of dollars by waiting I do not believe is realistic. No home seller that I know is going to take a beating. Remember a sale takes two parties and both have to win!

If you would like more information from the real estate center here is the link.

http://recenter.tamu.edu/

Thanks and have a great day!! 

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You read the title correctly, Houston is #1! Who says? Kiplinger.com has rated Houston #1 in its' 2008 Best Cities ratings. Thank you Kiplinger.com.
According to the article Houston created over 100,000 new jobs in 2007. That in itself is amazing. The income growth for the city is 13.1% since 2000. New jobs and more money! What a great combination. I will bet there are not a lot of cities in the US that can claim the same. Do you realize that according to the article our cost-of-living index is an 88.1? With the national average being a rating of 100 we are well below the national average. I will wager you right now that along with this great news we will even see the Astros win the World Series this year. Okay I may be dreaming a little there.
But let me ask you this after you have read what I wrote above and what I wrote earlier this month about rising home prices. Why are you waiting to buy? Our city and county are growing, home sales are down but average home sale prices are rising and interest rates are low. Yet some of you are sitting in the corner of the dugout waiting until the ninth inning to come to bat. Well guess what? It is the bottom of the ninth.
Why do I say it is the bottom of the ninth and that now is the time to take your swing at a home purchase or sale? The US dollar needs strengthening so I don't think the Fed will cut interest rates any more. The Saudis just called for an oil summit to examine the current outrageous price of oil. They may turn on the tap. They have 2,000,000 more barrels a day that they can produce. Congress is looking at commodity speculators. It is an election year and our incumbents all want to keep their cushy political jobs and they know every vote counts. They will do something, be it right or wrong to get your vote. NAR just showed that pending home sales just took an unexpected jump. The FHA may start taking credit scores in the 580 area to help increase home sales. That in my opinion is a whole lot of stuff that is happening or is going to happen very shortly to spark the market. Please realize that I am not an economist or even a good prognosticator but I do read, study and know the market. Home prices in our market are not going to go down. They haven't yet and won't in the future. The best deals are now.
Okay grab your helmet and bat. Get out to the on-deck circle (in other words call your mortgage banker and get your prequal letter), warm-up and let's go take our swings at buying that home you have been dreaming about. And please no steroids. That is what got us in trouble in the first place.
Have a great day! And please don't forget to call me so I can help you buy that new home!
Ron

PS 08/16/08 - Houston and Dallas in both the first and second quarter of '08 were named the top two real estate investment opportunity markets. More good news for Houston

Dear Mr. & Mrs. Home Seller, I would like to take a few minutes and tell you what I believe to be today's reality on holding an open house in order to sell your home. I realize you want me to do all that I can to sell your home. Please know that I will do that. But I think both of us want to be efficient in those efforts and holding an open house in today's market is like driving a big SUV - not efficient.
In the old days, meaning one year ago, buyers would go to church on Sunday morning, take in a leisurely brunch afterwards and then go drive around several subdivisions looking for open houses to tour in hopes of finding a home they liked and might consider for purchase. Some of these people would be serious buyers while others would just be tire kickers and still others were just looking for decorating ideas. In reality statistics show that fewer than 2% of home buyers find the home they purchase via open houses. That means you would have to vacate your home and I would have to sit in it for 50 consecutive weekends for me to sell your home using this method. I don't know about you but at some point during that 50 week span one of us might get a little frustrated with the other. What do you think?
What is today's reality? In consists of two phrases. The first of these phrases is fuel costs. With the national average for a gallon of gasoline above $4.00 I do not believe that a whole lot of people are leisurely driving around looking for homes to preview. When people are paying $80 for a fill-up the needless expense of an idling vehicle is not something that most of us can bear. The second phrase that has affected the effectiveness of open houses is the Internet. When one can now sit at home in air conditioned comfort and use the computer to preview homes rather than drive around wasting $4.00 per gallon fuel with three kids screaming in the back seat I think most people will do that. I don't know about you but I am not into self punishment and monetary wastefulness. It just does not make sense to me and I seriously doubt it does to you either.
So please Mr. and Mrs. Seller when I tell you that open houses are a waste of time and money today believe me. Let's think of the buyer and not ourselves when making these decisions. I realize that some of you may not like to hear this from me. However one of the things I promised you as your real estate agent was veracity. To give you the truth at all times even when I knew you might not like to hear what I had to say.
Thanks for listening.
Ron

I promised last week that we would take look at what home prices are doing in our area during this "catastrophic" real estate market that we are experiencing. I think when you take a look at this data you will come to the conclusion that all is not doom and gloom.

The numbers shown below are for the four MLS areas that represent Montgomery County. These numbers show what the average sales was for single family residences sold in April 2008, 2007 and 2006 and amount (in percentage) of that increase or decrease. Take a look and let me know what you think.




MLS--------2008-----% +/-------2007-------% +/------2006
15--------$291,026---14.12%---- $255,026---0.78%----$253,051
19--------$126,069--<12.90%>----$144,737----12.15%---$129,055
39--------$252,019---2.98%-----$244,736----35.41%---$180,734
40--------$169,069---13.87%----$148,469---<5.47%>----$157,052



I don't see a lot of price decreases in those numbers. And I do not think you will in the future either. Sales in our area may be down but prices in the vast majority of cases are going up. As I said in an earlier blog I believe we are at or near the bottom. If you are going to get in on the buyers market you had better do it now.

Questions??? Just send me an email.

I hope you have a great day.

Ron
PS: Sorry about all of the ---- but the system doesn't allow the insertion of a table or if you can I can't figure it out.

How were the April, 2008 sales results for single family residence (SFR) unit sales as compared to April, 2007? Down again but not as bad. Let's take a look.
In MLS area 15 (Woodlands & West) sales were down 17%. In MLS area 19 (Conroe) they were down 9.68%. MLS area 39 (Lake Conroe area) was down 15.91% and MLS area 40 (East Montgomery County) was UP, yes UP 45.45%. Overall county single family residence unit sales declined 12.27% from April, 2007. This 12.27% decline was less than the previous three months of 2008. This lessening in the sales decline may be an indicator that the bottom is near. What a relief that would be for all of us.
The average "Days on the Market" required to sell a home increased in all four county MLS areas. These numbers increased from a low of 14.71% to a high of 22.83%. If you need to sell please remember to price correctly and list your home early.
The number of active listings increased only slightly moving up 1.29%. This small increase combined with the lessening sales decline may, as mentioned earlier, be an indicator that the bottom is near or has been reached. MLS areas 19 and 39 showed decreases in the number of active listings.
When we look at all of the sales numbers objectively, the Texas economic forecast and what the local county appraisers are doing as far as raising tax appraisals on businesses I do believe that something is shaking the trees so to speak. What is doing the shaking? I hope and honestly do believe that it is the pent-up demand for housing. As I mentioned twice earlier I believe the pendulum is about to start swinging the other way if it hasn't already. Is there further evidence of this? Yes I believe there is and I think it is in the area of average sales prices. We will address this subject on Monday along with the year-to-date SFR unit sales numbers.
Have a great weekend!
Ron

Yes it is true, sales in Montgomery County, Texas fell this April versus last April but prices rose in three of the four MLS areas that comprise the county. In MLS area 15 (The Woodlands & west) prices rose 14.12%, in MLS area 39 (Lake Conroe) they rose 2.98%, in MLS area 40 (East county) they rose 13.87% and lastly in MLS area 19 (Conroe) they fell 12.9%. Those numbers are 2008 versus 2007. Amazing that sales fall and the sales prices continue to rise. The "deal" that some of you were hoping for is probably not going to materialize. The number of active listings is also starting to stabilize. County wide there was only a 1.29% increase over the number of active listings at the end of last April.
The average "Days on the Market" did take a big hit versus last April. The increases in this area for the four MLS areas ranged from a low increase of 14.7% to a high increase of 22.8%. Okay so your house takes longer to sell but there is a good chance you may get more money for it. Plan better and plan early is probably the key there.
In looking at the actual sales numbers they did fall again. The amount of decrease is smaller though and I think shows that the bottom is near. I will give you the actual numbers later this week. Don't be surprised if the deal you thought was there vanishes overnight. Last week a client of mine finally decided to make an offer on a home she had been looking at for three months. Well guess what, that same day the buyer got two other offers and my client's was not the high one. Please if you are thinking of making an offer make it today. Time waits for no person.
I hope you all had a great Memorial Weekend.
Ron

I will have the April and YTD Montgomery County sales figures for you on Tuesday. They just came out and I will digest them over this long weekend. In the interim I would like you to ponder the following.
There are four major resources that monitor home sales and prices. They are NAR (National Association of Realtors), OFHEO (Office of Federal Housing Enterprise Oversight), S&P/Case-Shiller Index and Realogy. Of these four major entities only one, yes only one says that home prices are dropping. Overall they reported that US home prices rose 0.6% from January to February of this year. They reported that eight of the ten major housing areas showed increases and only two showed decreases. That isn't what you are hearing on the news though is it. Of course not. Good news isn't news. Only bad news is news.
Historically real estate prices have a standard deviation of +/- 4%. That means from year-to-year the value of your home will increase or decrease no more than 4%. Have you looked at what our savings account or CD is paying right now? I will bet it is not half of that. Where else can you invest your money and be almost guaranteed of good steady growth? Why would you keep renting and throw that money away? Why are you waiting while interest rates are historic lows yet rise a little each week? Are homes sales still down? Yes. Why? Because people in my humble opinion keep listening to the badly reported news rather than listen to good advice.
Those of us in Texas must wake up and realize that we are in good economic shape. We must not let a few small pockets of bad real estate markets dictate what we do. Spend some time on the internet looking at the available listings and see what great bargains are available. It is amazing. Stop being like a pregnant elephant that has a gestation period of 22 months and make a positive home selling or guying decision today. I promise you will not regret the decision.
Do I sound desperate? Sorry I'm not. Had a great sales and listing week. I do though want you, my readers to know what is really going on and not have you rely on biased news reporting.
I would like you to all have a wonderful Memorial Day weekend. I would also ask that you remember the true purpose of this holiday, to remember all of those who have paid the ultimate sacrifice and given their lives in defense of our great country. I have two sons currently serving in the US Army. One is in Iraq and the other is under orders for deployment to Afghanistan. I ask that you remember not only those who have given their lives for us but also those who currently sacrifice their safety for us.
God Bless all of you.
Ron

I didn't realize that you had money to throw away during these almost $4.00 per gallon gasoline days. But from what most of you are telling me you do. Congratulations you are richer than I am.
What am I talking about? I am talking about your desire to buy a home in six months with a credit score between 620 and 650, live in it for 10 years and throw away about $15,000. Yep 15 big ones down the tank. Let's see, that is 3,750 gallons of gas idled away because you don't want to get your credit score to 720 or above by spending about $1,000.
Let me give you some numbers (the interest rates reflected are based on information I collected this morning). If you get a loan today for $150,000 at 5.75% your monthly principal and interest (P&I) payment would be $875.30. If you got that same loan at 6.75% your monthly P&I payment would be $972.90. About $100 more plus of course a higher PMI of say $25 a month. A grand total of about $125 per month because of a lower credit score that you think is okay. I'm sorry but if I can find a way to save $125 per month on my future house payment I am going to do just that. I will gladly trade $1,000 for $15,000 any day of the week.
How do you raise your credit score? Well I can guarantee that you can't do it on your own. You versus a multinational corporation is a losing situation. I know what the law says and I know what the fine print in the law says also. You will almost certainly lose.
Is credit restoration legal? Yes it is. Is it ethical? Yes it is. Is it moral? Yes it is.
What does it take? It takes a national membership association with many benefits, thousands of members and a team of knowledgeable credit restoration attorneys. In other words it takes expertise. It takes team work, you and the association working together to better your situation. Are you going to let stubbornness and a "I don't believe that" attitude stand in the way? Or are you going to investigate the possibilities, make a good well researched decision for the betterment of your family and personal financial situation? I don't know about you, but in these days of $4.00 per gallon gas I am all for admitting where I need help and not be afraid of asking for a little. I think there is something in the bible about acquiring wisdom. Check this out: http://www.national-credit-alliance.org/
I hope you have a great day. See you at the gas pump.
Ron

Two new links to check out:

Free Credit Report

Credit Repair

Email me after you watch the 7 minute video at  the credit repair link above.

Many years ago we used to think that anyone who bought a house using an FHA loan was a bad credit risk or a first time home buyer with limited resources. Although that really was not true that was the prevalent thinking at the time. Today FHA loans may be the way to go. The interest offered are great and there are several programs available. However on July 14,2008 the upfront and annual mortgage insurance premiums associated with FHA loans will be restructured.
What does this mean for you? It could possibly mean higher and more expensive mortgage insurance. The amount of upfront fees and monthly mortgage insurance premium you pay will be based on your credit score, loan length and loan to home value. The formula is becoming more risked based. This is the result of the recent debacle in the mortgage industry.
What can you do to avoid this increase in costs? First of all you can buy before the new formulas go into effect. That means finding and closing on a home no later that July 13, 2008. The other option is to raise your credit score to 680 or above and buy after the new rates go into effect. Both of these options are viable. If you aren't sure how drop me an email and I will explain.
If you really want to read the Federal Register issued by the Department of Housing and Urban Development dealing with the subject here is the link:                  http://edocket.access.gpo.gov/2008/pdf/E8-10625.pdf 
Thanks and I hope you have a great day.
Ron