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Comprehensive Market Report for 2011: Recovering Sales and Highest Price on Record

Erion Shehaj — Wed, 25 Jan 2012 19:12:57 +0000

It’s that time of the year again! Today we will be taking an objective look at the performance of Houston’s real estate market in the year 2011 and provide you with a clear picture of how the market is doing currently. It is always good to stay informed on local market conditions but this analysis is especially helpful if you are considering a move in the next 12 months or so. Instead of an always positive spin on the data, our aim is to give you the facts and our expert interpretation of them and make your decision easier.

First, the data in a vacuum

Let’s take a look at the data HAR released a few days ago for the year 2011:

Total Property Sales: 63,610

Total Dollar Value: $13B

Average Sales Price: $213,723

Median Sales Price: $155,000

Quite a handsome set of numbers, isn’t it? Without some context however, it just makes your head hurt and tells you nothing.

Add in some historical context

click for full size image

The strongest indicator of market and recovery strength is the total number of sales in a particular year. This may come as a surprise to many but even during the lowest point of the recession, average prices in Houston never really dropped. They were either flat or growing slightly. What revealed the weakness in the market was the lower number of sales. In fact, we had declining sales for 22 consecutive months until the government tax credit lifted sales in late 2008 mid 2009.

So how did the Houston real estate market do in 2011 when it comes to sales? Short answer: Better. The total of 63,610 properties sold was a 4% improvement over 2010 and a 1.5% improvement over 2009. Remember that sales were on steroids during 2o08 and 2009 so direct comparisons aren’t fair. Total sales in 2011 and 2010 reflect the true state of the market, whereas in 2009 and 2008, they reflected an inflated market. So the 2008 spike you see in the graph should be taken with a big pinch of salt.

Conclusion: Sales in 2011 show a real estate market in a moderate recovery. Definitely not the time to throw a party yet, but this is encouraging.

Click for full size

The number of sales tells only half the story. After all, Florida had soaring sales in 2009 and 2010 but most those sales were foreclosures, short sales and distressed properties which sold at low prices. That’s not good either. So, after we found out we sold more homes we need to look at the prices those homes fetched.

The average sales price for the Houston real estate market in 2011 was $155,000 which is the highest number on record. That said, this average sales price is a 1% improvement over 2010 and it follows a trend of minimal appreciation seen since 2008. So, prices are holding up well while sales are increasing. We’ll take that.

Decisions, Decisions

So what should you do if you’re considering to buy or sell in 2012? The first answer is easier than the second.

If you’re looking to buy, there are three huge reasons to make that move in 2012. First, interest rates are scary good. To illustrate that point, think about this. If you had purchased a home in 2010, the average 30 year fixed mortgage rate during that year was 5%. Now it’s 3.82%. So if you take a $150k mortgage, you’d be saving 13% on your payments or $1200 for every year you have the mortgage. Like I said, scary good. Second reason is that there are plenty of deals out there. Banks have been slow dripping their inventory onto the market and kept foreclosure sales at roughly 20% of the total. That approach extended the time it took to clear out the foreclosure inventory so in 2012 there will be plenty of bank owned homes on the market. Another factor that will contribute to this will be the supply of short sales available. Banks have somewhat streamlined the short sale approval process and that has lead to more short sales being approved in a shorter timeframe. Third, financing options are plentiful. Don’t listen to boneheaded news reports that now you need 20% down or excellent credit to purchase a home. While guidelines have tightened, you can still get a conventional mortgage with 5% down and a FHA loan with 3.5% down and the required credit score is above 640. If you want to take a look at what’s on the market, you can start your search.

If you’re considering a sale of your home, your decision will largely depend on your reasons behind the move and the local conditions in the specific neighborhood. If you’re being transferred, you may have no choice but to sell or lease and a market analysis of your home can point out which one of those makes the most sense for you. If instead you have the option to sell but no obligation, the market conditions in your neighborhood and the time (and price) when you purchased your home will determine if you should put the home on the market or hold off. Either way, a disadvantageous sale can be offset by an equally advantageous purchase in this market.

File your 2012 homestead exemption and lower your property taxes [New Requirements]

Erion Shehaj — Thu, 19 Jan 2012 21:23:04 +0000

If you purchased a home last year and occupied it as your primary residence by January 1, 2012, and you aren’t currently claiming homestead on a different property, you are eligible to lower your property taxes through filing for your homestead exemption in the country where the property is located. Here’s how it works: The taxing authorities (school district and county) allow you to remove part of the taxable value of your home for tax purposes since you are using the property as your residence. For example, if your property is valued at $100,000 and you qualify for a $20,000 exemption, you would pay taxes on just $80,000 therefore reducing your property taxes significantly. The deadline to file is between January 1 and April 30th, 2012 – You cannot file before or after and if you miss it, you would not have another chance to file until this time next year.

New Law

In September of 2o11, House Bill 252 imposed new requirements on property owners that want to claim exemptions. Due to the spread of duplicate or multiple filings of homestead exemptions on several properties by the same owner, this bill now requires the homeowner to provide the following along with their application:

Copy of drivers license showing the address of the property and
Copy of car registration with the property address. In the absence of a vehicle, you can provide a utility bill with that address or complete a notarized affidavit

Harris County

If your property is located in Harris county, please print out the Harris County Application for Residential Homestead Exemption form , fill it out and mail back to Harris County Appraisal District, P. O. Box 922012, Houston, Texas 77292-2012 along with the supporting documentation from above. If you have any questions about how to complete the form, you can email me or call me on my cell at 713-922-2702.

From the Harris Country website these are the exemptions that may be available:

School taxes — all homeowners.
If you qualify for the homestead exemption, you will receive at least a $15,000 homestead exemption on the value of your home for school district taxes.

County taxes — all homeowners.

Harris County currently provides a 20% optional homestead exemption to all homeowners. This means, for example, that if your home is valued at $100,000, the exemption will reduce its taxable value for Harris County taxes by $20,000 to $80,000.

Optional exemptions — all homeowners.

Any taxing unit, including a school district, city, county or special district, may offer an exemption for up to 20% of your home’s value. The amount of an optional exemption can’t be less than $5,000, no matter what the percentage is. For example, if your home is valued at $20,000 and your city offers a 20% optional exemption, your exemption is $5,000, even though 20% of $20,000 is just $4,000.

Fort Bend County

If your property is located in Fort Bend County, you can download the application, and mail back to:

Fort Bend Central Appraisal District
2801 B.F. Terry Blvd.
Rosenberg, Texas 77471-5600

Here again you will need to provide supporting documentation (driver’s license and vehicle registration or utility bill).

Download Brazoria County , Montgomery county and Galveston County applications.

Nite of Lites in Prestonwood Forest – Merry Christmas [Photos]

Erion Shehaj — Mon, 26 Dec 2011 19:36:29 +0000

From our family to yours we want to wish you a Merry Christmas.

For a wonderful treat, visit Prestonwood Forest’s Nite of Lites: A neighborhood wide spectacle of beautifully decorated homes at no cost. Decorations will be up until January 1st so there’s a few more days left. You can get directions to Prestonwood Forest here, or visit the official neighborhood page for a list of winners, entrance points and more. It’s become a Christmas family tradition of ours since we moved to Northwest Houston to attend this event. People drive in from all over the city to be a part of it. Below are some photos I took when we went last week. Enjoy!

For all the photos from Prestonwood Forest’s Nite of Lites view the Flickr slideshow

Houston real estate market report – November 2011

Erion Shehaj — Fri, 23 Dec 2011 01:15:48 +0000

Market stats for November 2011 were released by the Houston Association of Realtors on Tuesday. The table below covers the main eight figures that HAR tracks to gauge overall market conditions:

Houston real estate market statistics for November 2011

Although useful, these figures by themselves don’t provide much insight until they’re coupled with some historical perspective and context. That’s why I went back 10 years to November 2001 and tracked each of these figures to offer you a clearer picture of where the Houston real estate market stands relative to other years – recession or boom.

Property Sales

Along with sold prices, the number of properties sold in a particular period of time is a fundamental indicator of market health. Take a look for yourself:

Property Sales in Houston November 2001-2011

When you take away the outlier that is November 2009, when the government shot steroids into the housing market via the tax credit, you can see that property sales in November are on an upward trend since the 2008 bottom when the recession hit. We are definitely lower than the top of the market numbers in 2004-2007 but higher than similar months at the beginning of the decade (2001-2003). Sales numbers in November are therefore encouraging.

Median Sales Price

The median sales price of $154,950 is the highest among properties sold in the month of November in the past decade. Chart speaks for itself:

Median Sales Price November 2001-2011

You can see definite trends: sideways through 2001-2004, upward in 2005-2007, the dip of 2008 and upward tick in the last couple of years. This chart is by and large good news – our market is on a positive trend in November.

Months of Inventory

Last but not least, months of inventory is a statistic that indicates literally how many months it would take to clear out the existing inventory of Houston homes for sale at the current rate of sales. Typically 5 months or under is considered a Seller’s market (more buyers than sellers, sellers in driver’s seat), 6 months depicts a neutral, balanced market, and 7 or higher is a buyer’s market.

Months of Inventory November 04-11

HAR data only went back as far as 2004 on this. We’re currently at 6.2 months of inventory which points to a balanced market between supply and demand. This years figure is a great improvement over last year and it’s in line with number is 2007-2009.

Takeaways

Remember that these are aggregated numbers – that is they provide a macro view of the Houston Real Estate market as a whole during the month of November. That means that if you wanted to know how the market is doing in your neighborhood, you still need to look at the micro view of sales, prices and inventory in that specific neighborhood. If you are thinking about selling your home or just would like a complimentary home value evaluation, you can request one here and I’ll be happy to help.

In the meantime, enjoy your holidays. I’ll be covering December’s figures in about four weeks.

(HAR Press Release)

Ice Skating at Discovery Green Park [Photos]

Erion Shehaj — Wed, 21 Dec 2011 05:17:07 +0000

This past weekeend I took my family to enjoy a night of ice skating at the Discovery Green Park. It was a great experience and if you haven’t been yet I strongly recommend it. Prices were affordable ($10 per person) and the atmosphere was amazing as the park was decorated for the holidays. The Ice at Discovery Green started on Thanksgiving day and will run through January 22nd so there’s plenty of time to go and enjoy. If you want to know how to get there, you can grab directions to Discovery Green. For a schedule of events and answers to common questions visit the official site. I wanted to share some photos I took there this past weekend to give you an idea of what to expect. I hope you enjoy them.

$129,900 :: 17606 Cassina Dr, Spring TX, 77388

Erion Shehaj — Wed, 01 Jun 2011 12:00:32 +0000

4 beds, 2 full, 1 part baths
Home size: 2,525 sq ft
Lot Size: 9,200 sq ft
Added: , Last Updated: 06/01/11
Property Type: Single-Family
MLS Number: 15561594

PERFECT floorplan & PRICED TO SELL! Fresh custom paint,cielings, walls, doors,crown and baseboards,refinished cabs etc.new electrical box,gfi. Both formal living and dining room, large family room, master down and huge gameroom up! Very large bedrooms and tons of closet space! HUGE BACKYARD!Kitchen with lots of cabinets and gas cook-top! Tiled entry, half bath, kitchen and breakfast! Low maintenance exterior with 3/4 brick and cement board siding! Recent exterior paint! so much more

Listed with RE/MAX Vintage