No Sky Rocket = No Free Fall
In the great state of Texas in general and The Woodlands specifically, we’re fortunate. When real estate markets across the nation were rock n’ roll’n with 20% or more appreciation per year, our local appreciate rates here were stuck in the puny low single digit range – we were bummed, no free money for us.
Fast forward to now. Because our home values didn’t sky-rocket, they didn’t free-fall. Take a look at this Average Price Per Square Foot graph. Rock steady for the past two years. (You can check out other market report graphs HERE.)
One of the primary factors dragging home price into the dungeons is foreclosures. The more foreclosure activity, the lower the prices go. While we have foreclosures in The Woodlands, there aren’t enough of them to drag our home prices down, in fact they’re sorta uncommon. Take a look at this property foreclosure Google Map for The Woodlands. The bigger RED markers are foreclosed properties currently listed for sale. The other dots represent properties that are some stage of foreclosure. If you Click On The Map you will launch the live and interactive map, then you can dink around for yourself. Each of the little red dots has a link to additional property information and properties.
Deal or No Deal
As you might imagine, all the news and broadcast hype about super-duper deals on foreclosures has homebuyers licking they chops in anticipation of getting a once in a lifetime steal. The reality is this; because property values in The Woodlands are stable, banks can sell their foreclosure properties at or very near current values. This means they don’t have slash and burn their prices. Which means that it’s rare to find a steal. There are a few good values every-now and then though. And keep in mind that the current amazing-low-low and soon-to-rise mortgage rates (4% range) make every buyer’s purchase-power stronger than ever – this means you can buy more than ever before. I guess you could say that low-low-mortgage-rates are a steal themselves.
But here’s the thing. Because there aren’t tons or dozens of foreclosure properties in The Woodlands, there isn’t a wide range of styles, designs, floor plans and other desirable amenities to choose from. If you’re keen on buying a dream home, have your agent include foreclosure properties in your search if they match, but understand that finding your dream home (with the amenities you want) and a steal/deal foreclosure wrapped into one is rare. If you’re dream home search begins and ends with finding that rare deal or even rarer steal and you can compromise on the list of matching amenities, then have your real estate agent set you up on an auto-notification program. When a new foreclosure property that meets your criteria tumbles onto the market and is listed in the Multiple Listing Service, you’ll know about it the day it happens and before everyone else.
Here’s another thing to consider, how do you know a deal or steal when you find one? The way you nail down and scientifically determine if its is a real deal, a fair deal or a steal, is to have your real estate agent run an up to the minute market analysis for the neighborhood your interested in. By looking at homes with similar amenities, average prices per square foot for recently sold, current active listings and some other data, you can determine if the property you’re interested is priced to sell. You’d want to have your real estate agent do the same thing for any property your interested in buying; foreclosure or not.
It’s been a rocky two years for the economy and our real estate markets. Oddly for this time of year, there is unusual activity and interest. People are doing more than thinking about pulling the real estate trigger. Formerly fence-sitting buyers are talking about buying and getting pre qualified and sellers are sprucing up their properties in preparation for selling. I think this is due to two primary factors; people feel the economy is back on track, which means their confidence in the future is stronger, and most people feel that mortgage rates, along with gasoline (everywhere) and home prices (here), are going to rise soon. The combination of rising consumer confidence and taking advantage of lower home prices and ridiculously-once-in-a-lifetime-low mortgage rates before they rise, is creating growing activity and inquiry from both buyers and sellers alike.
We’re excited about 2011. If we can be helpful, give me a call at 832-797-1779
Cheers and Merry Christmas.