At our last Montgomery County REALTOR® brunch the speaker was Jim Gaines who is a research economist with Texas A&M Real Estate Research Center. He spent some time looking at last years housing market and then brought his crystal ball out and looked at what is in store for us this year.
Here's what he had to say about housing in Texas in 2009:
- Texas lagged in the recession; in 2008 we took a pass. In January 2009 we joined in. Typically Texas lags going in and lags going out. We didn't fall as far and have as many problems.
- Tax Credit did help - 10 to 12% increased sales volume - Sales that happened that would not have.
- Foreclosures and home builder concessions kept home values down.
- Appraisal issues became a major issue in purchases.
- Lenders have made purchasing mortgages difficult to get. Jumbo loans were almost non-existent.
- Texas as a whole was down about 8% in 2009. The median and averages prices didn't change which is good.
- On a whole 2009 was relatively flat.
- There was not much recovery for home builders but it shouldn't get much worse.
- Parallel to what happened in the 1980's.
Here's what he said about Houston in particular:
- Houston ended the year with a 6 month inventory. We were down about 8%. The median price was flat.
- #1 home building area in the country even though we are down 50%.
- We are poised for a boom for the 21st century; both population and business growth.
Then he brought his crystal ball out and tried to give us some ideas for 2010. (Just kidding he didn't have a crystal ball and told us so!)
- We will probably have low interest rates for first half of the year. For the second half of the year it is possible that interest rates may increase from 5% to 6.5%.
- Job losses will go flat but we won't see much gain. 2010 is likely to be a year of damage control.
- Flat to Low growth in the housing market.
- In-migration should pick up.
- Home prices decline MUCH less than the last 2 years.
- Government stimulus should be over. He didn't see politicians voting for it again but have $ left over.
- State & Local Governments & school districts are going to have to restructure.
- Foreclosures continue through 2011. 5 year arms that were given in 2005 are going to come due. (They were sometimes called liar loans.) They had negative amortization, strategic defaults. So far upside down that even if they could meet it they will probably walk. Which means we are looking at having quite a few additional foreclosures.
It wasn't a totally rosy forecast but if you are looking to buy a house it sounds like this is the time to find a deal. On the flip side when you are selling you may not get as much as you want but on the positive side if you are looking to buy another home you will get a deal on the house you buy.
I also think in the big scheme of things a flat market is good!
Copyright © 2010 Marchel Peterson, All Rights Reserved.*Texas Real Estate - Looking back to 2009 and forward to 2010!!*