Be Careful Who You Listen To

By
Real Estate Broker/Owner with Real Living Signature Properties

Well, they've done it again. Another "front-line" news story reports that there is a major slump in housing sales. The problem is that ALL real estate markets are local -- there is no such thing as the "national" sales figures. It makes about as much sense as talking about national zoning ordinances. In my opinion, the media hype about the crisis in the market only exacerbate the problems. People in areas not strongly affected (such as Houston and/or the luxury home market) see the headlines and panic. It's a lot like Chicken Little - "The sky is falling!"  While we have seen some slowdown across the market, it's hardly time to panic!  We are looking at what could be one of the best purchasing opportunities in our lifetime.

Anytime one looks at only one indicator of an impossibly large market, you can make the case for crisis. In the case of Houston, one should look at the entire economic picture -- I'm sure the same is true for ALL housing markets. The most important factors for the market are: 1) Unemployment remains at historically low levels. 2) Most companies plan on hiring/adding to staff within the next 12 months. 3) People have to live somewhere.

With the collapse of the sub-prime lending market, now is an EXCELLENT time for real estate investment in cities that project continued economic development and employment growth. In the case of Houston, apartments are at capacity (many are over 90% occupancy!) With the panic mentioned above, there are some good deals to be had, especially in the under $150K market. Only careful analysis of the investment opportunity can tell you if a particular property is a good investment for you, but the potential for purchasing undervalued properties is strong. If the community shows a strong rental market, one can walk-in to positive cash flow (assuming reasonable down payment, etc.)

Comments (2)

Susan Hilton
CENTURY 21 Beal, Inc. - College Station, TX
Texas Aggie Real Estate, College Station Bryan Texas Real Estate

I agree. We used to say real estate was location, locaion, location. Now it appears that is even more LCOAL, LOCAL, LOCAL!

May 14, 2008 03:07 AM
Don Eichler
Eichler Properties - Granbury, TX

John, Avery good post and right on target.  The market conditions are always right for the investor, slow local market good for the buyer, fast market conditions good for the seller.  And you have to be a buyer before you can be a seller. 

May 14, 2008 10:49 AM