Slowdown? Not Here In Texas

There might be a housing slowdown in the rest of the U.S., but not in Texas. At housing conferences and industry events around the country, dire reports and predictions about falling prices, soft markets, and lost opportunities seem to be everywhere.

Everywhere, that is, except Texas.

No, while the East and West coasts are lamenting the demise of the residential housing market and mourning the times when everyone seemed to be making money hand over fist, Texas homeowners, investors, homebuyers, and REALTORS® are secure in the confidence that comes from a solid market.

Booms all over the state
Consider the facts. The new home market in Austin, for example, experienced record production levels in 2006 - with more home sales closed than home starts.
In Wichita Falls, the Hill Country, and other areas just outside major cities like Dallas, Houston, and Austin, the demand for acreage is also high.

For example, the median price of an acre of Texas land rose 18% in the first half of 2006 over the same time in 2005. And, these areas will likely benefit even more in the future. Millions of Baby Boomers will soon be retiring, and they'll want to relocate someplace beautiful and relaxing that's also still affordable. For many of them, Texas is ideal.

Jobs, stable prices, solid economy
While economists in Texas predict a slow start to 2007 for the overall housing market, prices are stable, the population continues to increase statewide, and jobs are still plentiful.

Those factors all bode well for real estate in Texas. Experts see some markets that are not only surviving, but also thriving, with positive home sales and appreciation in value - and Texas is one of them.

The Real Estate Center at Texas A&M University identified key factors that will contribute to a strong Texas real estate market in 2007, including relatively low taxes, housing that's still affordable, and the fact that Texas is a great place to relocate and raise a family.

And, in Money magazine's Best Places to Live 2006, Sugar Land (near Houston) was ranked third as one of the Best Smaller Cities to live; Austin was ranked second as one of the Best Big Cities.

Low interest rates, more financing options
The Texas real estate market also has interest rates and many financial options for homebuyers on its side. Interest rates have yet to rise sharply, with rates for both 15- and 30-year rates dropping again the week of February 8. Average rates on 30-year mortgages fell to 6.28% from 6.34%, and 15-year mortgages fell to an average of 6.02% from 6.06%.

As for financing options, they're almost limitless when it comes to buying a home. Gone are the days where you had to have a sizable chunk of change to use for a 10% or 20% down payment. Now, many lenders are offering 100% financing, making it much easier to buy a home. (Be aware, though, that a 100% mortgage loan does have its risks; you generally can't build equity as fast with these loans.)

There's also the advent of the 40- and even 50-year mortgage. While not always the best option, it's an alternative way of financing that gives prospective homebuyers a chance to get into a home for a lower overall monthly mortgage payment. Those who may not have been able to afford a home with a traditional 30-year mortgage can more easily do so with a longer-term loan. Interest costs over the long haul are more, but buyers can refinance later to a shorter-term mortgage. Talk to your Texas REALTOR® about options; he or she will be able to refer you to financial resources that can help.

Finally, don't underestimate expert advice. Your Texas REALTOR® is an excellent resource for what's hot, what's not, where to buy, where to stay away, what you should pay, deals to be had, and much more. If there's one person who has a handle on a market or a particular area - and what it's doing or what the trends are, it's your Texas REALTOR®.

The bottom line? Be glad you live in a state that has as much appeal - and as much stability - as Texas does right now when it comes to housing. It's good for all of us, whether you're buying, selling, looking, or just thinking about it.

By Amy E. Lemen