Kingwood – A Super Neighborhood

Kingwood is a super neighborhood because of its location and the people who live there.

Kingwood is also officially recognized as a Super Neighborhood by the City of Houston . A Super Neighborhood is a neighborhood where residents, businesses, civic organizations and institutions work together for the betterment of the community by identifying its needs and concerns.

 

A council is elected and serves as a forum  where issues affecting the neighborhood can be discussed and addressed. When a consensus of opinion is reached in regards to the various needs and concerns of the neighborhood, the council then implements a plan of action (SNAP- Super Neighborhood Action Plan) to prioritize and address them.

 

The super neighborhood council works closely with the City of Houston ’s City Council and the city’s various departments in order to bring more self-sufficiency to the neighborhood while, at the same time, helping the city to be more effective in delivering the services needed by the community.

 

Currently there are 85 neighborhoods in the City of Houston participating in its Super Neighborhood program but only 49 of these have been officially recognized by the Mayor. A council is recognized and a community designated as an official Super Neighborhood when all the City’s requirements have been met. Kingwood has been an official participant recognized by the Mayor since August 24, 2000 .

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Are You Losing Your Edge?

Are You Losing Your Edge?

 

A recent report released on House Prices in America, by Global Insight, Inc and National City Economics, has found that the Houston area’s real estate market is under-valued by an unbelievable 33.1%! Factors in determining an area’s value were based on population, income and interest rates, among others.

 

According to the newest sales data released by the Houston Association of Realtors®, sales have declined by as much as 12% since last year but the days on market declined by 3 days last month and home values have risen by 0.5% each month for the last three months.

The market is in the buyer’s favor as far as selection and lack of competition. The market still favors the seller because home values are increasing. A buyer should not expect a seller to meet demands in regards to  price, terms and conditions of a sale; but neither should sellers refuse to consider a buyer’s reasonable offer.

 

Just two weeks ago today, in my blog, Interest Rates: Up and Down, I told you that interest rates were on the rise and expected to continue.  At that time, rates were 6.125%, today’s rate is 6.8% and some loan programs have already reached the 7% mark.

 

Last week I asked: What Are You Waiting For? At that time I stated that prices were still rising in the Kingwood – Lake Houston Area although sales were not as brisk as last year. A home selling for $211,000 in April now sells for $213,115 based on a the monthly increase released in the Houston Association of Realtors® report.

 

Not a crazy price increase and only a few more dollars a month right? Wrong! You are losing your buying edge. The longer you wait to purchase a home in the greater Houston area, the more you will lose the edge in return for your dollar and, more importantly, in your purchasing power and your budget.

 

Many people will “run” to be the first at a sale that features 10% – 30% off. Well, in essence, the Houston area is “on sale” for 33% off the “retail value”.

 

I thought I would show you, what this information looks like when translated into house payments  The scenario below is based on a purchase of the same house with a $10,000 down payment, reflecting a monthly increase in the sales price of 0.5%. The payments shown are principal and interest only, based on a 30 year fixed rated with the first payment date starting on June 18, 2008.

 

Month	April	May	June 4	June 18
Sales Price	210,000	211,050	212,105	212,105
Interest Rate	5.5%	5.8%	6.13%	6.8%
House Payment	1,135.58	1179.67	1228.66	1317.57

 

In just three short months your payment has gone up almost $200!. These figures do not reflect debt ratio which will increase along with the price of the house or your buying power.

 

Your buying power to purchase this home has just disappeared before your very eyes. Based on today’s interest rates, you have lost over $24,000 in buying power, which simply means you can no longer qualify for the home that sold in April for $210,000. Instead you will be buying a smaller home or purchasing in another village because your price range has been reduced to the $185,000 – $190,000 range.

 

Please, remember that home values are very localized so how much a home appreciates or depreciates will depend on the neighborhood. Kingwood and its surrounding Lake Houston area home values are on the rise, but how much depends on the neighborhood and the village as well as the style of home (single family versus a town-house). Your financial situation and your buying power are unique to you.

 

Don’t lose you edge. Don’t make a decision to purchase or not without consulting an expert in the real estate field. For assistance, in determining your purchasing power and which neighborhoods best match your finances and desires in living style, please contact me.

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What Are You Waiting For?

If you are waiting for the national news in regards to the housing market to get better, then your wait is over.

 

Although in the news last week it was all about the 14% decline in home sales nationwide, what the media did not tell you is that the worst of the mortgage credit crisis is over. According to the Wall Street Journal, the bottom was reached in April. Another thing to remember is that the housing crisis is in its third year.  In the past the third year is typically the bottom of a bad housing market.

 

The longer that you wait for things to change the more chance you have of paying a higher mortgage payment both in terms of price and interest rates.

 

As I mentioned last week, interest rates have risen and that trend does not look like it will reverse. A barometer for mortgage interest rates is the 10 year Treasury Note. The Treasury Note has risen ½% since March 2008. Recession is no longer a fear but inflation is. Historically, when an inflationary period occurs in the economy, interest rates go up.

 

Nationally, you will still see a decline in home prices in the largest foreclosure areas such as California and Florida . These states alone account for about 1/3 of all foreclosures in the country. California and Florida still have a rough road ahead.

 

Default rates in Ohio , Michigan and Mississippi have already begun to level off. Once the inventory comes down to a normal market level, the real estate market will become stable in these states.

 

California and Florida have suffered the most due to high risk loans and soaring prices. Ohio and Michigan ’s default rate was a mixture of high-risk loans and loss of jobs in the manufacturing industry.

 

The rest of the nation is expected to see an upturn in the real estate market in 2009. According to the House Price Index Report by OFHEO (Federal Housing Enterprise Oversight) in a county by county study, the majority of the nation is experiencing steady and increasing home values. Harris County is among those that stands out with a strong  housing market.

 

So, now that I have addressed the media reports, what are you waiting for? Both home values and interest rates will continue to go up. The Kingwood and Lake Houston markets are not going to get better than they are now.

 

If you are considering relocation to the Kingwood or Lake Houston area, contact me. I will give you all the information you need about the community and home values. I will also help you find a lender that will assist you in determining your purchasing power.

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Interest Rates: Up and Down

Last week in my blog, I mentioned that interest rates had moved up slightly.  Interest rates have been very volatile for the past two weeks. In the beginning of May, rates were hovering below the 6% mark but now the reverse is true. Yesterday’s rates moved down somewhat due to the drop in the price of oil per barrel. Today’s rate is quoted at 6.125%.

The Federal Reserve is watching home sales, the weak dollar and inflation very carefully. As of June 1, the Feds have taken on a policy of “watch and see”. Wall Street is “betting” that interest rates will rise before the end of the year. Some feel it could be as early as October while others think there will be an increase no later than December.

The Federal Reserve, Economists and Wall Street are feeling more confident that the worst of the credit crush is over but at the same time, they are very concerned with inflation.

Historically, the Federal Reserve does not raise interest rates in an election year; but it seems that the recession which was being widely discussed just a few weeks ago, is being replaced by inflation concerns. If inflation fears become a reality, so will higher interest rates. If interest rates are adjusted upward, the consensus of opinion is that they will rise approximately ¼ of a point.

What does all this mean to you? Buyers are always concerned with “price and terms”. If you are considering a home purchase, now may be the wisest choice in terms of a lower house payment. Prices in the Lake Houston area are still increasing in value, although home sales are not as robust as the past few years. Interest rates have begun to inch up and are expected to go even higher in a few months. Don’t miss your window of opportunity.  Take advantage of today’s home prices and today’s rates.

I am not an economist, nor do I have a crystal ball and if the Feds aren’t sure what they are going to do then I certainly don’t know; but I can tell you that lower interest rates mean lower payments. I can also tell you that the days of lowering interest rates are most surely at an end.

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Lucky #7

We have heard a lot about the possibility of an economic turndown in the last few months.  Our friends at Forbes.com decided to do a study about the best cities to withstand a recession. I am happy to announce that the City of Houston ranked #7 on their list.

 

The great state of Texas made quite a showing, with four of its major cities featured in the report. It was the only state to place more than one city on the list. This says a lot about the Texas economy and Texas real estate. The other Texas cities were San Antonio, Austin and Dallas ranking #2, #3, and #10 respectively.

 

Forbes studied 50 of the largest metro statistical areas. The primary criteria for determining a city’s stability were housing affordability, real estate market stability, unemployment and projected job growth.

 

All of the featured cities in Texas are experiencing a downturn in unemployment and an upturn in job growth. Our real estate market throughout the state is affordable with increasing home values in most areas. As to large metropolitan areas, the state of Texas has some of the most affordable housing in the nation.

 

Kingwood real estate is conveniently located just 25 miles from downtown Houston. Our community is one of the finest in the country. I do not believe there is any area in Texas or otherwise that can match it in regards to amenities, aesthetics or location. 

 

If you are considering a move to the Houston area, then consider Kingwood and the surrounding area of Lake Houston as a place to invest your real estate dollar. You will not be disappointed.

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