Why it is a Good Time to Buy a Home in Houston

Why it is a Good Time to Buy a Home in Houston

Houston Mortgage availability. The Houston real estate market continues to be one of the most vibrant in the US. Property values are among the lowest per square foot in the nation. Mortgage rates have increased in the past six months, yet remain within .5% of all time lows. For most first-time home buyers, the economics of purchasing are better than renting in the Houston market. This is especially true for higher income buyers who gain substantial tax benefits by leaving their rental for a new home. Mortgage qualification is steadily tightening as underwriters are under extreme pressure to disqualify marginal clients. However, Houston's energy-fueled economy is providing more job opportunities than elsewhere as high commodity prices maintain steady levels of employment here. Government loan programs that require small down-payments and allow for more liberal credit scoring help many Houstonians qualify as well.

Texas Economic Factors. The Houston real estate market also seems to have been less affected by the recession than most other metropolitan areas. Using economic data, a homebuyer can get a good indication as to whether or not it is a good time to invest. A good idea before buying is to research job growth data from the U.S. Bureau of Labor Statistics. Job data is usually timely in its release and can give a clear picture of trends in the local economy. Another resource is The National Association of Home Builders (NAHB). There you can find a wealth of great homebuyer information as well as state and local employment data. This data shows that Houston is slowly, but surely recovering, with employment figures improving slightly from 2009. Personal income also seems to be improving nationally; and, according to the US Department of Commerce, Texas is leading the way with one of the largest increases in personal income in the third quarter of 2010.

Recent Houston home sales activity. To determine true numbers regarding home sales, three factors must be taken together: housing inventory, sales volume and prices.

Sales and inventory trends are key indicators of the overall strength of any metropolitan real estate market. Growing sales and declining inventories predict future expansion. As inventories build, commercial capital is diverted away from home construction to more robust markets.

Find out how the average "days on market" statistic is trending. This can vary from neighborhood to neighborhood. The Houston Association of Realtors (HAR) regularly updates their data regarding real estate transactions in the Greater Houston area.

Use the appraisal district information to calculate the ratio of owner-occupied homes in the area. A ratio of more than 1-1.5 rentals per 10 houses should raise a red flag. Too many rentals can dilute the value of the neighborhood. Compare the owner name and address to the property address in HCAD or your area property to find out if in fact a house is a rental.

Construction. While construction trends are not as dependable as job growth numbers or sales-trend data for getting an understanding of Houston's local housing market, the number of new build permits issued for builders is a useful means for determining builder outlook on the future of housing activity.

When Looking, Be Subjective. In a time where it seems as though everything you need to know can be found online, it is good to remember that sometimes the old-fashioned way of gathering information might be just as helpful and a good supplement to your fact-finding. Drive around the neighborhoods you are interested in and look down the street - what do you see? Cars or trees? Green grass or brown? Visit open houses, talk to the neighbors, keep in touch with agents in the area; these are great ways to gather information and get a good "gut" feeling on the areas in which you want to buy.

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