Aaron Layman's Katy Texas Real Estate Forum

Katy Texas & West Houston Real Estate Market Update - July 2009

Download July 2009 Newsletter

23015 Catalina Harbor Ct. For Sale Avalon Lakes Seven Meadows

Don't miss out on this fabulous waterfront home in the Lakes section of Avalon Seven Meadows. 4 bedrooms with 3 and a half bathrooms. Stone elevation, island kitchen with stainless appliances and granite counters. Soaring ceiling with a wall of windows overlooking the private lake and fountain. Relaxing back yard with covered patio and pergola. Located just a block away from the Meadowbrook Farms Golf Club!

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23015 Catalina Harbor Ct.     $449,900     MLS # 33921731     Status: Active

Flaws In New Home Valuation Code Of Conduct (HVCC) Exposed With Houston TX Home Sale

If you live in the Houston area, you may have seen the June 18th Chronicle article titled "Appraisals: New Bottom Line".  It highlighted one of the recent casualties of the new Home Valuation Code of Conduct, or HVCC. (see http://www.freddiemac.com/singlefamily/home_valuation.html)  A small Houston area home in the subdivision of Idylwood was contracted for close to the asking price of $243,000, but when the appraisal came in at $206,000 the deal fell apart.  Fortunately in this case the owner had the benefit of a still relatively healthy real estate market on his side.  The house was quickly back under contract, and it actually closed last week for close to asking price.  The solution in this case: A cash buyer!

That the appraisal could come in some $35,000 below the actual closed sale price calls into question the implementation of the new appraisal code.  The new code went into effect May 1st, and it has attracted increasing attention because of its impact on the real estate and mortgage market.  The National Association of Realtors (NAR) has called for an 18 month moratorium on the code until it can be further evaluated and refined.

Flaws in the new code are already becoming apparent.  For one, it does not prohibit lenders (the same big banks that got us in the mess in the first place) from having an ownership stake in the appraisal management companies (AMC's) they are ordering reports from.  Common sense seems to have been thrown out the window.

Higher costs to borrowers are already being experienced with the new system.  I have spoken with originators directly about their experience with the new system and the changes to their good faith estimates.  They are bumping up their fees for applications and/or appraisals on their quotes to account for the higher costs of the new system.  It's no surprise that when you add a middle-man (AMC) into the system, the eventual cost is going to rise.  Turn-around times for appraisals have also increased, causing delays in closings and/or added fees.

Perhaps the most glaring evidence against the ill-conceived HVCC are cash transactions like this recent Houston deal where the actual market value is validated by a closed sale.  The bad news for many prospective home buyers and sellers is that it is going to take a lot more cash transactions to expose the HVCC for the well-intended, fatally flawed mess that it is.  Market value is the point at which a willing buyer and seller come together to consummate an arms-length transaction.  The HVCC is bastardizing the whole concept of market value based on objective statistics and data.  The reality, however, is that you can't compare a foreclosure with years of deferred maintenance to a completely remodeled, move-in ready home.  That's the reason appraisers are supposed to look for the most relevant comparable sales, not just 3 comparable sales.

As this recent article from the Florida Sentinel points out, the new HVCC has some seriously negative implications for the real estate industry as well as homeowners.  http://www.orlandosentinel.com/business/orl-cfbcover-appraisers-cfb-062909062909jun29,0,7417063.story

At a time when the government is looking for ways too bolster the real estate market, the HVCC is jeopardizing any stabilization or rebound.  For stronger markets like Katy or Houston Texas, it will likely derail more transactions and depress the market.  Under the new HVCC, many borrowers are going to be forced to bring more money to the table to close a transaction or re-negotiate with a seller to reduce the contract price.  Market value may become a luxury afforded to only the strongest cash buyers.

It's a bit ironic that big banks pushed sales higher and higher while lowering, and in many cases, virtually eliminating underwriting standards.  Now these same banks only want to lend to AAA borrowers with high credit scores and large down payments.  Meanwhile, the average borrower is getting strangled with tighter underwriting standards and the new home valuation code of conduct.

If you have had a recent experience with the new Home Valuation Code of Conduct, I invite you to post your comments.  If you would like to sign the petition to have the HVCC scrapped, you can visit this link...  http://www.hvccpetition.com/

Chesmar Homes Building 6 Floor Plans In Woodcreek Reserve Retreat

Chesmar Homes has joined the list of builders in Woodcreek Reserve, offering six floor plans ranging from 2692 square feet up to 3400 square feet.  Chesmar is offering Energy Star Certified homes on 19 over-sized lots in the Retreat section.  Prices will start from the $250,000's.  For more information you can visit http://www.chesmar.com/woodcreek%20reserve/woodcreekreserve.php

For honest, objective advice concerning the purchase of your new Katy home just give me call.

8011 Salta Verde Lakefront Home For Sale Avalon Seven Meadows

Beautiful Taylor Morrison Pinecrest with in-ground pool & spa.  Located on a fabulous cul-de-sac lot on the main lake.  Water views from front and side of home. Private boat dock for easy access to lake.  Open floor plan with soaring ceilings. Gourmet kitchen with granite counters, stainless appliances and Benedettini cabinets. 

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8011 Salta Verde Point     $575,000     MLS # 76248420     Status: Active

Katy Texas & West Houston Real Estate Market - June 2009

Sales rebounded in May as more buyers were lured back into the market with record low rates and first-time home buyer incentives.  Sales were strong for both area 36 (South Katy) and area 25 (North Katy).  South Katy actually saw an increase in closed sales compared to May 2008 figures.  Prices were stable or slightly higher, although days on market increased.  The positive sales numbers in Katy were a welcome sign for what continues to be one of the state's most resilient real estate markets.

The recent uptick in interest rates and continued softening of the Houston area job market may pose challenges going forward, but the overall trend for area housing remains positive.  Rates are still at historically low levels, and recent economic stimulus efforts appear to be having a positive effect. 

Texas Attorney General Charges O'Connor & Associates of Violating Property Tax Code and Deceptive Trade Practices Act

Texas Attorney General Greg Abbott today accused Houston-based O'Connor & Associates of falsely representing thousands of taxpayers and failing to perform work it was hired to perform.  According to the AG press release, O'Connor is charged with failing to appear at hearings for customers, filing tax protests without taxpayers' knowledge or consent, and submitting fraudulent appointment of agent forms.  You can read the entire press release and view media links here:

http://www.oag.state.tx.us/oagNews/release.php?id=3004

If you have personal experiences, comments regarding O'Connor you may post to this article.  If you feel you have been a victim of fraudulent business practices you should contact the Texas Attorney General's office at www.texasattorneygeneral.gov or call (800) 252-8011.

A visit to the Houston area Better Business Bureau http://houston.bbb.org shows that O'Connor & Associates currently has an "F" rating.  The number of complaints, failure to respond to complaints, and number of complaints that were not resolved are listed as reasons for the poor rating.  Of the 92 complaints processed by the BBB in the last 36 months, 11 were still unresolved.

Remember that as a Texas property owner, you have the opportunity to protest your property taxes yourself for free.  It is not necessary to hire a third party to do it for you.  A good Realtor can assist you in collecting data for your case.  I help a number of my clients every year with their tax protests, free of charge.  When I say service after the sale, I mean it!

Seven Meadows, Cinco Ranch, Grand Lakes Swim Teams Kick Off Summer Meet Schedules

Katy area swimmers will be practicing their strokes again this summer.  Community swim teams from Seven Meadows (SMST), Cinco Ranch and Grand Lakes will begin summer meets this weekend, with Seven Meadows holding its first practice meet Saturday May 30th.  For more information you can visit the links below:

Seven Meadows Swim Team (SMST) - Download SMST Facts

Cinco Ranch Swim Team - www.cincoranchswimteam.org

Grand Lakes Swim Team - www.glswim.com

5 Bedroom 3 Bath Home For Sale In Grand Lakes

Check out this 5 bedroom show-stopper on a quiet, cul-de-sac street in Grand Lakes.  Zoned to some of the best schools in Katy ISD. Open plan includes an island kitchen with granite counters and glass fronts on cabinets.  Rich hardwoods downstairs, and Plantation shutters throughout. This move-in-ready home also includes a wonderful covered patio/pergola combination in the back yard.  Upgraded stone elevation.  Lush landscaping and full irrigation system.

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21826 Mystic Point Ct.     $299,900     MLS # 40096649     Status: Pending

Cinco Ranch Continues To Top State and National New Home Sales Figures For Master-Planned Communities

According to RCLCO's recent press release (Download RCLCO Press Release) Cinco Ranch was the top selling master-planned community for both Houston and the state of Texas in 2008.  With 775 new home sales, Cinco Ranch was also 2nd in the nation.

A Newland representative also reported that sales for the first quarter of 2009 were actually higher compared to last year.  The brisk sales pace for 2009 builds on Cinco's long track record as the prominent destination for Katy area home buyers, offering a wide variety of homes and price ranges.

For more information about the commmunity visit www.cincoranch.com.  For professional, objective advice concerning your new Cinco Ranch home, just give me a call.