Aaron Layman's Katy Texas Real Estate Forum

Katy Home And Garden Show At Merrill Center This Weekend

The Katy Home and Garden Show will host it's annual event this year at the Katy ISD Merrill Center, 6301 South Stadium Lane.  The show will feature more than 300 exhibits this year, and will be open 10-7 on Saturday and 11-5 on Sunday.  Tickets are $8 for adults, and free for children 12 and under.  For more information go to www.katyhomeandgardenshow.com  or call 281-392-2132.

HAR Reports Fewer Home Sales, Stable Prices For Katy, Houston In 2008

The Houston Association of Realtors reported that 2008 ended much the same way it started.  Sales volumes continued to trend lower, while median and average home prices were fairly stable.  While average and median prices were down from their record levels, prices showed no sign of a collapse, as seen in some other parts of the country.

The most telling figures come from the levels of existing inventory.  The number of homes on the market was actually shrinking, down to 5.7 months of inventory.  Inventory in South Katy is actually around 4 months, meaning that it would take 4 months to sell the existing inventory based on the past 12 month's sales.  Inventory levels in North Katy are slightly less than 4.5% of last year's sales pace.

While the weak economy is certainly a concern for area home owners, the lower inventory figures could be the key to price stability.  I have posted in previous reports that "quality" inventory is still relatively scarce.  As long as this trend holds, the Katy area will continue to outperform most other residential real estate markets.

New Greek Restaurant (Santorini) Open In Villagio At Cinco Ranch

Santorini is a new Greek restaurant in the Villagio At Cinco Ranch.  Named after the picturesque landscapes and breathtaking blue waters of Santorini Island, this casual eating establishment is yet another welcome addition to the dining offerings in Katy.

On a sadder note, Azzarelli's has pulled out of the Villagio to focus on other locations.  Azzarelli's will be operating in the Grand Lakes strip center (6455 S. Fry) formerly occupied by Pulcinella.

Want Lower Electric Bills In Katy/Houston Texas? Look At Berkely California

While local electric providers' rates have dropped in recent months, they have yet to mirror the precipitous drop in natural gas prices.   Centerpoint, our local gas provider, just this week announced a drop in monthly natural gas bills.  One would think this confirmation of lower natural gas prices would bring a new round of rate reductions among electric providers.  After all, electricity prices in our deregulated market are tied to natural gas.

While we are waiting for our lower electric bills, we can look West for a more pro-active solution to our problem.  Berkeley California's Berkeley FIRST program allows homeowners to install solar PV systems with a 20 year amortized tax/loan from the city.  See the link below to the Berkeley FIRST program details.

http://www.cityofberkeley.info/ContentDisplay.aspx?id=26580

Berkeley's pilot program is a creative solution to the high upfront costs of going solar.  With relatively low energy costs, going green has been cost prohibitive for most homeowners, but the trend for future energy prices points in one direction.  Deregulated electricity in Texas has been an abysmal failure by most standards.  That's no surprise considering the large sums of cash that were spent lobbying the Texas Legislature.  The system was designed to protect large corporate interests, not homeowners.

Austin area residents have the benefit of a cooperative electric provider, and the Pecan Street Project should bring some relief to those seeking to lower their utility bills.  Houston area residents are going to have to work a little harder to see significant change with their power providers.  With the current deregulated market and a large corporation controlling a one-way power distribution channel, the odds are not stacked in our favor.

The hot, humid summer days in Houston normally bring our highest electric bills.  Solar PV systems could cut those spiraling electric bills and eliminate the the spike in demand often experienced with our electric grid on the hottest days.  We could soon look to our August and September electric bills with eager anticipation when solar panels work to diminish, or eliminate, our need for power from our local electric provider.  Increased domestic manufacturing of solar PV systems should bring costs down even more, making the cost-benefit picture more and more appealing.  Maybe it's time for Houston City Council to pick up the phone and give Berkeley a call.

Mortgage Rates Hit Record Lows In Katy Houston Texas

Just when you thought mortgage rates had fallen to ridiculous levels, rates dropped again this week.  Rates as low as 4.75% on the 30 year fixed were available this week.  I have been taking plenty of calls from previous clients in the past few weeks eager to reduce their mortgage payments and free up some much-needed cash.  If you think you would benefit, now's a great time to lock in a low rate.

These low rates are also a boon for area home buyers.  While underwriting guidelines now call for down payments of 3.5% or more even with FHA, home buyers with good credit and a healthy down payment are in a very good position.  Good deals with area builders are also available, although quality inventory is not as abundant as some might think.

A recent Metrostudy survey of home builders expects a 20% decline in home starts this year compared to 2008.  Area builders have been fairly pro-active in keeping their inventory down to reasonable levels, and with the economy struggling they will likely continue to tighten their belts.  As reported earlier this week in the Houston Chronicle, local builder Trendmaker Homes announced they would be letting 27 people go at the start of the year.  Reasonable inventory levels will be key to avoiding any significant price declines should the market continue to sour.

HUD Delays Proposed RESPA Rule Affecting Builder Incentives

The U.S. Department of Housing and Urban Development is apparently delaying a proposed rule that would have ended the practice of tying builder incentives to affiliated title and mortgage companies.  In response to a lawsuit filed by the National Association of Home Builders, HUD has agreed to delay the implementation of the new rule for 90 days.  The new rule was previously set to take effect January 16th.

The news is a disappointment for Texas Home Buyers, as the Texas Legislature recently squandered an opportunity to abolish the lame duck Texas Residential Construction Commission.  Legislators claimed that the large donations received from home builders had nothing to do with their decision to keep the TRCC entact, but the money trail makes that argument hard to swallow.

Buyers should benefit if HUD can deliver on its promise to "de-link" builder incentives to affiliated service providers.  Builders have long claimed that the linking of such incentives streamlines the home buying process and provides a benefit for buyers  My experience as a broker contradicts such claims.  No matter how much builders would like to sell the idea to the public, the reality is that the conflict of interest generally prevails and buyers end up paying more than they need to.

The linking of incentives takes the transparency out of the process and creates opportunities for abuse.  When you take the competition out of the equation, it's easier for the affiliated service provider to skim a little extra profit out of the transaction.  Many times consumers are not even aware of their alternatives because their attention has been purposefully drawn to the builder incentive.

If you would like to contact HUD and encourage them to proceed with the new RESPA rule go to www.hud.gov.  The builders and lenders will have plenty of attorneys and lobbyists defending their claims.  Consumers need to voice their opinion if they want to see the changes implemented.

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

A weak U.S economy and falling energy prices continued to weigh on Houston area housing in December.  Sluggish sales and stagnant or falling prices spurred generous incentives from builders and more trouble for sellers of existing homes.  Confirmation of a U.S. recession and still tight credit markets caused many would-be buyers to wait it out.  The tight credit markets also swamped many deals in both the residential and commercial markets.  The commercial market in particular appears to be headed for a difficult year in 2009.

Katy area home sales continued to lag 2007 numbers, posting a second consecutive monthly price decline and sales that were off by some 20% compared to 2007 levels.  That being said, South Katy continued to post respectable sales numbers given the difficult market conditions.  North Katy also showed active sales in December as both buyers and investors were attracted to low-priced inventory.

2009 could bring a challenging market, but record low mortgage rates and stabilizing energy prices could mitigate any downturn.  Oil prices have attempted to rebound from recent lows, but it's still unclear if energy prices have bottomed.  Consumer confidence was at an all-time low in December, but an economic recovery would help to pull a number of would-be buyers off the fence.  For those who are in the market to buy a home and have the means to do so, 2009 could be a great time to go shopping. 

Continued... Download Jan 2009 Newsletter