Aaron Layman's Katy Texas Real Estate Forum

Real Estate Symposium Highlights Strengths, Weakness In Katy, Houston Texas Housing Market

Yesterday's real estate symposium offered a glimpse of the Houston area housing market.  While some of the news was sobering, there were also positive signs for Houston real estate.

As Barton Smith noted in his presentation, more than a third of current pending home sales are foreclosures.  The weight of this statistic can be attributed to the large number of starter homes.  Sales on the lower end are expected to struggle into 2009, as more foreclosures work through the system.  Smith noted that a third of area sales during 2007 were made with 100 financing and he expects a lot of those to come back on the market as foreclosures.

While prices have declined on the lower end, the higher end of the market has experienced price gains.  Price gains on more expensive homes may slow as the foreclosures on the lower end trickle up.  When owners have a difficult time selling smaller existing homes that results in fewer available move-up buyers.

Katy is a prime example of the tale of two markets.  North Katy (North of I-10) has seen a large number of foreclosures, with an oversupply of starter homes.  Zip code 77449 has been hit particularly hard.  By contrast, South Katy has relatively few foreclosures and a much higher average sales price.

One positive sign for the market is that builders have been proactive in tightening their supply of homes.  Sales of new homes outpaced starts for the first quarter of 2008.  Moderate building activity should keep inventory in check and provide pricing support.

Smith also noted that Houston is likely to remain the fastest growing urban market in the country for the next few years.  This can be attributed to the surging energy market and the large number of jobs being added to the economy.

For more information about the Institute for Regional Forecasting and the annual real estate symposium you can visit www.uh.edu/irf.

For more information about real estate and mortgage issues in Katy or West Houston contact Aaron Layman.  He is a licensed real estate broker and mortgage broker.  You can contact him directly at 281-994-5190.  You can also visit him on the web at www.AaronLayman.com.

Election Year Politics And Mortgage Bailout Schemes Bad For Katy, Houston Area Homeowners

The pending mortgage bailout proposed by Rep. Barney Frank and Sen. Chris Dodd is just one more political fix that is doomed to failure.  Government has a poor record of correcting economic imbalances that would be better left to correct on their own.  When Congress starts tinkering with financial markets to compensate for previous mismanagement and oversight, all mortgage borrowers will pay the price.  The sub-prime pain that has already claimed millions of foreclosure victims has now spread throughout the capital markets, inflating the cost of borrowing for all homeowners.

Housing markets in many parts of the country are correcting for a reason; They need to come down to affordable levels.  Market bubbles do not last forever, and the borrowers, speculators and banks that made those risky loans should bear the brunt of the losses.  Giving mortgages to borrowers with FICO scores that were low enough to disqualify even most renters was a recipe for disaster.  The same can be said for mortgages made to investors who put down little if any of their own money.

Adding more bad loans to the FHA's already burdened portfolio will not help the problem.  The financial markets are already taxed.  Additional backing by the government will just mean more taxpayer expense.

William Wheaton, a professor with the MIT Center for Real Estate, advocates letting the housing crisis run its course.  He has also noted that many homeowners facing foreclosure would actually be better off renting in the current market than trying to refinance a bad mortgage.  This is an excellent point that few, if any, politicians are addressing because it is politically unpopular.  When MIT professors and Yale economists are telling you that the market needs to run its course, I would be inclined to listen.

The housing market is adjusting, and it will be painful for a lot of families, particularly those who had their hopes set on the dream of home ownership.  I'm a huge fan of home ownership, I just don't want to be forced to subsidize someone else's high-risk mortgage.  Sentiment appears to be growing against the housing bailout.  Sites like www.AngryRenter.com and www.NationalBubble.com are seeing plenty of traffic.  It will be interesting to see if anyone in Congress is listening.   

For more information about real estate and mortgage issues in Katy or West Houston contact Aaron Layman.  He is a licensed real estate broker and mortgage broker.  You can contact him directly at 281-994-5190.  You can also visit him on the web at www.AaronLayman.com.

Rising Oil Prices Stimulate Katy, Houston Area Real Estate Market

A recent CNNMoney article noted that Houston was one of the 6 best places to buy a home.  The article selected 6 metropolitan areas where home prices were the most likely to rise, or fall the least.  It should come as no surprise that Houston would make the list.  Rising energy prices mean more jobs in the Houston area.  With convenient access to the energy corridor, the Katy area is a likely destination for relocation.  Affordable home prices and excellent public schools are both available in the Katy area.

For more information about real estate and mortgage issues in Katy or West Houston contact Aaron Layman.  He is a licensed real estate broker and mortgage broker.  You can contact him directly at 281-994-5190.  You can also visit him on the web at www.AaronLayman.com.

Houston Area Housing Market Softens, But Cinco Ranch, Seven Meadows & Grand Lakes Home Sales Defy Trend

If you saw today's Houston Chronicle report detailing the softening area housing market, you noticed one important fact; All housing is local, and not all neighborhoods are alike.  This is an important factor because the Houston area MLS covers such a large geographic area.

Sales figures for the start of 2008 reflect a softening market.  Prices have also weakened in certain areas.  That is to be expected in a slowing market.  It is also important to look at those areas which are not falling, but rather showing healthy demand and price stability.  Areas inside the loop have shown surprising price gains this year, and many other areas continue to hold up well.

The master planned communities of Cinco Ranch, Seven Meadows and Grand Lakes have seen falling sales figures this year, but prices are still showing small gains.  Based on current data, February could even be stronger for sales in the area than last year.  You can check back in a few weeks for final numbers.

To see the complete article in the Houston Chronicle you can visit www.chron.com/realestate

For more information about real estate and mortgage issues in Katy or West Houston contact Aaron Layman.  He is a licensed real estate broker and mortgage broker.  You can contact him directly at 281-994-5190.  You can also visit him on the web at www.AaronLayman.com.

Newmark Homes Parent (Tousa) Files For Chapter 11 Bankruptcy Protection

Newmark Homes parent Tousa filed for bankruptcy protection Tuesday.   The nationwide housing downturn has caused Tousa to shed more than two thirds of its employees as sales fell roughly 50 percent last year.  Ironically Newmark has been a bright spot for Tousa.  Newmark Homes and Trophy Homes closed 1434 homes in the Houston area in 2007 according to Houston Chronicle's Nancy Sarnoff.

The recent fall in sales in the lower end of the market has affected Trophy's sales, but Tousa's primary problem stems from their over-weighted position in Florida which has been one of the nation's worst performing markets.  Newmark home buyers should not be affected in the short term as Tousa plans to continue building homes and maintain warranty programs.  You can view the the video press release by Houston division president Mike Moody at www.newmarkhomes.com

For more information about real estate and mortgage issues in Katy or West Houston contact Aaron Layman.  He is a licensed real estate broker and mortgage broker.  You can contact him directly at 281-994-5190.  You can also visit him on the web at www.AaronLayman.com.

Fed Cuts Rates to 4.5%, Oil Sets New Record, Dollar Sets New Low

The Federal Reserve cut short-term interest rates by another quarter of a point today, citing continued weakness in the housing sector and otherwise slower economic growth.  The move was largely anticipated by the broader market.

Crude oil approached $95 per barrel on the news of the rate cut.  A weaker U.S economy in general means a weaker U.S. dollar (The dollar also hit a new low today vs the euro) and thus higher oil prices.  If you are planning a trip abroad anytime soon, hang on to your wallet!  The situation doesn't look to improve much in the near term.

For more information about real estate and mortgage issues in Katy or West Houston contact Aaron Layman.  He is a licensed real estate broker and mortgage broker.  You can contact him directly at 281-994-5190.  You can also visit him on the web at www.AaronLayman.com.

Banks Using SIVs To Escape Bad Debt

Citigroup, Bank of America and J.P. Morgan Chase, and several other banks are tinkering with a superfund of over $300 billion in "Structured Investment Vehicles" to provide additional liquidity during the next six to nine months as many of their short term notes come due.  The problem stems from bets the banks made with short term debt issued to purchase other long-term assets, including many mortgage-backed securities.  Now that the assets are being written down in value, the banks are looking for a helping hand from anyone who will listen.

Just when we thought we had seen the last of the shell games, dummy corporations, and accounting tricks, the major players in the banking industry are reminding us of everything that went wrong at Enron.  SIVs are nothing more than a creative accounting trick.  As the banks cry foul, we should all keep in mind that the shareholders of these wonderful institutions should bare the brunt of their losses, not the general public.  When the shareholders of our nations biggest banks have to give up their dividends and/or take a hit on their investments, I'm pretty sure we will see more responsible management from the banks.

For more information about real estate and mortgage issues in Katy or West Houston contact Aaron Layman.  He is a licensed real estate broker and mortgage broker.  You can contact him directly at 281-994-5190.  You can also visit him on the web at www.AaronLayman.com.

Mortgage Resets Cause More Subprime Pain

October will be a painful month for many subprime note holders, with roughly $50 billion in adjustable rate mortgages scheduled to reset.  So far borrowers have had little success in negotiating better deals with their mortgage companies because investors are reluctant to give in and loan servicers are simply overwhelmed.  The foreclosure picture doesn't look to make a significant improvement until sometime in 2008.  A record $100 billion in ARMs will reset in March of 2008.

For more information about real estate and mortgage issues in Katy or West Houston contact Aaron Layman.  He is a licensed real estate broker and mortgage broker.  You can contact him directly at 281-994-5190.  You can also visit him on the web at www.AaronLayman.com.

Houston Poised For Real Estate Growth

As home prices fall in many of the major metropolitan areas of the U.S., Houston is poised for further future growth in the real estate market.  A recent Business 2.0 study included Houston as one of the 10 cities ready to bounce back from the recent downtrend.

The study noted the strong employment picture in the area as well as the major expansion of Houston's medical center as reasons for the optimism.  The study projects increasing demand inside the loop as more professionals look to take up residence in new houses that are replacing older, smaller dwellings.

While the pace of job growth has slowed in recent months, the economy as a whole still looks positive in the Houston area.  The strong energy industry and increased diversification overall has enabled the Houston economy to outpace national growth.  That's good news for the Houston real estate market!

To view the complete article and all 10 listed, visit this link:

http://money.cnn.com/galleries/2007/biz2/0709/gallery.boom_towns.biz2/index.html

For more information about real estate and mortgage issues in Katy or West Houston contact Aaron Layman.  He is a licensed real estate broker and mortgage broker.  You can contact him directly at 281-994-5190.  You can also visit him on the web at www.AaronLayman.com.

Mortgage Issues Put The Brakes On Lower End of Houston Market

Mortgage issues continue to put a damper on the lower end of the Houston Area real estate market.  As reported by Nancy Sarnoff of the Houston Chronicle, the bottom end of market ($80,000 - $150,000) saw a 13% drop in August sales compared to last year.  The number of listings also increased by 16%.

The higher end of the Houston market continues to show strong sales.  Sarnoff reports that sales of homes costing more than $500,000 saw a 26% increase in August.  This is similar to activity in the South Katy area where we have a higher average sales price.

The fact that the Houston Area is still producing new jobs should act as a buffer in the current market.  It will be some time, however, before the mortgage problems fully correct themselves.  The lower end of the market will continue to be challenging.

For more information about real estate and mortgage issues in Katy or West Houston contact Aaron Layman.  He is a licensed real estate broker and mortgage broker.  You can contact him directly at 281-994-5190.  You can also visit him on the web at www.AaronLayman.com.