As expected, the November housing numbers in Texas returned with some disappointing news. Sales in the Lone Star State dropped an average of 32.9% from the previous year, with the average months on the market for a home checking in at 6.8. The four biggest housing markets produced the following figures; Houston – 32.1%/6.3; Dallas – 32.7%/6.3; San Antonio – 33.1%/8; Austin – 39.8%/5.7.
Despite the downturn, Texas continues to maintain its status as one of the most attractive real estate markets nationwide. In fact, Forbes Magazine ranks San Antonio as America’s third best, long-term housing city. The link to the article is provided HERE.
A strong economy and housing prices that were never over-inflated are the main ingredients for the Alamo city’s positive outlook. Texas markets consistently show up on the lists of most affordable places to purchase a home. Excess inventory, coupled with bargain sales prices and low interest rates make for an extremely favorable purchasing environment. If you subscribe to the “timing is everything” theory, then there’s no time like the present.
Pocketbook reality is producing a huge hurdle for most potential home buyers. A good rule of thumb for a purchase is to allocate roughly 28% of one’s pre-tax income towards a mortgage, taxes and insurance. If the bank account is pretty thin, and the ratios are high, trepidation sets in. Will we see increased strength in these areas? The massive Fed intervention in the form of bailouts and rates are producing mixed results. Consumer confidence is still shaky. The short-term outlook may be appealing, but there are many experts predicting an economy that will only get worse – thanks to government intervention.
We have discussed the unintended consequences of good intentions many times in previous posts. Reality currently provides these small real estate comforts; 1) Comparatively, our Texas real estate market is better yours; 2) Comparatvely, our Texas economy is better than yours; 3) The timing for considering a purchase or refinance is excellent.
Will it get worse before it gets better, or will we continue to witness slow, incremental improvement? Either way, Texas is well suited to weather the storm better than anyone else. It may not be comfortable and the opportunities may be sporadic – just be glad we live here and not in another state.
Interest rate information available HERE. Purchase information available HERE and refinance information available HERE.
Greg Matson – Vice-President
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