I saw a new study today on Forbes.com that ranked the top 10 cities in the US for buying homes. Of course I was looking to see where Houston ranked in the list. Since it focused on things like market stability, foreclosure rates and inventory to determine the list, I wondered how we fit in. I suppose there are two ways to look at a housing market. One would be “can I get a home for a steal because the foreclosure rate is so high”. You know, sort of a bottom feeding mentality. The other would be “is there a fundamentally sound home buying market, and are there good opportunities to purchase affordably priced homes”. The Forbes study focused on the latter as a basis to determine their list. In this type of analysis Houston ranked number 3. Dallas/Ft. Worth and Austin were also on the list at number 9 and 10 respectively. That’s not bad, if you ask me, particularly since I live in Houston and I own a home. We know that homes are more affordable than they have been in decades thanks to low home prices and bottom-of-the-barrel scrapping interest rates. In fact according to the National Association of REALTORS® (NAR) the payment on the median home is only 15% of median home buyer’s income as of the end of 2009. I don’t think it has ever been that low. If you combine that with the soon-expiring tax credits for home buyers then it’s probably never been a better time to buy a home. And according to Forbes.com, Houston is the 3rd best city in the US in which to buy that home.
But nothing lasts forever. Part of the reason Forbes.com ranked these cities as good places to buy homes is because of rising home prices. After all, who wants to buy a home that is going to decrease in value? Combine that with the expectation of rising interest rates and the best opportunities to own a home may soon be coming to an end. There is a saying among real estate investors that you “make your money when you buy.” Now might be the best time in our lifetimes to do that as homeowner. Most people wait for the bottom of the market to buy and miss the opportunity because unfortunately the bottom is almost always viewed in the rearview mirror.
(Photo of the Houston skyline during the Power of Houston event from the City of Houston Website).
