During 2009 there were six homes that sold in Cornerstone Place with an approximate average sale price of $175,000. The six homes that sold in our neighborhood in 2009 were a whopping two thirds less that the 18 homes that sold in 2008, but with a slightly higher sales price, up from $173,000. The chart below shows the historical average sales price in Cornerstone Place since 1997. The low number of homes sold in our neighborhood in 2009 is not surprising given the fact that 2009 was an extremely difficult year for the U.S. economy in general. Unemployment in this country reached staggering levels while those who still had jobs worried about losing them.
However, it seems that the outlook is improving somewhat. While I am not ready to declare that what many are calling “The Great Recession” to be completely over, it does seem that many are starting to emerge from their hiding places with renewed determination to move on with their lives. I read an article, (I can’t remember where) that said that people are tired of being scared and are just deciding that they are not going to be anymore. Economic activity seems to be on the rise, including in the real estate segment of the economy. To me this seems to be a testament to the optimistic spirit of the American people. You just can’t keep them down for long. It seems like we are trying to claw our way out of the recession despite all odds.
MLS area 36 (Katy south of 1-10) saw a 1.5% increase in the number of home sold in 2009 over 2008 with a 2.5% increase in the average sales price. That is also another indicator that things aren’t as bad as they seem to be.
I recently saw a study 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 on the list. Since it focused on things like market stability, foreclosure rates and inventory to determine the list, I wondered how we fit in. 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”, a bottom feeding mentality. While there are definitely some opportunities like that out there, that doesn’t seem like a healthy, sustainable market to me. The other way to look at a market 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 numbers 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. That is an incredible number when you consider that the 40 year average is over 21%. 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. 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.
So to answer our opening question it appears that 2009 wasn’t all that bad in our little corner of Katy. Cornerstone Place is a great place to live.
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