Affordable Housing.

At the 2012 Keller Williams Family Reunion, Gary Keller, CEO of Keller Williams Realty International in his 2012 Vision Speech talked about how this is an historic time in the US real estate market. This isn't surprising news to those of us in the real estate industry, but it bears repeating since it is so striking. It has to do with housing affordability, which is at its lowest point since this statistic has been tracked. Think of this as a silver lining in the
housing market cloud. Historically, in the US, the average cost to own a home has been about 22.1% of an average family's income. It peaked in the 1980s at 36%. Today it is around 12.9% due to a combination of lower home prices and record low interest rates. What's interesting is that in 1989 when the average home cost $94,000, the principal and interest payment on that home was approximately $825. Interest rates were at 10%. In 2011 the average price of a home was $166,100 and the payment was only $837 because of the record low interest rate of 4.45%. Today in early 2012, rates are actually lower that 4.45% making that home even more affordable. However this will not last indefinitely. Many experts believe that both home prices and interest rates are at the bottom and have nowhere to go but up. An increase of 1% in interest rates is equivalent to a 10% increase in housing prices and a 1% rise in interest rates is far more likely than a 10% increase in home prices.  In other words, housing affordability is about as good as it is likely to get.

Is the real estate market making a comeback?

In Texas at least that seems to be the case.   The most recent release of the Texas Quarterly Housing Report shows that home sales in Texas were up 6% over the same period last year.  Pricing remains flat and inventory is going down.  All of this indicates that it is probably a good time to sell and/or a good time to buy.  As the market starts to come out of the doldrums prices will start to rise.  This sounds like good news for sellers, but not if you do a little analysis.  Most sellers are also buyers either upsizing or downsizing.  As prices rise these sellers may get more for their existing home but they will almost certainly pay more for their new home.  Statistically, most people buy homes that are 50% more expensive than the one that they sell.  So the increase in price on the purchase usually outweighs the gain on the sale of the existing home.  In addition, interest rates are at historic lows, although in a recent report Freddie Mac says it believes that rates have started to rise.  Time will tell for sure, but today there are great opportunities to buy a home.  Call the RozierTeam directly at 281-395-0680 and we’ll help you take advantage of the current market conditions. 

Blog Contribution by David Rozier-The RozierTeam

Broker Associate, MBA, ABR, CRS, GRI, SFR
Keller Williams Premier Realty Katy

Cheaper than Renting

You'll love the quaint cottage community of Lakeville. Where else can you find a home like this so affordable??? NO, it's not a foreclosure; it's just a great home for a great price. 4 BR, 2 ½ BA, 2 car alley entry garage, loft/gameroom, formal dining room. Fresh paint in many rooms, lush lawn, front porch, extended paver patio in your backyard. Walk to many stores or restaurants. Keller Williams Realty. FREE RECORDED INFO CALL 1-888-266-0724 CODE # 23 Click ROZIERTEAM to see the photos.  To see this home call the RozierTeam directly at 281-395-0680.