An Ongoing Eventuality
The Dallas Morning News reports from Texas. “North Texas’ hot summer housing market racked up more big gains in August. Real estate agents last month sold 10,223 preowned single-family homes through their multiple listing service. It was the third month in a row that resales in North Texas topped 10,000 — a new record. ‘Everything we are hearing from the Realtors and the builders is the demand remains very strong,’ said housing analyst David Brown with Metrostudy Inc. ‘A lot of times when a home is formally listed for sale it’s already under contract. One reason the resale market is staying so strong is the new home market is getting so expensive. The median price of new homes is pushing toward the $300,000 level.’”
From D Magazine. “There was an interesting article in Monday’s Dallas Morning News that seemed to unintentionally make a case against the suburbs even though it was optimistic with regards to reporting on the suburbs’ success. The story is about the little town of Prosper, just north of Frisco. Reading about Prosper, which sits almost exactly halfway between downtown Dallas and the Red River, about 42 miles from each, makes our whole style of growth sound a bit like a massive pyramid scheme. The article makes clear that entire system is contingent on road expansion that hooks cheap and available raw land up to the economic engine. But can that kind of growth go on forever?”
“Maybe the answer is actually in the article, offered by a major Collin County landowner who is bullish about new developments. [Rex] Glendenning, the Celina land broker and third-generation rancher in northern Collin County, sees almost limitless possibilities. ‘The market seems to be stable and growth and population trends are going in the right direction,’ he said. ‘I think where we are today in North Texas, especially in North Dallas, we’re going to see the same kind of growth California experienced in the ’60s, ’70s and into the ’80s.’”
The Houston Chronicle. “Like much of the rest of Houston, the Katy area has been dealing with a slowdown in home sales and new housing starts this year. As oil and gas companies announced more layoffs over the summer, the volatility has impacted the housing market in an area closely tied to the energy industry. ‘This has been an ongoing eventuality,’ said Aaron Layman, a Realtor in Katy who said he was not surprised. ‘Probably right around January or February is when we really started to see it hit,’ he said of communities around Katy and west Houston.”
“Christi Borden, a Realtor with Better Homes and Gardens Real Estate Gary Greene, said she’s seen the slowdown affect clients. ‘You’ve got buyers and sellers who just don’t know what’s going to happen tomorrow,’ she said. ‘I think a lot of them are very reticent. I just walked out of a home of clients who want to buy a larger home, and I said we may want to wait until January just to see how this plays out.’”
“‘We’re seeing a lot of new stuff coming,’ said Borden of planned developments like Cane Island, but she said builders seem to be holding off. ‘I don’t see any speculative houses,’ she said. Still, she said, ‘There’s so many choices for a buyer that they didn’t have last year in August. I would say the majority of my clients are involved in the industry. I have two sons involved in the industry. My husband works for petrochemical and speaking to a lot of folks, it’s not going to end yet,’ Borden said. ‘It’s going to be ongoing. We need to be prepared for it.’”
From 740 KTRH. “The years-long real estate boom in Houston may finally be coming to an end, according to some new figures. While earlier reports suggested Houston’s real estate market was withstanding the oil decline, the effects are now starting to show. ‘I’m seeing not only new construction not being bought up, but I’m seeing a slowdown in the resale market,’ says Michael Weaster, realtor with Xcel Properties in Houston. ‘There are more houses coming on the market, and I see prices either stabilizing or coming down…I’m having trouble getting some of my listings sold.’”
“Weaster says it was only matter of time before all of the recent layoffs in the energy industry brought on by the drop in oil prices started to trickle down to housing. ‘It’s got to mean something when Chevron announces all these layoffs, Shell announces all these layoffs in the energy business—these jobs are not replaceable.’ And with the price of oil showing no indication of a significant increase anytime soon, Weaster predicts home sales and prices will continue to decline in Houston for the near future. ‘They say Houston isn’t tied to oil as much as it was in the 80s, but that just isn’t true in my opinion,’ he says.”
From The Paper. “With property listings fluctuating as wildly as the New York Stock Exchange, the temptation for those wishing to sell their homes to act rashly might prove too strong. However, according to a real estate expert who has a talent for deciphering trends, homeowners in The Woodlands area should take note that, a new real estate crisis is on its way, common sense and prudence could save them untold grief and money. ‘It’s not like the tremendous crash that occurred in 2008,’ said area Realtor Kimberly Nicole. ‘But it’s not the time to sell. Not yet.’”
“A housing bubble, Nicole explains, is essentially supply in the real estate market outstripping demand. This has to do with fluctuations of the type that have been particularly seen in the oil industry, where builders built homes without enough people to live in them. ‘We have abundance of inventory,’ she said. ‘And due to layoffs, and the oil prices going down, there are not enough buyers.’”
“‘If homeowners don’t have to sell, don’t do it,’ she said. ‘You don’t lose money on an investment you don’t sell. It’s a buyer’s market being affected by the oil prices going down, and because it’s an election year. When that happens, interest rates increase, and now we have more inventory than buyers.’”
“You’re not going to get top dollar for your home right now. If you try to sell it at a higher price point, it’s not going to sell, and will simply add to a flooded market. But you can still come out on top. You can get more than you did six months ago, and the market’s recovering, but if you absolutely need to sell, sell it quick. Don’t go with an agent that will list the property at whatever price you say. It will flood the market. Most homes that sit on the market for a while, have already had a dramatic price reduction, and this will put the seller upside down.’”
