As a lot of you know the annual NFL college draft was last weekend. Prior to the draft almost all sports writers published a mock draft. In some cases they published several versions changing them on an almost daily basis. From the mock drafts I read and the actual draft results I saw, few if any of the writers were correct in their guesses. It will probably be the same with this blog today. I am going to "mock draft" the April single family residence sales numbers for Montgomery County, Texas about three weeks before they actually come out. I can't figure out if I am being brave or just not so smart in doing this. Drop me an email and let me know what you think. Here we go.
I think the bottom has been hit. Yes we will probably be down from the sales numbers of April, 2007 but I also believe that at least two of the MLS areas in the county will be up over March, 2008, one area will come close to the March, 2008 numbers and that the fourth will still be down some but not hugely. I think that the average sales price will be somewhat stagnant as compared to the increases we have seen in the past. This price stagnation is not bad or indicative of a major trend in my opinion but only reflects the current market situation.
With the school year approaching its' end, our warm lake water weather here and interest rates still very low I think we will see our sales numbers improving. Okay, please remember this is a "mock draft" only. When the final April numbers are published in about three weeks I will grade myself just as the sports writers grade the NFL teams. Hopefully I will do better than the "C" one well known Houston sports writer gave our beloved Houston Texans.
I hope you are having a great week.
Ron
Wednesday, April 30, 2008
Monday, April 28, 2008
Mortgages/Credit Scores/PMI
I would like to address the current state of mortgages today. I spent several hours last week talking with a few loan officers and getting their opinions about what is going on in the market.
These loan officers told me that interest rates have gone up recently and that credit requirements are still fairly tight. Interest rates are still very good but have increased at least half-a-point in the last week. This may continue for a little while. If you are shopping for that home now please consider locking in your rate today.
What about credit scores? Well if you don't have at least a 620 mid credit score you can forget about a mortgage at this time. If you have a credit score between 620 and 680 you had better have 5% to 10% down payment available. You can go FHA which has some good programs available requiring less of a down payment. Please do not discount the FHA route. They have some great interest rates available.
If your credit score is between 680 and 720 you probably can get a conventional loan. Can you get by with no down payment in this credit score range? Possibly, but it depends on your overall financial condition, debt to income ratio etc.
If you have a credit score of 720 and above you are in great shape. Your options increase when your score is above that magic number. You have a chance of avoiding PMI when your score is in this area.
What about PMI? You are required to pay PMI unless your loan amount is less than 80% loan to value. PMI rates today range anywhere between .28% and .78%. What does that mean in real dollars? A bunch of money. With a PMI rate of .5% on a $150,000 loan your monthly PMI charge would be $62.50. $750 a year for PMI. That will by a lot of kid's clothes. If you figure you are going to live in that house for ten years your total PMI charge would be $7,500. That is a lot of money!!
Even if you are not thinking of buying for six months to a year it would be a good idea to go to work on increasing your credit score today. Do you think that is something you can do yourself? You may want to stop and think about that first. If you want to start but aren't sure how please consider giving me a call. I have a solution that can and will help.
I hope you are having a great Monday. Beautiful weather today.
Ron
These loan officers told me that interest rates have gone up recently and that credit requirements are still fairly tight. Interest rates are still very good but have increased at least half-a-point in the last week. This may continue for a little while. If you are shopping for that home now please consider locking in your rate today.
What about credit scores? Well if you don't have at least a 620 mid credit score you can forget about a mortgage at this time. If you have a credit score between 620 and 680 you had better have 5% to 10% down payment available. You can go FHA which has some good programs available requiring less of a down payment. Please do not discount the FHA route. They have some great interest rates available.
If your credit score is between 680 and 720 you probably can get a conventional loan. Can you get by with no down payment in this credit score range? Possibly, but it depends on your overall financial condition, debt to income ratio etc.
If you have a credit score of 720 and above you are in great shape. Your options increase when your score is above that magic number. You have a chance of avoiding PMI when your score is in this area.
What about PMI? You are required to pay PMI unless your loan amount is less than 80% loan to value. PMI rates today range anywhere between .28% and .78%. What does that mean in real dollars? A bunch of money. With a PMI rate of .5% on a $150,000 loan your monthly PMI charge would be $62.50. $750 a year for PMI. That will by a lot of kid's clothes. If you figure you are going to live in that house for ten years your total PMI charge would be $7,500. That is a lot of money!!
Even if you are not thinking of buying for six months to a year it would be a good idea to go to work on increasing your credit score today. Do you think that is something you can do yourself? You may want to stop and think about that first. If you want to start but aren't sure how please consider giving me a call. I have a solution that can and will help.
I hope you are having a great Monday. Beautiful weather today.
Ron
Friday, April 25, 2008
Charity
Today I have to let you know about two great charity events Keller Williams - Conroe is getting ready to host. On May 19, 2008 we will be hosting our second annual Realtor Helping Realtor golf tournament. The event will be held at River Plantation Golf Club. The event includes an 18 hole golf scramble, silent auction and dinner. Last year this event raised over $40,000 for a local realtor needing assistance with a family medical situation. We hope to surpass that amount this year. If you are interested in playing or donating to the silent auction please drop me an email or give me a call.
On Saturday, May 3rd we are having our annual Garage Sale. This will be held at our office at 2200 N. FM 3083 W. from 9:00AM until 2:00PM. We will also be offering free document shredding. If you have items you would like to donate please let me know. All proceeds from this event go to our KW Cares charity.
Have a great weekend and please stop by the open house at 2505 Amy Lee Dr. on Saturday from 2:00PM - 4:00PM.
Ron
On Saturday, May 3rd we are having our annual Garage Sale. This will be held at our office at 2200 N. FM 3083 W. from 9:00AM until 2:00PM. We will also be offering free document shredding. If you have items you would like to donate please let me know. All proceeds from this event go to our KW Cares charity.
Have a great weekend and please stop by the open house at 2505 Amy Lee Dr. on Saturday from 2:00PM - 4:00PM.
Ron
Thursday, April 24, 2008
Special - Thursday
Interest have been rising this week. I was told today that loans last week that were at 5.75% are now at 6.00%. 10 year Treasuries were down today so we may see more rate increases. Please don't wait to lock in your rate today.
If you are a resident of Montgomery County you have probably received your new tax appraisal in the mail. Please take a close look at this. I have received several calls from friends and clients who have been shocked at the amount of the increase in the appraised value of their home. In case you can't find your appraisal the Montgomery County Appraisal District website is www.mcad-tx.org Records are available there.
If you are a resident of Montgomery County you have probably received your new tax appraisal in the mail. Please take a close look at this. I have received several calls from friends and clients who have been shocked at the amount of the increase in the appraised value of their home. In case you can't find your appraisal the Montgomery County Appraisal District website is www.mcad-tx.org Records are available there.
Wednesday, April 23, 2008
I learned my first lesson on blogging. Never promise to do a blog three times a week and then get sick. Sorry but I was down and out with a cold/flu. A real bummer with this great spring weather.
We were going to talk about the price volatility index and the price appreciation index. I could give you the long technical explanation but I really do not want to put you to sleep. Believe me it would. If you want the technical explanation drop me an email and I will send it to you. Suffice to say that they are indexes calculated from recent data (from two previous quarters to five years) to predict how prices will react in the near term future (two years out). The predictions for the Houston-Sugar Land-Baytown MSA are good. They show no disasters on the horizon. Price acceleration shows some signs of slowing but the good news is that price volatility is very close to stable. No wild downward price crashes similar to what has happened in Florida, California and Arizona are expected.
So what is keeping people from buying? They only thing I can think of is gas prices, the news media, fear itself and of course credit scores below 620. Interest rates are experiencing the normal weekly up and down swings but are still very low. FHA is offering some great programs for buyers with minimal down payments. They are very good deals with low interest rates. And if you have a credit score below 620 those problems can be addressed also. Just drop me an email if you would like to know more about that.
Now that I am well again and have experienced my once-a-year illness I will be getting these out three times a week.
Have a great day.
Ron
We were going to talk about the price volatility index and the price appreciation index. I could give you the long technical explanation but I really do not want to put you to sleep. Believe me it would. If you want the technical explanation drop me an email and I will send it to you. Suffice to say that they are indexes calculated from recent data (from two previous quarters to five years) to predict how prices will react in the near term future (two years out). The predictions for the Houston-Sugar Land-Baytown MSA are good. They show no disasters on the horizon. Price acceleration shows some signs of slowing but the good news is that price volatility is very close to stable. No wild downward price crashes similar to what has happened in Florida, California and Arizona are expected.
So what is keeping people from buying? They only thing I can think of is gas prices, the news media, fear itself and of course credit scores below 620. Interest rates are experiencing the normal weekly up and down swings but are still very low. FHA is offering some great programs for buyers with minimal down payments. They are very good deals with low interest rates. And if you have a credit score below 620 those problems can be addressed also. Just drop me an email if you would like to know more about that.
Now that I am well again and have experienced my once-a-year illness I will be getting these out three times a week.
Have a great day.
Ron
Monday, April 14, 2008
Prices
With what we have all read about the housing market over the last year I would bet that at times we have all wondered what the future holds for the value of our homes. Although my crystal ball is currently broken and even when it wasn't broken it didn't work all that well there is no way of knowing what the future holds. There is data available though to give us a glimpse of what might happen in the future.
PMI Mortgage Insurance Co. publishes a wealth of data. One of the statistics they calculate is the U.S. Market Risk Index score (SM of PMI Mortgage Insurance Co.). This score translates to a percentage that predicts the probability that house prices will be lower in two years. For example, a Risk Index score of 100 means there is a 100 percent chance that the OFHEO (Office of Federal Housing Enterprise Oversight) All Transactions House Price Index for that MSA (Metropolitan Statistical Area) will be lower two years from the date of the data. Sorry for all of the initials but you know the government.
How did the Houston-Sugar Land-Baytown MSA area rate? In both the third and fourth quarters of 2007 this index showed less than 1%. That in my opinion is great news. Of the top 50 housing markets in the US only thirteen showed an index of 1% or less for these two quarters and five of those thirteen markets were in Texas. Good news for us and our state.
Now you are probably saying "great my home won't decrease in value but will it increase?". We will address price volatility and appreciation later this week.
Hopefully by making you aware of this data I can make you a better educated real estate consumer. It is all not doom and gloom, especially in Texas.
I hope you had a great weekend and will have a great work week.
Ron
PMI Mortgage Insurance Co. publishes a wealth of data. One of the statistics they calculate is the U.S. Market Risk Index score (SM of PMI Mortgage Insurance Co.). This score translates to a percentage that predicts the probability that house prices will be lower in two years. For example, a Risk Index score of 100 means there is a 100 percent chance that the OFHEO (Office of Federal Housing Enterprise Oversight) All Transactions House Price Index for that MSA (Metropolitan Statistical Area) will be lower two years from the date of the data. Sorry for all of the initials but you know the government.
How did the Houston-Sugar Land-Baytown MSA area rate? In both the third and fourth quarters of 2007 this index showed less than 1%. That in my opinion is great news. Of the top 50 housing markets in the US only thirteen showed an index of 1% or less for these two quarters and five of those thirteen markets were in Texas. Good news for us and our state.
Now you are probably saying "great my home won't decrease in value but will it increase?". We will address price volatility and appreciation later this week.
Hopefully by making you aware of this data I can make you a better educated real estate consumer. It is all not doom and gloom, especially in Texas.
I hope you had a great weekend and will have a great work week.
Ron
Friday, April 11, 2008
2007 vs 2006
How did real estate sales in Montgomery County do in 2007 vs 2006? Not as bad as the rest of the country. For the purposes of this blog I will concentrate on single family residential unit sales. Yes, unit sales for this segment of the real estate industry were down in Montgomery County in 2007 vs 2006. County wide sales were down 4.15%. All four MLS areas comprising Montgomery were down. MLS area 39 was down the most, suffering a decline of 5.52%. MLS area 40 was down the least with a decline of only about one-third of one percent. Yet even with this decline, sales for 2007 were the second best on record. They were better than 2005.
How did average sales prices do? They went up. Even with a decline in sales the average sales price in each MLS area increased. And, get this, the average days on the market decreased also.
Amazing....sales decrease yet prices increase and days on the market decrease. Not exactly what is being portrayed by the national media.
Please remember that all real estate is local. What is happening in another part of the country is not necessarily happening here. In fact if you take a look at the top fifty markets in the US the Houston-Sugarland-Baytown MSA has a Risk Rank of 5 (the best ranking) and a Risk Index of <1 as published by PMI Mortgage Insurance Co. (More on what these mean next week.) These are great numbers for this areas real estate market.
Remember that Winston Churchill said "All we have to fear is fear itself". Is fear keeping you out of the real estate market right now? When you look at the numbers presented above is that fear really justified? Please make your decision based on local facts and not what the "bad news networks" are saying.
If you would like more information please send me an email. The weather looks great for this weekend so please have a great one. Cruise some neighborhoods, look at some homes and give me a call.
Ron
How did average sales prices do? They went up. Even with a decline in sales the average sales price in each MLS area increased. And, get this, the average days on the market decreased also.
Amazing....sales decrease yet prices increase and days on the market decrease. Not exactly what is being portrayed by the national media.
Please remember that all real estate is local. What is happening in another part of the country is not necessarily happening here. In fact if you take a look at the top fifty markets in the US the Houston-Sugarland-Baytown MSA has a Risk Rank of 5 (the best ranking) and a Risk Index of <1 as published by PMI Mortgage Insurance Co. (More on what these mean next week.) These are great numbers for this areas real estate market.
Remember that Winston Churchill said "All we have to fear is fear itself". Is fear keeping you out of the real estate market right now? When you look at the numbers presented above is that fear really justified? Please make your decision based on local facts and not what the "bad news networks" are saying.
If you would like more information please send me an email. The weather looks great for this weekend so please have a great one. Cruise some neighborhoods, look at some homes and give me a call.
Ron
Thursday, April 10, 2008
Day One
Okay here we go. My first shot at blogging and providing you with good information about real estate through this media. Who knows maybe the great American novel will be next. I will be covering the Lake Conroe, Conroe and Montgomery County areas. For those of you who don't know those areas they are just north of Houston. I will be attempting to provide you with up-to-date information on what is going on in the real estate market in these areas.
I will probably start with some basic information and education on the value of your home and what you might expect in the future. This may take a few days but I think will be well worth the effort.
My first piece of advice is if you are considering buying waterfront property on Lake Conroe do not wait long to make an offer. Properly priced property on the lake is moving very fast. Most of these listings are only lasting a few days. Give me a call and we will go take a look!
Interest rates? Low! Imagine 30 years at today's low interest rates. You can't beat'em.
If you have any questions or subjects on which you might like information please send me an email. My contact information is displayed lower on the page. Take a look at the cool SCUBA pictures if you get a chance too.
Have a great day and see you tomorrow.
Ron
I will probably start with some basic information and education on the value of your home and what you might expect in the future. This may take a few days but I think will be well worth the effort.
My first piece of advice is if you are considering buying waterfront property on Lake Conroe do not wait long to make an offer. Properly priced property on the lake is moving very fast. Most of these listings are only lasting a few days. Give me a call and we will go take a look!
Interest rates? Low! Imagine 30 years at today's low interest rates. You can't beat'em.
If you have any questions or subjects on which you might like information please send me an email. My contact information is displayed lower on the page. Take a look at the cool SCUBA pictures if you get a chance too.
Have a great day and see you tomorrow.
Ron
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