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Houston real estate expert shares 5 tips for first-time buyers

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As practically everyone who currently lives in Houston knows, this real estate market is one of the hottest in the country.

In what is referred to as the “purchase bonanza,” homes are for sale across the area, which could lead renters to think it’s time to jump on the ladder of home ownership.

Not so fast.

First-time buyers face real pitfalls. Jeremiah Jackson, Houston market retail sales director for real estate powerhouse Orchard, shares his advice on common mistakes to avoid when buying that first home to CultureMap.

Finance first

“Get educated and trained early on,” Jackson told CultureMap.

It may sound obvious, but funding is the foundation of the buying experience. Knowing what a bank approves, how a buyer’s savings match other funding options, and where to see what’s available can save you tons of headaches later.

“Develop a relationship with a mortgage broker and let them tell you about the types of products,” he says. “A realtor actually goes to a number of different companies so they can get the best prices. You can check out all of the current programs and help you educate yourself. I would also say do some self-education too. You can go to the FHA – Check the website to see what types of loans they are repaying. “

With funding in place, buyers can better understand what they can and can’t afford, which helps them focus their options.

Understand the market

According to Jackson, one of the biggest mistakes first time buyers make right now is misunderstanding the current Houston real estate market.

“The current situation is that 34 percent of homes are selling at or above list prices,” he says. “So if you want to get an offer on a house, you have to be aware that there are no deals right now, to be clear. It’s, we go strong and we go up and we pay for a majority, if not all Closing costs to get a good property. “

It’s not just Houston, he notes. It’s the same across the country. The housing stock has just gone down, which means there aren’t enough houses for people to want to buy. And while Houston has a slightly larger inventory than other cities, according to Jackson, the housing stock available here is also appalling.

“Combine that with interest rates so low that it’s exactly what the market is like right now. It’s the craziest thing there has been in about 30 years,” he says.

That means purchases should expect to pay more for homes, whether they are resale homes or new builds. Jackson says his company is working with buyers to give them some leeway to submit an offer.

“We look at your funding, your pre-approval, your budget, and start at the low end. If you’ve got a $ 400,000 permit, that’s your maximum. So we’re going to look at homes in the 320s. The $ 330s so you have this side and we can go on that cap if we need to. “

Get the right broker

Many buyers may not realize that the right broker can make all the difference. Jackson advises first-time buyers not to be afraid to interview several before deciding who will suit them best.

Buying a home can be a stressful experience, and a realtor who is able to guide buyers through the home can reduce the anxious moments that might lie ahead. He says buyers should be careful how they click with an agent because personality is a big part of it.

If a buyer’s style is only business, they might not want a broker who is super casual. If a buyer wants a lot of manual labor, a real estate agent who seems cool and aloof may not fit in. And don’t be afraid to create expectations at the beginning of the process.

“”[You can say] “Here’s our communication expectation,” he offers. “We asked a question and we need an answer within 15 minutes.”

Neighborhood knowledge is crucial

Another important factor in finding the right agent: get one who specializes in a specific neighborhood. Houston is obviously a huge subway area, and Houstoners know there’s a huge difference between Clear Lake and Garden Oaks.

Jackson says having a realtor who understands the neighborhood is important as he or she not only knows about the homes currently for sale, but also the history of the area in terms of the quantities homes are being sold for as well as how the neighborhood has grown or changed over time.

Neighborhood knowledge is also useful when it comes to restaurants, grocery stores, or other establishments. Much of this can be found in an online search, but a realtor who is involved with the community will have specific examples to help buyers visualize themselves in a particular geographic area.

Homework, homework, homework

Many buyers, especially those first time home buying, could find the process overwhelmed. And while a great real estate agent can help, Jackson wants buyers to know they have responsibilities too.

“It’s easy to work with as a buyer,” he says. “Have your must-haves, but be easy to use and understand that there will be concessions instead of a hard line. Because if you take a hard line and are not willing to give, it will . ” Translate to the listing agent and say, “I don’t know if we’re going to close because these people are unreasonable.”

He encourages buyers to have conversations early in the buying process, whether as a family, partner, or spouse, about what they want in a home.

Some new home buyers, he says, aren’t sure what to look for. There they can use the good agent they have chosen to guide them through what they really want in a home, neighborhood and their list of must-haves versus nice-to-haves in their new home .

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Inflation forces homebuilders to take it slow, raise prices | Real Estate

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LOS ANGELES – Even in the hottest US housing market in more than a decade, new home construction has become a frustratingly unsafe and costly endeavor for many home builders.

Rising costs and a shortage of building materials and labor are making themselves felt in the housing industry, which accounted for nearly 12 percent of all US home sales in July. Construction delays are common, leading many home builders to slow down the number of new homes they offer for sale. When a new home becomes more expensive to build, some of these costs are passed on to buyers.

Across the economy, prices have skyrocketed this year due to the shortage of manufactured goods and components, from automobiles and computer chips to paint and building materials.

The home builder restrictions are not welcome news for home buyers as they are already facing historically low levels of resale in the market and record prices. Economists fear that many first-time home buyers will be pushed out of the market. The affordability of affordability is one reason the pace of home sales has slowed in recent months.

At Sivage Homes in Albuquerque, efforts by builders to keep the construction schedule on schedule are undermined almost daily by delays in plumbing fixtures and windows to bathtubs and appliances.

“These days we could literally wait 30 days, maybe even 60 days for one thing or the other,” said CEO Mike Sivage. “I’ve been doing this since 1986 and I have to say that I’ve never seen anything like it before.”

The pandemic set the stage for higher prices and shortages in construction products. The factories have been temporarily shut down and are now trying to catch up with production, while demand has increased due to an unexpectedly hot housing market and an increase in home conversions.

Wood futures jumped to an all-time high of $ 1,670 per thousand board-feet in May. Since then, they have fallen to $ 634, about 10 percent higher than a year ago. Still, wholesale prices for a category of home building components that include windows, tiles, doors, and steel rose 22 percent in the past 12 months, according to an analysis of Labor Department data conducted by the National Association of Home Builders. Before 2020, it was typical for such total prices to increase a little more than 1 percent annually.

These conditions are likely to remain. Robert Dietz, chief economist at NAHB, said he had heard from builders that “there are ongoing and in some cases growing challenges” with floors and other building materials.

Meanwhile, the lumber savings have yet to be rolled over to many construction companies, including Thomas James Homes, which operates in California, Washington state, and Colorado.

“The price we pay for lumber today is the same price we paid before 90 or 120,” said Jon Tattersall, the construction company’s president, who found his company’s total construction costs have increased about 30 percent since November .

Home buyers should also not expect discounts from falling timber prices, as home builders set their prices largely based on overall demand in the housing market.

A signed contract for a house yet to be built usually includes a grant to cover unexpected construction costs, but generally, builders have to accept large increases and then pass them on to the next buyer.

“We have to increase the cost of our future ones,” said Tattersall.

Higher building material prices aren’t the only factor driving up building costs. The chronic shortage of skilled workers in the construction industry has worsened during the pandemic and forced building owners to factor in higher labor costs.

Inflation is being felt across the economy. Consumer prices rose 5.3 percent in August compared to the same month last year. At the producer level, inflation rose even steeper by 8.3 percent, the largest annual increase since records began.

The Federal Reserve expects the rise in inflation to be temporary. For the time being, however, the rising costs of building materials and the continuing shortage of supply are making everything from house to apartment to commercial building more expensive.

To cope with that, many builders are slowing down the introduction of new homes. Zonda Economics, a real estate data tracker, estimates that around 85 percent of home builders are intentionally limiting their sales.

“They’re trying to make sure they have the land ready, the workers ready, and the materials ready to actually sell the houses that have been sold,” said Ali Wolf, Zonda’s chief economist.

Even with inflation, builders benefit from the hottest housing market for years. Demand for new homes has increased while the number of pre-occupied US homes for sale has plummeted to all-time lows, driving prices higher.

The average price of a new home sold in July rose 18.4 percent year over year to $ 390,500, an all-time high, according to the Commerce Department. For existing homes, the average price rose 17.8 percent to $ 359,900 in July, according to the National Association of Realtors.

Builders typically hire contractors to handle framing, electrical, plumbing, and other aspects of the construction. As these firms faced higher costs to find skilled workers or to obtain the materials they need to do their jobs, they had to pass those increases on to construction companies.

Tri Pointe Homes, which builds homes in 10 states including California, Texas, and Maryland, is grappling with higher labor costs. It has worked through those increases and has sometimes gone beyond its core group of contractors, said CEO Doug Bauer.

One way Tri Pointe and other home builders deal with product delays is to ask contractors to install temporary facilities and equipment, for example, so buyers can move in as soon as possible.

“As soon as the original item is available, we will return to install it,” said Bauer.

In order to stay one step ahead of rising costs, Tri Pointe has increased its home prices and, if necessary, reduced the incentive to buy. Even so, the builder has raised its forecast for the number of houses it is expected to deliver this year from 6,000 to 6,300.

While the large, publicly traded construction companies have the resources to buy building materials and store them until needed, the smaller construction companies that make up the bulk of the industry are at the mercy of suppliers.

Sivage, whose company builds houses priced between $ 250,000 and $ 1 million, was able to set the price of wood with suppliers a year in advance. That has changed in recent years with the increasing demand for wood. Now Sivage doesn’t know what it will cost him until it’s ready for delivery.

“We had to grin and take it,” he said.

Copyright 2021 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed in any way without permission.

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Summit County’s real estate market is anything but easy for first-time homebuyers

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Leah Canfield, longtime resident and real estate agent for Coldwell Banker Mountain Properties, smiles outside a home in the Wellington neighborhood of Breckenridge on Saturday September 25th. Canfield recommends that first-time buyers take at least six months to find a property in the county.
Ashley Low / For the Summit Daily News

Rising prices, high inventory turns, and cash offers are all evidence that the Summit County’s real estate market has been hot for some time, but what has that done for first-time home buyers?

In the case of Dillon-based Alex Cole, it meant waiting up to seven months to find a property that met his minimum requirements and budget. Cole lived in Denver and had spent a few winters in the county before deciding to move. He was looking for a property that had to be within the county limits, within his budget, and in a quiet two bedroom area.

“It’s just been a puzzle since February,” said Cole. “I have a feeling you are starting to build your puzzle pieces. I knew it was Summit County. Now, considering my price, I had to find out exactly what area it was in? “

First, Cole said he searched Breckenridge before focusing on Wildernest and then finally Dillon Valley, where he recently bought a three bedroom, two and a half bath condo.

Leah Canfield, a real estate agent at Coldwell Mountain Banker Properties, said this was not uncommon. In fact, Canfield’s recommended buyers give themselves six months to find a property. To move the process forward, when using the Multiple Listings Service database, buyers should work closely with their agent to set realistic expectations before proceeding.

“I would recommend that you look up the MLS and get whatever has been sold in the last six months that meets your criteria and that is within your budget, and if two or three spots have been sold it means none There’s a lot out there, ”Canfield said. “That means they are looking for something that doesn’t exist.”

Cole closed his house in late September. According to the Summit County Assessor’s Office, the condominium was sold for $ 530,000.

Price is another factor that makes it difficult for first-time buyers to anchor themselves in the market. Andrea Perry, of Silverthorne, said she had lived in her family’s vacation home in Leadville for the past five years, which helped her save enough for a down payment. Even then, she said her parents had given her financial support to shut down.

“The only reason I could do this was to help my family,” Perry said. “The ability to rent a house from them and have my parents help with the down payment really made this possible, and a lot of people don’t have the resources to help them buy their first home. It’s a really difficult process. “

Perry said she was one of several offers vying for her two-bedroom, two-bathroom apartment in Wildernest. She believes it was a letter to the sellers, along with a short tender period, that influenced her decision in her favor.

“I had offered her the price and wrote a letter saying that I was a local and a first-time home buyer, and I think all of that and the short offer period were the only reasons I was actually able to get the apartment,” Perry said .

Although writing a letter worked in Perry’s favor, Canfield said it falls into a gray area and some agents will try to prevent letters from being written and received as it could lead to discrimination lawsuits.

Perry said it was difficult to find something that would work for her from the inventory available. She looked for a two bedroom apartment with a washer and dryer and found one in Wildernest. The condominium was sold for $ 549,000, according to the Summit County Assessor’s office.

Of the first-time home buyers looking to get into the county’s real estate market, the majority are already living in the county, Canfield said. Canfield said she has heard of expanding families currently renting who are sometimes interested in buying a home, but it is difficult to save enough for a down payment due to the high rental payments. Some others who currently live in a house are hesitant to sell because it is likely that their house will be eaten up much sooner than they can find a new place.

As for the cheapest inventory in the county, the latest report from the Land Title Guarantee Company points to units in the Dillon Valley. The average transaction price for a unit here is $ 382,292. However, the prices for units in traditionally cheaper areas continue to rise. Canfield said A-frame homes in Blue River used to be considered affordable, but some of them hit $ 1 million. According to the Land Title report, the average transaction price for units in Blue River is $ 747,900.

There are resources available for first-time home buyers to help them get started. In addition to various federal programs, the Summit Combined Housing Authority offers three different down payment loan programs for Summit County residents. These loans are only available for main home purchases and require a 1: 1 match of up to $ 25,000.

Rob Murphy, executive director of the Summit Combined Housing Authority, said the organization typically provides three to seven loans a year, and this year has been quiet with just one loan. Murphy said he attributed this to low interest rates and the fact that not many are aware of these programs.

Even with programs like these, both Canfield and Cole said that first-time home buyers should be patient once they begin researching the market.

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NABOR® Economic Summit experts discuss migration and regulatory patterns

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NAPLES, FL – More than 300 REALTORS®, real estate professionals and local executives interested in Collier County’s economic health and its impact on the local real estate market attended in person or virtually on the Naples Area Board of REALTORS®. part (NABOR®) ninth annual economic summit, “A View from the Top”, on Tuesday, September 7th, 2021, at the Hilton Naples. Three top economists gave a qualitative insight into the factors influencing the economy and shared their analysis of the factors influencing growth and property sales in the near future.

The data-rich hybrid event began with a welcome message from NABOR® President Corey McCloskey, followed by remarks from event sponsor BJ Cottrell, who is the managing partner of the FIRPTA Group. Longtime summit moderator Jeff Lytle set the tone of the day by assuring attendees that they would get answers to questions about the impact the pandemic is having on the economy and whether it will continue to affect the housing market.

First, Dr. Brad O’Connor, Florida Realtors® chief economist and director of industrial data and analysis, takes the stage. After Dr. O’Connor had given a comparative overview of Florida and the local housing industry, Dr. O’Connor said data showed that the Florida luxury real estate market has improved more than any other price segment over the past year. He then referred to data from the United States Postal Service (USPS) which showed that New York had the highest number of residents who moved their permanent address to Florida in 2020. The USPS data also showed that new residents came mainly from urban cities and boroughs like Manhattan, Chicago, and Boston.

The presentation by Dr. O’Connor included a historical perspective of the price data. “Prices in Florida haven’t gone down in 10 years. But while the median closing price for single-family houses has apparently stabilized in recent months, the prices for condominiums have continued to rise. “

Dr. O’Connor added, “If all of the Florida homes were on the market right now, we would have an eight month inventory.” He quickly assured the audience that the current situation of house bank defaults does not have the same qualities as it did 10 years ago due to the stricter lending rules.

Dr. Lawrence Yun, Chief Economist for the National Association of REALTORS®, announced in a virtual presentation that the “work from home” trend will outlast the pandemic and predicted that it will continue to have a major impact on where people buy a home for years to come.

With a housing shortage in America, Dr. Yun points out that rents rose 8 percent over the past year. He also predicts that rents will continue to rise as house prices are also likely to continue to rise due to our inability to meet demand. In fact, he said, “A year ago home prices were 20 percent lower, so some buyers are being priced today.” Dr. Yun also revealed that for these prospective buyers, rental payment history is used as a factor in qualifying for a mortgage.

Dr. Yun predicts that property prices will continue to rise 5 to 10 percent in Florida and potentially up to 20 percent in the Naples area.

Most recently at the summit was Dr. Elliot Eisenberg, a political economist and celebrated public speaker who was a former senior economist with the National Association of Home Builders. Dr. Eisenberg, whose style of presentation brings humor into an often banal topic, made it unmistakably clear that “the above trend growth will continue until next year”. It showed several graphs that identified consumer behavior activity during the pandemic, including the increase in retail sales when all were in quarantine and how the service sector is expected to overtake retail consumption as the preferred way to spend money now as the Consumers are less reluctant to go to their homes.

Dr. Eisenberg said, “Under normal conditions, when you exit a recession, supply and demand will collapse. But not now. ”That’s because demand has skyrocketed as people are hungry to return to pre-pandemic consumer behavior, but the influential impact of the pandemic has resulted in all production being halted – both for the retail as well as for the service sector – and production cannot keep up.

Dr. Eisenberg said the stock market has averaged 10 percent annual return for the past 10 years, but predicts the average return could decrease to about 5 percent annually over the next 10 years. Importantly for REALTORS®, he said: “Household balances are spectacular. We want to spend and consume and do, it’s just that we can’t get people to do something [goods] and service [our needs]. However, if the [pandemic] the recession began, we were forced to stay home, and forced savings were created. As a result, these forced savings saved many people $ 25,000, which is why we saw an increase in first-time home buyers in 2021. “

In conclusion, Dr. Eisenberg, he doesn’t expect the Federal Reserve to hike rates before the end of 2022 – the Fed may be forced to hike rates before it wants to. “

The Economic Summit is a joint effort by the NABOR® Board of Directors, the Media Relations Committee and the Economic Summit Task Force, led by Rick Fioretti, Chair of the Economic Summit Committee.

NABOR® thanks its event sponsor The FIRPTA Group, technology sponsor Supra, program sponsor Stuart Kaye Homes, media sponsor SWFL Home Inspections, reception sponsor DR Horton and table sponsors: Gulfshore Insurance, Law Offices of Sam Saad III, Honc Industries, Old Republic Exchange, The National Association of Hispanic Real Estate Professionals (NAHREP), Women’s Council of REALTORS®, and Keep Collier Beautiful.

NABOR® is located at 1455 Pine Ridge Road in Naples. For more information on the Economic Summit, please contact Marcia Albert at (239) 597-1666.

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