Highlights of Texas' 1st Second-Home Expo in Woodlands Marriott and some Buyer Advice

Developers make big splash at Expo as they tout amazing new Real Estate Products on the Texas Gulf Coast from Galveston to Mustang Island and South Padre Island.  Second Home buyers were scarce at the Expo; however, Realtors networked their listings to create liaisons ready for the post recession boom predicted by Texas A&M Real Estate Center

Actual buyer turnout for the show was lower than expected, probably becuase most second home buyers use the Internet now.

The Second Home Expo attendees had the benefit of meeting face to face with some of the coast’s best developers and heard renowned speakers on a wealth of subjects about second home ownership. Many Realtors busied themselves making connections with other Realtors from throughout the Gulf Coast area. 

Dr. Jim Gaines of Texas A&M’s Real Estate Center was present and lectured on the future outlook of Texas real estate. Mike Stuart of TexasGulfCoastOnline was present representing numerous coastal developers and informed the visitors of all the new construction projects from Galveston to South padre Island.

Future Expo events are planned in Dallas and Austin. The Expo will be held yearly every April in Houston. Read More Here

Coastal developers stole the show with new products and developments garnering most expo attendee’s attention. Mike Stuart CEO of TexasGulfCoastOnline.com informed the attendees about new and unique properties  both expanding and planned for the Texas gulf Coast. 

Stuart gave detailed information on numerous projects including the following:

GALVESTON ISLAND EAST-END

The Palisade Palms on Galveston Island currently consists of two modern curvilinear towers with panoramic views over the Gulf of Mexico. The Palisade Palms is the first "on the beach" condominium to be built on Galveston Island in more than 20 years and the 27-story towers offer easy access to the surf and sand of East Beach. The 288 units range from 1,000 to 3,000 square feet. Amenities include two pool areas with spa hot tubs, a plaza deck with a fire pit, fitness center, tennis court, media lounge, private party room, gazebo, concierge service and more. Plans are in place for a third tower and preconstruction deals are available.

Contact Alice Donahue Real estate for more information on preconstruction deals. Closings on the first two towers which are 95 % sold out are scheduled to begin next month. The excitement created by the project was the subject of a news story on Fox News in Houston.

SOUTH PADRE ISLAND

The Sapphire, world famous developer Randal Davis’s new generation Skyscraper on South Padre Island was built using the pinnacle of modern hurricane resistance technology. It is just plain stronger than your average hurricane. It is visually stunning in appearance and offers World Class second to none amenities. Sales have been brisk and reports have it over 85 % sold out.

MUSTANG ISLAND CORPUS CHRISTI

Island Park Estates A new fifty three lot seaside community located in Corpus Christi, Texas. The subdivision is between North Padre Island and Port Aransas, Texas. They are building a community of seaside cottages that will have exclusive beach access, oceanfront views, oceanfront lookout, private lagoon, swimming pool and much more. This area of the beach is uniquely protected from through traffic by the Mustang Island Park jetties.

Cinnamon Shore located on 1200 feet of pristine beach on Mustang Island has completed its dune crossover allowing golf cart access to the beach from the recently completed cottage homes. The cottage homes are available from $400,000. Come see the progress for yourself. You’ll be glad you did.

GALVESTON COUNTY

Diamond Beach Resort and Spa This newest addition to the Randall Davis Beach Collection is the only ocean front property protected by the Seawall, bringing the beach to your front door. Enjoy beach front living with none of the hassles.

The Biscayne, located on the southwestern tip of the Bolivar Peninsula offers perhaps the largest lot’s available on the near beach front as any subdivision on the Texas Gulf Coast. With large lots and views protected by a nature preserve it offers some of the most rapidly appreciating properties available. These won’t last long once the secret is out.

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See all the new developments on the Texas Coast at http://www.texasgulfcoastonline.com/NewConstruction.aspx

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See the Texas Coast Market Analysis at http://www.texasgulfcoastonline.com/Sales.aspx

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Should You Wait to Buy in a Down Market of Falling Home Prices?

Everybody wants to know how to best time the market when buying a home. It's just natural. Especially if you're thinking about buying in a down market where homes prices are declining. You wonder how low they will go and whether you should wait, right?

Some Home Buyers Should Buy Immediately!

You're probably thinking: "Of course, she would say that. She's a Realtor, and agents always say 'Now is the best time to buy'." Well, here is why:

• If you are a seller who wants to move up to a more expensive home in a down market, now could be the best time. The longer you wait to sell, the lower the price of your home could fall.
• If you can arrange for alternate housing, a smart strategy is sell now, wait a few months, then buy your new home.
• If you sell and buy simultaneously, you'll still be ahead of the game because the price reduction on the purchase is greater than the loss on the sale.

Consider the "Loss" on Selling Your Present Home

For example, say your present house is worth $300,000, but because of high inventory and few buyers, you must reduce your price by 10%. So, instead of receiving $300,000, you would get $270,000 and "lose" $30,000.

Consider Your Real Profit

Now, consider this. Say you bought this home 10 years ago and paid $100,000. You're still ahead $170,000, less costs of sale, aren't you? (This ignores monthly payments, but you would make those if you were renting, too.)

Consider the "Savings" on Buying Your New Home

If you are planning to move up to a $500,000 house, which is located in the same distressed market, you could probably buy that house at that same 10% discount or $450,000. This would mean you had saved $50,000.

Review of Selling and Buying Numbers

1. So you "lost" $30,000 on the sale of your home
2. But you "made" $50,000 on the purchase of your new home
3. Doesn't that put you $20,000 ahead?

Don't Forget the Impact of Interest Rates

Which way are interest rates moving? Are they moving up or moving down? If interest rates are near an all-time low and beginning to inch upwards, waiting could cost you more than you would think. You might not be able to afford to buy a home at any price.
Each 1/2 point increase in your interest rate gives you $25,000 less in purchasing power.
Each 1 point increase in your interest rate gives you $50,000 less in purchasing power.
Each 2 point increase in your interest rate gives you $100,000 less in purchasing power.

Look at the Differences Among Purchase Prices versus Interest Rates

If you put down 20% and qualify for an 80% loan, here are your principal and interest payments on the following purchase prices:

• $425,000 sales price, at 8.25% interest, your payment is $2,554.
• $450,000 sales price, at 7.75% interest, your payment is $2,579.
• $475,000 sales price, at 7.25% interest, your payment is $2,592.
• $500,000 sales price, at 6.75% interest, your payment is $2,594.
• $525,000 sales price, at 6.25% interest, your payment is $2,586.

The payments are almost identical. However, the home you can afford to buy a 8.25% is $100,000 less than the home you can afford to buy at 6.25%. If you wait for prices to further decline, the perceived value could be lost due to higher rates.

Before you so much as open the real estate section of your newspaper, decide what you really want out of your second home. And, of course, discuss your goals with anyone who’ll be buying, or moving, along with you. Most people looking for a second home are doing so for either:

• investment - to earn money from rental income or home-value appreciation
• vacation - to find a destination to escape the daily grind,
• future retirement - to establish a place to enjoy the post-workforce years.

Choosing and staying focused on your main goal will help you make later decisions, for example regarding the type of home you choose, where it will be located, and whether or not you will rent it out. You may already know which goal is uppermost in your mind.

But take a moment to review the characteristics of each type of second-home buyer, below. This is your chance to feel certain about your choice and learn what’s unique about your home-buying needs.

Reasons People Buy a Second Home

Buying a Second Home for Investment If you see a home with deeded beach rights and the first thought that pops into your head is, “Wow! Imagine how much I could sell that for after a few years and a paint job,” then you’re probably motivated by investment goals. Investors heed one thing above all others—getting a healthy return on their second home, be it through rental income or, more likely, appreciation. Everything else takes a back seat. Investors view buying a second home as simply an alternative to putting money into stocks, bonds, or other investment vehicles, and their decisions about purchasing a second home are methodical and financially based. Instead of scouting for a home in their favorite vacation destination, investors might buy one in a town where they’d never go, but which has had a track record of steady appreciation in home values.

Buying a Second Home for Vacation
If you see a home with deeded beach rights and the first thought that pops into your head is, “Wow, a private beach where I could relax and leave the craziness of life behind,” then you’re thinking like a vacationer. You’re probably already fantasizing about using your second home during your free time, holidays, or peak sport seasons. While almost every vacationer wants a second home to be a good financial investment, turning a profit is not the main motivation.

Buying a Second Home as a Future Retiree
If you see a home with deeded beach rights and instantly think, “What a great place to live after I’ve stopped working,” you’re thinking like a future retiree. It doesn’t matter whether your retirement date is just around the corner or decades away. With people living longer (current life expectancies are around 75 years for men and 80 years for women), retirement has the potential to be the start of life, not the end. Buying a second home now for future retirement could give you a jump start on the good life. Like vacationers, future retirees often rent out their second homes to offset expenses, and even look for the home to appreciate in value. However, rental or other profits are not the driving factor behind future retirees’ buying decisions. Rather, their goal is to have a second home they can ultimately call “home.”

Buying a Second Home for Mixed Reasons
Of course, you may have a mix of motivations. Perhaps you want the home primarily for vacation purposes, but will also treat it as an investment property by renting it out for parts of the year, and will maybe even retire in it afterwards. That’s fine—but decide which of your goals (investment, vacation, or future retirement) is number one, so that you’ll stay focused as you enter the home buying fray.

Your secondary motivations for buying can, however, be important in helping you develop a backup plan for your property. You know what they say about the best-laid plans: An investor who planned on flipping the property may watch house values plunge 10%; a vacationer may receive an unexpected job transfer to the other side of the country, meaning significantly less time spent at the weekend getaway; a future retiree whose second home sits at 3,500 feet above sea level may discover that high altitudes aggravate asthma. As you look at potential houses, it’s worth thinking, “If I can’t use it for this, maybe I can use it for that.” Here are some likely backup plans:

• The investor who planned on flipping the property could plan to rent it out and use the income to offset expenses until house values rise again.
• The vacationer facing an unexpected job transfer could plan to rent out the property for most of the year, using it for vacations only a few times a year. 
• The future retiree with asthma could either sell the property at a profit or rent it out year-round and wait for house values to climb.

1. Decide Whether a Second Home Makes Financial Sense
2. Decide Where, and What Type of Home, You’ll Buy
3. Understand the Tax Implications
4. Come Up With Short-Term Cash and Long-Term Financing
5. Consider Nontraditional Financing Methods
6. Be Prepared If You’ll Be a Landlord
7. Take Steps to Protect Your Second-Home Investment

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Thank you for visiting our site and be sure not to miss our upcoming article on:

• how the current market is affecting Texas coastal home buyers, sellers and developers;
• how they are reacting to today’s market situation - and
• some suggested strategies they can each take to maximize their results

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See the Texas Second Home Market Briefing by Dr Gaines of the Texas Real Estate Center