Hottest Real Estate Markets Revealed
Hottest Real Estate Markets Revealed
You don’t have to be a real estate professional to find a great deal on a home; you just need to know your market.
Even with a declining economy and a national housing crisis, there are some housing markets that are actually appreciating.
Housing Predictor has released its annual Hottest 10 Buyers Markets report based on studies conducted on all 250 local real estate markets Housing Predictor tracks on an ongoing basis. This year's Hottest are: Honolulu (HI), Salem (OR), Maui (HI), Bismarck (ND), Sun Valley (ID), Biloxi (MS), Austin (TX), Grand Junction (CO), Spokane (WA) San Antonio (TX) - and Crystal Beach (TX) would be on the list if tracked by HPI.
Notice how well the Texas Markets are doing in both the Metro areas and on the coast:
The Texas coast market is doing well and has a super performing market on the north-east tip closest to the billions being invested in energy plants.
According to the Galveston Board of Realtors, the Bolivar Peninsula area home sales increased by 34%.
Crystal Beach had 41% Increase!
the highest in the entire nation, fueled partly by an $8 billion expansion of Royal Dutch Shell’s Motiva refinery in Port Arthur Texas.
Crystal Beach Galveston Texas
Bolivar Peninsula Galveston County Sales 2006 and 2007
from Galveston Board of Realtors
|Even though the Crystal Beach area was the only real estate market on the Texas coast which experienced significant sales growth and a median price increase in 2007,
all Texas coast markets showed median price increases!
Click here to learn more.
In fact, according to First American CoreLogic, a leader in residential mortgage data and analytics for the mortgage industry and Wall Street, announced that Thirty-One States, including Texas, Showed Positive Growth in Past Year.
“The latest LoanPerformance HPI (home price index) release reveals that, although real estate in key markets like California, Florida, Nevada and Arizona continue to exhibit home price depreciation, 31 states show HPI gains over the past 12 months,” said Damien Weldon, vice president, collateral and prepayment analytics for First American CoreLogic.
||The LoanPerformance HPI provides a|
comprehensive set of monthly home price indices
and median sales prices covering 7,462 ZIP codes,
956 Core Based Statistical Areas (CBSA) and 662
counties located in all 50 states and the District of
Columbia. The indices, which are the most
comprehensive available in the industry, are
reported to clients five weeks after each full month
Market Fundamentals Defined:A Balanced Market
In the ideal local real estate market, there should be a balance between demand for homes and the supply of homes available for sale. Although there is no exact benchmark to measure balance, there are ways of knowing if a local real estate market is close to being a balanced one.
A local market has an adequate supply of homes for sale if houses on the market sell within six months - even higher in coastal areas where 12 months is considered a balanced market.A Seller’s Market
When the market demand for homes in a particular area is high and there is a shortage of homes available for sale, the balance of power in the market shifts toward the seller. With excess demand in the market for homes, sellers can wait for offers on their property to reach (or exceed) their minimum selling price.
We were in a seller’s market in early 2005 at the height of the real estate boom in most of our nation’s housing markets. Housing was “hot,” particularly in ocean resort towns. This prolonged excess demand for properties exerted substantial upward pressure on pricesA Buyer’s Market
When demand for new and existing homes is weak and there is a glut of properties available on the market, the upper hand in negotiations switches to buyers.
Buyers now have a much wider choice of properties from which to choose and are often able to negotiate a price that is lower than the listed price.
Sellers do all they can to sell their homes—even offering to pay some of the upfront costs of the buyers, reducing the listing price, and offering other incentives to attract buyers.
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Comment By Dr. James Gaines Real Estate Center at Texas A&M University
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Comment By Carrie Alexander THE AMERICAN-STATESMAN
Texas Homeowners Hold Winning Hand, Says Real Estate Center
Affordable housing is the state's ace in the hole in the predicted future high-stakes real estate version of Texas hold 'em. In fact, the state's leading expert on residential real estate is betting housing affordability will be the "most significant growth stimulant" for Texas over the next 25 years.
"Texas is the most housing-affordable, high-growth state in the nation," says Dr. Jim Gaines, research economist for the Real Estate Center at Texas A&M University. "So far, skyrocketing home prices common to fast-growing states like California and Florida have not occurred in Texas."
In mid-2007, the state's median-priced home was $151,000 - some two-thirds the national median of $229,000 and about 75 percent less than California's $589,000.
According to the Texas Housing Affordability Index compiled by Gaines, a Texas family earning the statewide median income has 152 percent of the income required to qualify for financing on the median-priced home. Nationally, families have about 16 percent more than is required.
Other measures show just how affordable Texas homes are. One expresses median house value as a multiple of median housing income. The lower the multiple, the more affordable the housing.
"In 2005, the national median home value was 3.62 times the median household income," says Gaines. "In Texas, the median value was only 2.52. Current median prices to median household income multiplies are even higher, and the difference between Texas and the nation are even more pronounced."
Gaines says housing affordability is just one card in a deck stacked in the state's favor. The other winning cards include lower cost of living and cost of business, greater employment opportunities and an appealing lifestyle.
"Events and circumstances point toward a Texas-sized boom between 2005 and 2030," Gaines writes in the latest issue of Tierra Grande magazine, a periodical sent to all the state's real estate licensees. "The state's population and economy -- as well as its housing and commercial real estate markets -- are poised to explode in volume and prices."
Gaines says the real estate game is changing, and the stakes are getting higher.
"Things will change dramatically from what many Texas are used to," he predicts. Population will be a key player at the table as Texas is projected to grow by 13.6 million by 2030.
"That's the equivalent of adding another Dallas-Fort Worth metropolitan area, another Houston metropolitan area, another San Antonio metropolitan area and another Corpus Christi," he says.
"Growth and prosperity will spread throughout the state, but most of the growth will occur in the state's urban areas," says Gaines. "Four out of every five Texans will live in the Dallas-Fort Worth-to-Houston-to San Antonio triangle."
New Texans will bring new jobs.
"Texas leads the nation in job creation. If Texas maintains its average employment-to-population ratio as expected during the next 25 years, the state will add another 4.5 to 5.8 million jobs," says Gaines. "Job growth is expected to be stimulated by overall U.S. economic growth and enhanced by Texas' employment-friendly characteristics."
More people and more jobs will lead to higher personal income.
"Extending the long-term trend that began in 1969 suggests the state's total personal income could increase by $1 trillion by 2030," says Gaines. "The 2005 Texas median household income of $42,139 could reach nearly $68,000 by 2030."
With the gains will come pains, says the noted economist.
"The projected population and employment boom will also strain local and state resources to provide public services and infrastructure," he said. "Texas will experience the same growing pains as other high-growth states. State and local fiscal capacities will be stretched, and Texans will debate the level and type of growth they want in their communities."
For more on Gaines' Texas economic outlook for 2030, including his thoughts on what might disrupt the ideal game plan, see "Looming Boom: Texas Through 2030" available online at http://recenter.tamu.edu/pdf/1841.pdf.
The Real Estate Center (recenter.tamu.edu) has been providing solutions through research for 35 years. Funded primarily by Texas real estate licensee fees, the Center was created by the state legislature to meet the needs of many audiences, including the real estate industry, instructors, researchers and the general public.
Real Estate Center at Texas A&M University
Dr. James Gaines, 979-845-2079
David S. Jones, 979-845-2039
Bryan Pope, 979-845-2088
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In Texas, there's still room for single-family coastal homes. In beach towns along the Texas Gulf Coast, there is no shortage of towering condominium projects, but there's also quite a market for beachgoers who have no interest in sharing walls with somebody else.
For those folks, single-family properties in communities near the beach are more attractive than a Gulf-view high-rise.
"Here, there's still room to build," says Alice Donahue, a real-estate broker who operates TexasGulfCoastOnline.com, a site that tracks real-estate trends in the area. "You don't see as many hotels and condos as you would in Florida, where it's gotten overpriced and congested."
Simply put, the Texas Gulf Coast remains a great place for a bargain beach house, says Jim Hayes, managing principal of Crown Team Texas, a Beaumont-based development group that created Laguna Harbor, a development on the Bolivar Peninsula near Galveston.
The single-family development route is less risky than a high-rise condo project, says Jeff Lamkin, chief executive officer of Seat Oats Group, which is developing the "new urbanist" community Cinnamon Shore near Port Aransas.
"I'm selling lots for $595,000," he said. "In Florida, that same lot is $2.5 million. There are still a boatload of people who can afford it here."
Here is a look at some of the single-family developments that are popping up along the Texas coast.
Situated on Mustang Island, just outside Port Aransas, the development has introduced "new urbanism" to Texas' Coastal Bend area.
The 64-acre community, which began infrastructure construction in spring 2007, aims to create a mixed-use, pedestrian-friendly development with a neighborhood feel and a limited impact on the environment.
Sales began in February, and the company says about half the 82 homes in the first phase of construction have been sold. The second phase of construction is to begin this spring and will include a town center with offices and retail shops.
Lamkin, the project's developer, said his decision to use the principles of new urbanism was pragmatic.
"In doing our research, we realized that the production type that held its value best and appreciated most was new urbanism," Lamkin says. "Folks want to live in a community, just to know your neighbor and know you belong."
Cinnamon Shore is modeled after communities such as Seaside, the development in the Florida Panhandle made famous when it served as the set for the "The Truman Show."
Cinnamon Shore is in a more secluded area of the coast. Lamkin said he has sold about a third of the lots to Austin-area families.
Among those buyers are Kevin and Julie
Cunningham, who are about to begin construction of a four-bedroom house. In addition to Cinnamon Shore's proximity to Austin — it's about a three-and-a-half-hour drive from their home — the less-touristy feel of the Port Aransas area was a key selling point, said Julie Cunningham, 44.
"South Padre Island is too far; Corpus Christi is too big. Port Aransas has a life of its own, a lot of character," she says. "And we liked the restrictions of Cinnamon Shore. It seemed a little quieter."
The Cunninghams, who have four children, plan to use the house as both a vacation home and as an investment, possibly renting it, Julie Cunningham says.
"We've just always preferred a home; you just get a little more room that way," she says. "A condo wasn't really an option."
The Shores of South Padre
Down the coast on South Padre Island is another community that embodies some of the elements of new urbanism. The Shores of South Padre, a 240-acre beachfront development that sits at the northern edge of the island, strives for a neighborhood feel. Shops, cafes and offices are grouped around a general store and marina. Houses and townhomes sit on red-brick streets. Also in the gated community is a sprinkling of condos.
"The Shores will help bring upper-end clientele to South Padre, and that's a positive thing for the whole area," says developer Dennis Franke, who created the community along with his brother Richard Franke.
In agreement is Gary Sanner, president of The Shores' property owners association. Sanner, 62, initially bought 12 lots in the project, and recently completed the construction of a 2,800-square-foot house on one of the lots. He is selling the home for just over $1 million.
"There are a number of nice properties on South Padre, but none of them are of the quality that The Shores will be," says Sanner, a Michigan native who also owns homes in his home state, as well as in Florida and Tennessee. Sanner says he has been investing in South Padre Island properties since 1983, and he has no plans for that to change.
"Things don't go at the same pace in Texas as they do in my island part of Florida," says Sanner, who owns a home near Stuart, Fla.
A look farther north along the Texas coast shows another single-family community being built in an eco-sensitive manner. Laguna Harbor, on the Bolivar Peninsula near Galveston, is an 80-acre development where the homes are built to be hurricane-resistant, with modular factory-built sections that are bolted onto concrete and steel pillars.
"We're introducing 'Fortified ... for safer living' construction to the area," says Jim Hayes, the project's developer. The Institute for Business & Home Safety's "Fortified ... for safer living" program offers guidelines on how to construct disaster-resistant homes.
The company has sold about 60 of its 87 lots, Hayes says.
"Modular production is really coming on," Hayes says. "It used to be that modular meant mobile homes; now it means high-quality products."
Laguna Harbor also created a few restrictions that will please environmentally minded homeowners. When a home changes hands, an environmental impact fee of 0.5 percent of the sales price will be assessed and donated to the Audobon Society or similar environmental group "to promote and enhance issues involving coastal environment," Hayes says. The community also prohibits residents from mowing in a 25-foot-wide section at the water's edge and has set aside 15 acres as a wetlands area.
"People here realize that when there is a development, there is an impact on the environment," Hayes said.
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