Avoid Properties Located In Flood Zones
One thing that you should keep in mind when investing in Houston properties is the annual risk of floods and severe storms. When it comes to flood risks, some neighborhoods are safer than others.
You should always avoid property investments in floodplains. These areas can be human-made or natural, but they may lead to significant costs after a severe weather event. Ensuring your property against floods in a flood-prone area can get expensive quickly.
Additionally, you should focus on buying a property that is comparatively safe from hurricanes.
Houston Housing Market Trends
Single-family home sales dropped 17.1 percent, with 8,370 units sold compared to 10,102 in July 2021. That is the lowest one-month sales volume since January 2022. On a year-to-date basis, the market is now trailing 2021s record-setting pace by 1.3 percent, according to the July 2022 Market Update from the Houston Association of Realtors .
The only area of the housing market that experienced positive sales in July was the $500,000 to $1 million price range, which increased by 10.1%. Sales of homes priced between $250,000 and $500,000 decreased by 9.2 percent, the least significant reduction. Due to the paucity of homes priced below $250,000, consumers have been forced to consider more expensive property options, move their focus to rental homes, or delay buying or renting decisions.
The average price of a single-family home increased by 9.9 percent in July to $426,494, which is far less than the record high of $438,844 set in May 2022. The median price increased by 12.7 percent to $348,740, which is significantly less than the all-time high median price of $354,611 reached the previous month. In March of this year, the average price of a single-family house in Houston surpassed $400,000. Since May of 2021, the median price has stayed above $300,000.
The HAR’s most recent report on the Greater Houston Area Housing Market is available below. It analyses important housing indicators across the Greater Houston region for July 2022.
What Is The First Step To Buying A House In Houston Tx
The first step to buying a house in Houston, TX, is to evaluate your financial situation and determine if you are ready for home ownership.
Related: how to buy a house in houston tx, how can anyone afford to buy a house in houston tx, how much to buy a house in houston tx, how to buy a house in houston tx with low income, how to buy a house at auction in houston tx, how to buy a tiny house in houston tx, how to buy land and build a house in houston tx, how to buy a home in houston tx, houston tx homes for sale, homes for sale in houston tx, houston tx mortgage calculator, home for sale in houston tx
Related: buying a house in houston tx, houses for sale in houston tx, houston tx houses for sale, house for sale in houston tx, houston tx house buyers, homes to buy in houston tx, buying a home in houston tx, how to buy a home in houston tx, buy house houston tx
Related: buying a house in houston, houses for sale in houston texas, houston texas houses for sale, house for sale in houston texas, houston texas house buyers, homes to buy in houston texas, buying a home in houston texas, how to buy a home in houston texas, buy house houston texas, housezo, houszeo, houzzeo, hozeo
Recommended Reading: Mutual Fund Investing In Startups
What Is Happening In The Housing Market In Spring And Summer Months Of 2022
There are a combination of factors that make the 2022 housing market unique in the second half of the year.
How Much Will You Pay In Closing Costs
In addition to your down payment in Houston, youll need to consider how much to budget for your closing costs. According to data from ClosingCorp, real estate transactions in Texas typically have closing costs that add up to 1.5 percent of the purchase price. Based on the median home price tag in Houston of $343,950, that comes out to just over $5,159 in extra expenses. While the seller may cover some of those costs sellers often pay for the new title insurance policy here its important to note that your lender may charge additional fees for your loan. Its important to compare multiple lenders in Houston to get a sense of the true costs of buying a home.
Recommended Reading: How To Invest In Korean Stock Market
Which Country Is Best For Property Investment
The United States is the best place for you to explore different investment property options. In this country, real estate is one of the most mature, steady, and transparent markets worldwide. The country has a strong infrastructure that includes numerous investment properties for sale making it the best place for property investment.
Houston Real Estate Has Been A Great Investment
The #1 predictor of real estate prices is job growth. Houston has created more jobs than any other major US metro area over the last year.
Job growth is the number one factor that drives real estate prices. And in the past few years, Houston has consistently created more jobs than other major U.S. areas.
This past spring, Houston hit its lowest unemployment rate at 3.1%. Most of the job growth is coming from industries like Health Care, Construction, and Administrative Support and Waste Management industries.
A study from Houston MetroNext projects that Greater Houston’s population will surpass 10 million by the year 2040, up from roughly 7 million today.
Don’t Miss: Asset Allocation To Alternative Investments
Within Your Price Range
There is absolutely every kind of home within the spreading boundaries of Houston, TX. There are tiny starter homes, apartments and multi-family ‘plexes,’ mini-mansions, and full-sized mansions. With an accompanying price-range to match. Some neighborhoods are mind-bogglingly expensive, some are surprisingly affordable.
So select your Houston investment home candidates carefully. Make sure that not only is the listing price in your range, but also the property taxes and potential HOA fees.
Is A Home An Investment
According to surveys, homebuyers see their property as a solid investment. According to a Bankrate survey issued in July, real estate will rank second behind stocks as the greatest way to invest over a ten-year period in 2020. Real estate ranked first in Bankrate’s 2019 report.
According to the National Association of Realtors’ 2020 Profile of Home Buyers and Sellers, 83 percent of purchasers consider a home purchase to be a “sound financial investment.”
The notion that your primary property might be an investment stems from the fact that, historically, real estate values rise. We all know someoneperhaps a parent or grandparentwho bought their property for less than $100,000, and today it’s worth several millions of dollars.
While most financial experts encourage homeownership as an investment vehicle compared to stocks and bonds, the sole reason is the safety associated with the real estate industry. However, the returns aren’t as significant compared to other investment vehicles.
But guess what? It doesn’t matter. Whether or not the value of your property outpaces inflation, the choice to purchase a home should be more personal than financial.
You May Like: The Investment Company Of America Class A
Pros And Cons Of Buying A Home
Quick Answer
Is now the right time for you to buy a house? Before deciding, give serious consideration to your circumstances, including your income, rising interest rates, home prices and the amount of your savings.
In this article:
There can be great satisfaction in making a house your own, but financing a home brings major obligations, so before you take the leap, make sure you’re doing it for all the right reasons and that the time is right for your circumstances.
Here are some thoughts to consider when deciding when it makes sense to buy a houseand when it might make more sense to hold off on the purchase.
How Safe Are The Neighborhoods Where Youre Looking To Live
Houston is a big city, and every big city faces a share of big problems. While CrimeGrade gives Houston a D for safety overall, its important to understand that different pockets of the metro area have different levels of criminal activity. As youre comparing neighborhoods, make sure youre thinking about where youll feel comfortable walking home and where youll have concerns about crime.
Read Also: Wells Fargo Real Estate Investment Banking
Houston Major Events In The Past 5 Years
“The Houston Properties Team under the leadership of Paige Martin is one of the most successful real estate teams in Texas. Paige and her team take the pain out of the real estate experience through hard work, proprietary systems and processes, and a deep understanding of the hyper-local Houston real estate market. She’s ranked #5 in Keller Williams worldwide and #1 in Houston with good reason.” Sandy
Key turning points in Houston real estate:
Houston real estate is hyper-local. See how your neighborhood is trending now.
How Much Will You Pay In Property Taxes
Texas makes plenty of headlines for its lack of certain tariffs: Theres no state income tax and no real estate transfer taxes. However, the government has to earn money somehow, and the states average property tax rates are quite high at 1.8 percent. Its important to understand that tax rates vary based on where you buy in the Houston area, too. For example, if you want to send your kids to school in the Galena Park district, youll pay a higher rate than in the Clear Creek district. Be sure to ask the seller for a rundown of what theyve paid for property taxes previously.
Don’t Miss: How Can I Invest In Foreign Stocks
Should You Buy A House
In light of these pros and cons, it makes sense for you to buy a home soon if:
- You’re buying in an area where you’re confident home prices will hold steady or increase, or you’re prepared to stay in the house for the long haul and to ride out any pricing drops that occur within the next few years.
- You have sufficient savings to make a down payment .
- You have sufficient reliable income to cover your monthly mortgage payments .
- You have a realistic understanding of the tasks involved in maintaining a house and are prepared to perform them .
Alternatively, you should probably consider holding off on buying a house at this time if any of the following circumstances apply:
- You lack sufficient savings to cover a down payment
- You can manage a down payment but doing so will leave you without any savings or otherwise stretched to the financial breaking point.
- You’re unprepared to take on the chores associated with home maintenance and prefer to leave those duties to a landlord or property manager.
Success Theme #: Buy Close To Major Job Centers
Houstonians consider Traffic as the biggest problem facing The Bayou City, outranking Crime , Economy , and Flooding .
Impact: Appreciated 38% Over 10 YearsEffects: 13% Of the Market
Definition:Located within 15 minutes or less commute to one of Houston’s four major job centers: Downtown, Galleria, Medical Center, or Energy Corridor.
BackgroundThe #1 predictor of real estate prices is job growth.
The easiest way to ensure your property is connected to job growth is to be located near the four areas of the city that are growing jobs.
Houston Overview
The Houston metropolitan statistical area has a population of approximately 7 million people and is the fifth most populous area in the country.
Houston has historically been among the fastest-growing areas in the US and has been adding about 900,000 people every 7- 10 years.
Thanks to the increase in population, combined with limited mass transit and a more “Laissez-faire” government planning policy, traffic is often cited as one of the most common complaints.
A large number of buyers are willing to pay higher land values and home values in the best areas to invest in real estate in Houston to not have to deal with a commute.
Houston Economy
Greater Houston has one of the strongest economies of any region of the US and is home to 21 Fortune 500 companies, ranking fourth among all MSAs.
Houston has four central job hubs.
Downtown Houston
View Downtown Houston Lofts For Sale
The Medical Center
View Medical Center Homes For Sale
Also Check: Is Roth Ira An Investment
Houston Real Estate Market Is Still Developing
Houston has a lot of room to grow and develop unlike the fully built city like New York, San Francisco, Washington, etc. Houston has a low-density sprawl which is fantastic, and this means that there are still spaces within the city for the construction of residential housing. Many inner-city neighborhoods still have spaces either abandoned or vacant, and these land spaces can be used for building houses.
Investing in Houston real estate is a perfect idea because there is a lot of variety of investment properties available to investors. Houston has an extremely good business infrastructure and residential housing costs provide an operating cost advantage to prospective investors.
There are many acres of land available, and there is a lot of movement going on in the real estate sector in Houston which makes it an ideal real estate market where investors can easily find old and new properties in the market. Whatever type of real estate investing you want to do, you can easily find a lot of investment properties that offer investors a strong opportunity to generate passive monthly income. This is another good reason to invest in the Houston housing market.
We Analyzed 512056 Houston Home Sales Save Money Headache & Time With These Top Houston Homebuying Tips
Buying a home seems simple. But the reality is, there are pitfalls that can impact your quality of life and put your financial investment at risk.
How do you know if youre getting a good deal? You can only truly answer this when its time to resell your home. This is true post-COVID-19 and the energy crisis. Its like buying a stock: you only find out your gains or losses when you resell.
38% of homes bought & re-sold within 5 years lost money for their owner on a net basis. Hiring a seasoned professional to navigate you through is one of the best ways you can protect against this.
We studied 512,056 Houston home sales over two decades. Nine property traits had systematic & statistically significant negative impacts on the resale value.
These are the “The Nine Kisses Of Death For Resale”. Avoid them to make a good Houston real estate investment.
Properties with any of these factors on average:
-
Re-sold for lower values than their peers.
-
Suffered from a smaller demand .
-
Stayed on the market longer.
-
Required a larger discount off the original listing price to attract buyers.
You can also read part #2 of this series.
You May Like: How To Invest In Real Estate For Passive Income
Is It Hard To Buy A House In Houston Texas
Buying a house in Houston is exciting. However, it may be challenging, especially for first-time homebuyers. According to the Characteristics of Homebuyers and Sellers report by the National Association of Realtors , only 19% of homebuyers reported having no difficulty during the home-buying process.
Resale Issue #: Proximity To Commercial Buildings
Accessibility, convenience, and privacy often don’t mix but a good Houston Realtor can help you find the property with the right balance without sacrificing a probable future resell.
Impact: Appreciated only 8.9% Over 10 YearsRequires: 3.1% Off List Price To SellEffects: 6% Of the Market
Definition:
Property located on a lot adjacent to a lot with a commercial property according to Google Maps.
Living near restaurants, convenience stores, and gyms might increase your home’s value. But, having them right outside your doorstep brings some challenges too.
Some common issues of homes near commercial buildings are:
1. Traffic Congestion
Patrons of the businesses next door will contribute to traffic congestion, especially during peak business hours. Many cars would pass by the house round the clock. Homeowners will have a difficult time parking and going out of the driveway.
2. Noise
If the house backs up to a pub or restaurant, loud music and loud customers can be a problem, especially at night. Loud diesel delivery trucks driving by and running their engines will also be a constant source of the noise.
3. Safety and Privacy
Aside from the noise, rowdy customers also bring safety concerns. Conflicts can happen anytime and the severity is unpredictable. These conflicts expose homeowners living nearby to dangers that may arise.
4. Cleanliness
5. Unpredictable future developments
Recommended Reading: How To Invest In Property With Little Money
What About Buying A House In Austin Texas
Austins housing market is so booming that it gets national press, but our study found that for investors, this hill country hot spot is not a great bet. Though its five-year home value appreciation is among the highest in the cities in our study at 76.2%, Austin came in at number 22 on our list of the best cities to invest in real estate in Texas. A big reason why: Typical house value in Austin is $596,446, nearly double the average of the cities in our study. The rent-to-home value ratio is extremely low at 2.58%, the rent-to-income ratio is 4%, and the rental vacancy rate is 6.6%. Austin suburbs such as Cedar Park, South Austin, and many nearby Texas hill country communities were too small to be part of this study.
