San Marcos Mercury | Local News from San Marcos and Hays County, Texas
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February 27th, 2009
Realtor board makes 'shocking' announcement

STAFF REPORT

The San Marcos Area Board of REALTORS® made what it called a “shocking” announcement this week: Most Texas homeowners would make a profit if they sold their homes today.

According to a report released last week by FirstAmerican CoreLogic, Texas is one of eight states that experienced positive home appreciation in 2008. In December 2008, Texas home values appreciated 1.8 percent compared to December 2007. In contrast, national home values depreciated 11.1 percent during the same time period.

“There has been lot of talk about how the Texas real estate market is different, but I think these statistics shine a spotlight on what that means,” said Brooke Hunt, chairman of the Texas Association of REALTORS®. “No market is immune to our country’s economic difficulties, but Texas’ long history of steady home price appreciation – avoiding the dramatic peaks and valleys seen in other real estate markets – is helping us weather the downturn and positions us well as the economy recovers.”

Texas has experienced positive home price appreciation for the last 16 consecutive years. With the population of the state expected to continue growing for the next several decades, that trend is likely to persist.

Hunt explained, “If you’re like the average Texan, you’ve lived in your home for six years. If you bought that home at Texas’ median price and sold it at the median price today, you’d earn a 9 percent return on investment. That kind of return makes my clients more than happy.”

Texas REALTORS® have launched a public awareness campaign to share facts like these and other truths about Texas real estate. Dubbed the “Ask a Texas REALTOR®” campaign, the details are available at TexasRealEstate.com.

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0 thoughts on “Realtor board makes 'shocking' announcement

  1. OF all the self-serving, greedy things to say! This is nothing more than an attempt to put money in the realtors’ pockets! Reminds me of the Wall Street mongers who caused the current economic crisis… why would anyone in their right mind sell their home today with values low {yes, they really are} and then run into problems getting financing for another home ’cause the banks aren’t lending {no, they aren’t—just ask any realtor}. Shame on this Board for such a stupid press release!!!

  2. Another quote from the report: “During 2008 homeowners lost $2.4 trillion of their housing wealth, which will continue to put significant stress on consumer balance sheets, particularly as job losses continue to grow. The geographic breadth of price declines rapidly expanded in the second half of 2008, which means that housing wealth losses are broadening across much of the country,” said Mark Fleming, Chief Economist for First American CoreLogic.

    Over at the Texas Real Estate site, Tom Kelly, an investment columnist, states: “For the housing market to recover, consistent valuation of homes must return and consumers need to feel confident that their purchase will not decline in value.” That certainly resonates with some of the concerns we had when we bought our house last month here in San Marcos. If we can get truly “smart growth” on track here in San Marcos, then the long-term view is relatively decent for buying a house.

  3. Umm, San Marcos does not equal Texas. I see a lot of houses on the market in San Marcos for months and months (some more than a year). I can’t say if property has appreciated 9% in San Marcos over the last 6 years. According to most of the city profiles I can find (http://www.city-data.com/city/San-Marcos-Texas.html) the median price was $120,000 to $140,000 in 2003 and it is $120,000 to $140,000 today.

    Assuming that our hypothetical buyers purchased at $120,000 in 2003 and sold at $140,000, they would make $20,000, except for that pesky commission. After they paid their realtor, they would take home about $11,500. Of course, they also probably paid about $5,000 in closing costs when they bought the house, so they really only made about $6,500. If they are going to buy another house, then they get to pay those closing costs again, so they end up with a tidy profit of $1,500 ($250 per year), minus whatever it costs them to move.

    If they didn’t buy at the low point six years ago and/or they didn’t sell at the recent highs, then the picture is not so rosy.

    If, by some misfortune, they bought at $160,000 in 2005/2006, they’re really hurting.

    In all cases, the realtor makes $7200 to $8400 (or two of them split it), so they’re pretty happy, I imagine.

    In Austin, the median price went from $200,000 to $250,000. In Dripping Springs, it went from $200,000 to $250,000. In Kyle, it went from $80-110,000 to $140,000. That’s 20-40% for those cities and 0-14% for San Marcos.

    Maybe the value that we as a city have placed on our neighborhoods and home ownership has manifested itself in the dollar value that others place on our homes. Smart growth and care for our existing neighborhoods would probably go a long way. More apartments, cashier jobs, litter and out of control rental properties will probably move us further behind.

  4. I agree that it may seem untrue but the comments in this article are valid. I purchased a home in 2002 for 118K and sold it in 2008 for 151K. I purchased another home in 2008 that was a foreclosure for 170K that the builder is still building today for 215K. The foreclosure for an investor from outside of Texas was an opportunity for a home buyer in Texas. The media rarely tells that story.

    I tried selling the first home without a realtor as I believed that realtors did not do much for the fee. I was wrong. After 6 months without a realtor, I hired one. The home sold in less than 45 days with tons of web sites listing and advertising by my realtor. Realtors are an vital part of the process.

    By the way, you forgot to mention what it would cost while a homeowner lives in the home that they do not pay for in rent. They financial institution had no trouble lending me the money for both homes.

  5. “Smart growth and care for our existing neighborhoods would probably go a long way. More apartments, cashier jobs, litter and out of control rental properties will probably move us further behind.” This is exactly right Ted.

  6. Armydad, I am glad you had a good experience. I’m assuming you are talking about San Marcos, although you don’t say.

    I don’t know the circumstances of your purchase, or the sale. I have no idea what may have contributed to the 28% increase in value. I only know that your case, while it may not be unique, does not line up with the overall numbers I found for overall home sales in San Marcos, nor does it line up with what SMABOR found.

    There will always be exceptions. You made 28% in 6 years. There are probably people who lost money and there are definitely people who were unable to sell (maybe because they would have lost money?). The real answer is probably somewhere in the middle, around 9-14%, which is what the SMABOR and other statistics show.

    That’s not an appreciable profit on $120 invested, once you pull out all of the other costs.

    You are correct about the cost of paying for two homes at once. While this is not always the case, if the person in my example had to pay for two houses for a month or two, the $1500 profit would quickly disappear.

    The bigger issue here, is that purchasing a home is a HUGE commitment to the community on behalf of the buyer. We’re sitting here debating whether or not people can afford to move away after 6 years, under fairly good economic conditions (9-14% appreciation is not that bad). Many people in the country are so far under water, that they won’t be able to afford to sell for many more years.

    So, the question is, what does it take to make people comfortable with that level of commitment; to buy a home here, instead of somewhere else? What would make someone think twice?

    My guess? 1) Jobs – If the prospective homebuyer can’t find a good job here and/or is concerned about finding another, in the event of a layoff, that is a huge consideration. 2) Schools – People will sacrifice a lot for their kids. If the schools are exemplary, parents will tolerate a lot of other problems, so that their kids can get a good education. 3) How the city treats and cares for those neighborhoods. Are neighborhoods clean, quiet and safe? Does the city have a history of re-zoning single family property to allow Wal-Mart to build a superstore, or is the integrity of neighborhoods a priority for City Council? 4) Word of mouth – how do the existing homeowners feel about their decisions to buy?

    I moved thirteen times in ten years, before I bought a home. Sometimes I moved because my situation changed. Sometimes I moved because of problems with the property or the neighborhood.

    Now, I’ve been in one place for eight years and I’ll probably be here for several more. My property values will be fine, if the city works to make sure that following in my footsteps is not taking a huge gamble (risking happiness and peace of mind, we well as money).

    The idea is not to have homeowners staring at the calendar, waiting for the day they can afford to sell.

  7. I think the purpose of the article is to show that Texas (including San Marcos) does not equal the rest of the nation. I think that homeowners need to be encouraged by local statistics (and statewide stats) so they know that it’s okay if they need to sell their home or want move to up. Yes, the lending industry is having some hard times and it makes it more difficult to purchase a home, but this is why it’s important to use a realtor. I agree with ARMYDAD and am glad he had a good experience as well. Realtors work hard for their money and his experience is an example of that. I am on home #3 in San Marcos and have walked away with money in my pocket on the last two transactions. Both homes appreciated by 10-14% in only 2 years.

  8. The city has to “pay” professors to live here. Why? Many Realtors are interested in selling the same house over and over, most likely to rental investors and parents of college students. The city clearly has little to no commitment to neighborhood integrity that Ted mentions. Zoning changes and policy decisions are made based on how much money can be made for the developer or how much it might cost landlords and to hell with the neighborhood. What positive impact will apartments at WW DR and Hunter have on the historic neighborhoods and don’t say less traffic…that is total BS. Cars morning, noon, and night to campus vs. grocery store that Willow Creekers would shop at. That is what people want.

  9. It was a huge decision for us to buy a home right now versus keeping the money in the bank. One of the reasons for our angst was the scars from last year selling our home of 16 years in Plano, where we had to lower the price 3 times and spend significant money on updating / upgrades before we finally found a buyer. As Ted said, purchasing a home is a HUGE commitment to the community by the buyer.

  10. I totally agree that buying a home is a major commitment to the community, which is one of the reasons behind down payment assistance for professors. We all know that there are some serious perception issues in San Marcos, so working together to educate our own citizens is the most important thing we can do in our community.

  11. Pingback: Information on Living in San Marcos, Texas | Land For Sale In San Antonio, Texas (TX)

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