TheMReport — News and strategies for the evolving mortgage marketplace.
Issue link: http://digital.themreport.com/i/134983
local edition S e c on da r y M a r k e t a na ly t ic s se r v ic i ng or ig i nat ion ANALYTICS looks to be even stronger. We've heard a lot about the growth of Texas and now we're starting to really see the impact on our real estate market," said chairman Shad Bogany. According to the report, 53,937 single-family homes were sold in the Lone Star State during the first quarter, a 17.5 percent increase over the same quarter last year. Of the 48 markets included in the report, 40 posted increases in sales, indicating a broad-based surge. The median price for Texas homes also increased, growing 7 percent to $158,000. Median prices in Texas have risen on a year-over-year basis since the quarterly report began in 2009. "Historically, the median price for Texas homes has increased about 4 percent each year, and we usually see the biggest jump in price between the first and second quarters," said Jim Gaines, Ph.D., economist with the Real Estate Center at Texas A&M University. "So, with price increases already in the range of 7 percent in the first quarter, we could see Texas homes increase in value significantly this year." In the same time frame, the average price was $204,718, about 6.9 percent higher year-over-year. The market averaged 4.2 months of inventory in the first quarter, a drop of 1.7 months from the prior year and significantly less than the 6.5 month figure cited by the Real Estate Center as a balanced market. "There is clearly demand for Texas homes, and rising prices are encouraging more homeowners to consider listing their properties. However, if a homeowner wants to move up, they must be able to find a property to move to, so more supply is needed to capture the growth potential in the market," Gaines said. While inventory remains a concern, Gaines expressed confidence that Texas' housing recovery is based on a solid foundation. "In the coming months, I expect we'll start to hear national news reports about increasing 66 | The M Report sales in other markets, possibly exceeding those in Texas. That's because other markets boomed in the mid-2000s and busted in the late 2000s, meaning they need dramatic increases in sales volume and price to recover," he explained. "I call that an 'echo boom' and it's more indicative of market fluctuations than fundamentals. Gaines continued: "That never happened in Texas, so the increases you're seeing in our state are indicative of true increases in demand, driven by population growth. Assuming we continue to add jobs as we have recently, that will make our increases more sustainable." Go Green for Good Houston homebuilders see the bonanza of benefits from eco-built abodes. TEXAS // As the nation looks for ways to minimize its impact on the environment, one Houston-based developer is predicting the "green home trend" will eclipse traditional building practices by the year 2020. As evidence for his forecast, Colin Shelton, president of Southland Homes of Texas, points to growing green practices in the Houston area: owners choosing to build in existing neighborhoods instead of new land, builders choosing locally sourced or reclaimed lumber, and tankless water heaters, to name a few. "Decades ago, our ideas of what made a building environmentally friendly were pretty narrow," Shelton said. "Thanks to over $51 billion in green stimulus spending, the research has evolved, the technology has evolved, and so has the mindset of consumers. There are so many more ways to build and renovate green homes that soon green building will become the norm." Shelton also points out the growing affordability of green technology, allowing more homebuyers and builders to make sustainable choices. "Houston and Dallas topped the list of cities with the most expensive power bills," he said. "We're not surprised that these areas and the surrounding suburbs are full of homeowners who are looking to make their homes more energy-efficient." Another factor drawing investment in sustainable building projects is the U.S. Green Building Council's new Leadership in Energy and Environment Design (LEED) program, which offers thirdparty verification of green buildings (enabling owners to receive government certification that the green features they've paid for were properly installed). "Homeowners today don't just have access to green products and prices. They also have a government-backed system in place that lets them trust in the decisions they make and the builders they choose. That's a big thing," Shelton said. "It's one of the reasons we know that demand for green homes will only continue to grow."