IS IT A GOOD TIME TO PURCHASE REAL ESTATE?
November 30th, 2011 categories: About the Local Market
I was talking with a gentleman the other day who commented that he didn’t think he wanted to purchase at this time because he expected real estate values to continue to go down. That was his opinion, not mine and to be truthful, he said that because he had a net “zero” gain on the sale of his house. Truthfully sad … but I believe it is skewing his thinking.
Anyway .. it got me considering whether his reasoning (e.g., real estate is a bad investment right now) was accurate financially. I say that because I look at the real estate market right now and think the absolute opposite.
Prices are back to 2007-8 levels and interest rates are so DARN low right now (4.25% was the last quote I got for a 30 Year, fixed, 740 credit score, 80% LTV). In my mind, real estate seems to be an AWESOME investment right now!
There are two issues that need to be considered in looking at real estate as an investment:
First, what can I get for my money right now? Is that more or less than what I am expecting for the future? Most people translate that into monthly payment. If I only have $1000 per month to spend right now, how much can I get for that $1,000 now? How much will $1,000 per month get me in the future?Second, when the time comes for selling, will I make money or lose money when I get to the closing table?
My assumptions are:
Interest rates or at or near their lows. I am expecting interest rates to rise over time due mostly to the fact that prices generally are rising. Any one who buys groceries or gas on a regular basis knows that prices are increasing. I believe that we have artificially low rates right now. My assumption is a 2% increase in interest rates during the next 2 years. I don’t know that for sure, of course, but that is my assumption. Also, as interest rates increase, prices will also increase. Historically, that is what happens in real estate.
Let’s look at an example:
For a $100,000 home loan, a 2% interest rate increase (from 4.25% to 6.25%) would cause the principal and interest payment to rise from $491.93 to $615.71 per month. That is equivalent to a 25% higher monthly payment meaning that I will have to pay MORE for the same house in the future.
To keep the current monthly payment of $491.93 even though the rates are higher, you would only be able to afford a $80,000 home loan. That is 20% less house. OUCH!
Annually, the outlay from the higher payment would be about $1500. In 2 years, that would be equivalent to $3,000 more in payments. Thus, if you look at these figures by themselves, it would seem that you would “lose” so to speak with real estate if you are expecting prices to drop by more than 3.00% during that 2 year period … let’s say 5%. So, if I am expecting the sales price to be $95,000 in two years, I would have lost a net $2,000. Is that right?
My answer is DEFINITELY NO!!! What you must keep in mind, however, is: What could YOU buy in 2 years if you kept your $100,000?
First, just as an aside, you would have not had any ownership in a home. No tax benefits! Just lease payments which are higher than they have been in a long time.
Second, if you still only have $491.93 per month to spend on principal and interest, you would only be able to afford an $80,000 house. Even if you compare that with the $95,000 you THINK you would have sold your house for, that’s an 18% loss. Doesn’t sound like a wise choice financially! Also, as I stated earlier, historically, home prices usually rise as interest rates rise. So, what you could afford, probably would be even less than the $80,000.
For those who invested in the last 4 years, there truly has been a big hit! No question there! What needs to be kept in mind is the reason for that hit … the housing bubble and stupid mortgage practices. You know the old saying … Hindsight is 20/20. It would have been great if we all knew that the bubble was going to pop.
Historically, real estate has been a great investment. Right now, we have this amazing phenomenon of having both low interest rates and low prices. We feel like it is an AWESOME time to invest in real estate and hope that this analysis will get you thinking along the same lines as well.
To find out what is on the market right now, return to the main page and choose your search area. We’d love to help you invest in the Texas Hill Country. Our number is 830-995-2511.
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SPACIOUS HOME IN SOUTHERN OAKS – $319,900 Reduced!
June 24th, 2011 categories: Featured Properties
Come see this spacious Hill Country Home on 3 acres just outside Boerne in the Southern Oaks subdivision community. Very large home priced at a bargain at $95/ft. Sellers have made substantial improvements: Fresh paint in and out, wood floors in living, new roof (2010) etc. Home is very large with 4 beds, 2.5 baths plus office + game room + bonus room that needs finishing touches (just needs texturing and carpet). Master and office downstairs and 3 bedrooms up. Spacious Kitchen + porch for outdoor dining.
Ceramic Tile downstairs. Nice views. Decks on 2 levels. Fully fenced back yard. Shows well. Reduced! Great place to call Home! 830-995-2511
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HARD TO FIND “BUILDABLE LOT” IN COMFORT – REDUCED TO $39,000
May 24th, 2011 categories: Featured Properties
Come check out this hard to find “buildable” lot in Comfort. End of road privacy and within walking distance of downtown and Cypress Creek. Property is in the flood fringe area and requires raised foundation. Adjacent lot is built on … so you can see the possibilities.
Lot is in Kendall County Water Control District so public water and sewer is available. Tap fee applies. Minimal restrictions. Contact Julie for more information. 830-995-2511
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KENDALL COUNTY REAL ESTATE SALES SHOWING IMPROVEMENT – JAN-APR (2007-2011)
May 11th, 2011 categories: About the Local Market, Assessing the Local Market
Residential Real Estate Sales for the first 4 months of 2011 improved slightly over last year. 84 Sales vs. 81 last year. Also showing improvement was average sales price which increased from $314,055 to $319,152.
2007 was the height of the market. The market is currently down about 40% from that point. Sales are taking more than twice the time to sell and are selling at a deeper discount from original list price than that time period.
Thankfully, the sales curve is finally on an upswing. We have noticed that the number of distressed properties are decreasing. Inventory, however, is increasing daily.
It will be interesting to see how this year plays out … whether sales will grow stronger and eat up the inventory or whether inventory will not be absorbed and a “glut” by year end will create more distress situations. We remain optimistic … but are ever watching the market to stay abreast of the situation. For all of your real estate needs, give us a call.
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SLIGHT INCREASE IN REAL ESTATE SALES IN KERR COUNTY FOR FIRST 5 MONTHS OF THE YEAR
June 4th, 2010 categories: About the Local Market, Assessing the Local Market
So far this year, Real Estate sales in Kerr County are slightly up from last year; however, way down from 2008. Total sales in Kerr County for January to May 2010 totaled $33.8 Million. There were 186 sales.
The average home price in 2008 was $220,921; in 2009, it was $223,123, and in 2010, it was $199,996. Those figures, in our opinion, represent what we have been seeing happen. In 2008, sales were still strong and prices were at their height. In 2009, sales were off, but prices were not coming down like one would expect. During 2010, prices are definitely lower. We have been telling our clients that prices are down by about 10%. These figures substantiate that information.
We feel like it is a really good time to buy. Prices are down and interest rates are still low. If you have been sitting on the sidelines waiting for the right time, now is the time to jump in! Give us a call. We’d love to help you find what YOU are looking for.
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COMFORT, TEXAS – 2009 REAL ESTATE FIGURES SOUND GOOD???
January 5th, 2010 categories: About the Local Market, Assessing the Local Market
Believe it or not … Real estates sales in Comfort, Texas were actually up for the year! Two categories – Residential and Farm/Ranch were up. Two categories – Acreage/Lots and Commercial were down.
In a small market, a few sales can make a real difference. In the residential market, the average price per item sold increased 42% from $247,833 to $352,887. What that means is that not only were there 2 more sales in 2009 (20 vs. 18) but the properties that sold were considerably more expensive. That is not due to price increases but instead, the properties that sold were higher end. That continues the trend in this area during the economic downturn. It is the higher priced properties that have continued to sell. 7 of the 20 residential properties that sold were $500,000 and up. In the Farm/Ranch category, one ranch sale (at $1,530,329) accounted for the lion’s share of the increase.
What does this mean about the market? An improving market is at work. Our observations are:
- Sellers have realized that they need to be more realistic in their pricing.
- People’s perception about the economy is improving.
- Expectations of inflation makes real estate a “safe” investment.
We do our best to provide you with the best information available so that you can make an informed decision whether you are a buyer or seller.
We strive to help our sellers price their properties competitively so that they get SOLD. In the current market, that is especially important so we can really HELP you!
If you are a buyer, we are currently aware of several “real buys.” Call for more information.
Each person’s scenario is unique. We’d love to help you with yours.
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PRICEY HOME SALES IN BOERNE CONTRIBUTED TO STELLAR SALES FIGURES FOR JANUARY & FEBRUARY
March 5th, 2009 categories: About the Local Market, Assessing the Local Market
Four home sales totaling $7.1 Million contributed to better than average sales figures for the Boerne area during the months of January and February. One might actually use the word, “STELLAR” if comparing these statistics with the national market .
All in all, there were a total of 40 sales that amounted to $17 Million during the months of January and February as compared with 59 sales totalling $18.7 Million during the same time period the previous year.
Based on these figures, it appears that the Boerne market may be on the road to recovery. Good news for anyone that has been sitting on the fence waiting for the market to recover before placing their home on the market. If that’s you, give us a call and we’d be happy to give you a free market analysis for your home.
And, if you are interested in buying in the Boerne area, we’d love to represent you. Our number is 830-995-2511.
Our encouragement to you in this market: Get good advice! Move in peace! Live in Freedom!
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Comfort/Center Point Ranches & Acreages > 30 Acres (As of 5/2/8)
May 5th, 2008 categories: About the Local Market, Assessing the Local Market
Here is a list of Ranches/Large Acreages currently on the market.
Price/SF/Acreage/$Acre/Comments
Compiled from San Antonio and Kerrville MLS systems as of 05/02/08
We compile this list as a special service for all of our clients who are watching the Comfort/Center Point Real Estate Market. If you would like more information about any of these listings or would like to know how we could serve you as your full service Realtor, please contact Julie Quest-Brooks at 210-535-9463. We’d love to get to know you better.
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Looking for Acreage (under 30 Acres) to Build on in the Comfort Area?
May 5th, 2008 categories: About the Local Market, Assessing the Local Market
Here is a list of what’s on the Market in the Comfort/Center Point Area under 30 Acres:
Price/Acreage/Subdivision-Comments
Compiled from San Antonio and Kerrville MLS systems as of 05/02/08
We compile this list as a special service for all of our clients who are watching the Comfort/Center Point Real Estate Market. If you would like more information about any of these listings or would like to know how we could serve you as your full service Realtor, please contact Julie Quest-Brooks at 210-535-9463. We’d love to get to know you better.
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Center Point Residential Market (as of 5/2/8)
May 5th, 2008 categories: About the Local Market, Assessing the Local Market
What’s on the Market (Residential) in Center Point?
Price/Bed/Bath/Acreage/SF/Brief Description
Compiled from San Antonio and Kerrville MLS systems as of 05/02/08
We compile this list as a special service for all of our clients who are watching the Center Point Residential Market. If you would like more information about any of these listings or would like to know how we could serve you as your full service Realtor, please contact Julie Quest-Brooks at 210-535-9463. We’d love to get to know you better.
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