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New listings are up this week, according to the Houston Association of REALTORS®’ Weekly Snapshot. 2,869 newly listed properties were added to the Multiple Listing Service (MLS) last week, an 11.7% year-over-year increase that indicates a healthy step in rebuilding housing inventory. Off-market listings also were also 25.3% higher. By Emily Marek October 05, 2022
October Residential Market Review: Courtesy of Har.com. Please click on the logo to learn more.
Sales of homes priced at $500K and above lead the way as inventory hits a two-year high
HOUSTON — (October 12, 2022)
Consumers kept the high end of the Houston housing market humming in September even as the market collectively continued transitioning to more normal, pre-pandemic levels. Sales overall were off for a sixth consecutive month due largely to the persistent lack of inventory and inflationary headwinds that include rising interest rates. However, the inventory landscape is showing signs of improvement for consumers as an uptick in new listings helped boost overall supply to its highest level in two years. According to the Houston Association of Realtors’ (HAR) September 2022 Market Update, single-family home sales fell 17.0 percent, with 7,664 units sold compared to 9,235 in September 2021. On a year-to-date basis, the market now trails 2021’s record-setting volume by 5.1 percent. The top sales volume performer was the $500,000 to $1 million housing segment, which rose 12.6 percent. The only other segment to remain in positive territory was $1M and above housing, which increased 7.2 percent. Many would-be homebuyers continued to turn to rental housing options in September. HAR will examine those trends in the September 2022 Rental Home Update, to be released next Wednesday, October 19. “The Houston housing market consists of many concurrent trends,” said HAR Chair Jennifer Wauhob with Better Homes and Gardens Real Estate Gary Greene. “The high end of the market continues to perform well, as is the rental market. But because of a lack of homes priced below $400,000, the market as a whole is slowing to levels we were accustomed to before the pandemic. The most encouraging news of all is the gradual build-back of inventory, which should yield more options for consumers going forward.”
Houston Real Estate Highlights in September
- Single-family home sales fell 17.0 percent year-over-year, the sixth consecutive decline of 2022 as the market continues toward a more normalized, pre-pandemic pace;
- Despite the overall sales volume decline, the high end of the market flourished with the $500,000 to $1M housing segment establishing itself as the top-performing segment in September, up 12.6 percent year-over-year;
- Days on Market (DOM) for single-family homes grew from 29 to 37 days;
- Total property sales were down 17.0 percent with 9,387 units sold;
- Total dollar volume was off 8.5 percent at $3.7 billion;
- The single-family average price rose 11.6 percent to $414,776;
- The single-family median price increased 14.7 percent to $343,950;
- Single-family home months of inventory registered a 2.7-months supply, up from 1.7 months a year earlier. That is the greatest inventory level since July of 2020;
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Analysis Shows Most Office Spaces, Even Fancy Ones, Are Vastly Underused
The return-to-office in the wake of the pandemic has happened in fits and starts, but a consistent theme is that offices are far less full than they once were. While building swipe data from Kastle Systems has shown that office occupancy nationally is still less than half of the pre-pandemic average, a new analysis by proptech firm Density shows how spaces inside the office themselves are being used — or, rather, hardly used at all.
Density analyzed 500,000 working hours in roughly 2,000 workplaces across 13 cities and found that 71% of office spaces can accommodate four times more users than they do today, it said in a release. Some anecdotal findings from the study: an $87K conference room that sat empty 80% of the time, 100-person social spaces largely used by just three people, and a 22-person meeting room usually occupied by a single person. The findings show that many of these spaces are primed to be either used differently going forward or redesigned. Density published the findings as it launched a new app, Density Atlas, that tracks office usage for corporate users measuring their RTO plans. “Buildings are broken. Historically, we have designed and used buildings based on observation, surveys and precedent,” Density CEO Andrew Farah said in a statement. “Many companies rely on outdated, anecdotal data — or no data at all — to make real estate decisions, despite it being their second biggest expense after payroll. That shouldn’t be acceptable in 2022.”
Density Atlas uses anonymous-by-design sensors to gather data on buildings and their real estate performances, Yahoo Finance reports. The technology mainly focuses on helping companies identify if their employees perform best in a focus space or a collaborative space. As companies continue to push their workers to come back to their desks with more frequency, the quality and design of office spaces has taken on greater importance. Newer buildings are drawing more and more office leases as older buildings, seen as less appealing for workers who can choose to stay at home, are facing a reckoning on their future.
Contact Alex Gratereaux at Alex.Gratereaux@bisnow.com
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Mortgage Points: Are They Worth Paying? By Brai Odion-Esene Contributor September 19, 2022
Mortgage discount points are portions of a borrower’s mortgage interest that they elect to pay upfront. By paying points upfront, borrowers are able to lower their interest rate for the term of their loan. If you plan to stay in your home for at least 10 to 15 years, then buying mortgage points may be worthwhile.
What Are Points on a Mortgage? Mortgage points represent a percentage of an underlying loan amount (one point equals 1% of the loan amount). Mortgage points are an additional upfront cost when you close on your loan, but they’re also a way for borrowers to negotiate a lower interest rate on their mortgage. For example, by paying upfront 1% of the total interest to be charged over the life of a loan, borrowers can typically unlock mortgage rates that are about 0.25% lower. It’s important to understand that points do not constitute a larger down payment. Instead, borrowers “buy” points from a lender for the right to a lower rate for the life of their loan. Buying points does not help you build equity in a property—you just save money on interest.
Origination Points vs. Discount Points There are two different types of mortgage points: origination points and discount points. Discount points represent prepaid interest that can be used to negotiate a lower interest rate for the term of a loan. Origination points, on the other hand, are lender fees that are charged for closing on a loan. Origination points don’t save borrowers money on interest, although they can sometimes be rolled into the balance of a loan and paid off over time. Discount points, however, have to be paid up front.
How Do Mortgage Points Work? When you apply for a loan and get approved, your lender will give you a loan offer. In your offer, the lender will typically offer you multiple rates, including a base rate, as well as lower rates that you can get if you purchase discount points. Those discount points represent interest that you’re repaying on your loan. If you decide to purchase points, you pay the lender a percentage of your loan amount at closing and, in exchange, you get a lower interest rate for the loan term. Typically, for every point you purchase, you get to lower your interest rate by 0.25%. Like normal mortgage interest that you pay over the life of your loan, mortgage points are typically tax-deductible. However, points are usually only used for fixed-rate loans. They’re available for adjustable-rate mortgages (ARMs), but when you buy them, they only lower your rate for your intro period—several years or longer—until the rate adjusts.
When Is Paying Points on a Mortgage Worth It? When you buy discount points, you decrease your monthly payment, but you increase the upfront cost of your loan. Due to the difference in monthly payments, it usually takes between five and 10 years to recoup the upfront cost of discount points. Instead of buying points, many borrowers instead choose to make larger down payments (or make extra payments on their mortgages) in order to build equity in their homes quicker and pay off their mortgages early, another way to save money on interest payments. Still, in some cases, buying points may be worthwhile, including when:
-You need to lower your monthly interest cost to make a mortgage more affordable
-Your credit score doesn’t qualify you for the lowest rates available
-You have extra money to put down and want the upfront tax deduction
-You plan to keep your home for a long time, so you may recoup the cost
Of course, this really only applies to discount points. Origination points, on the other hand, are closing costs paid to a lender in order to secure a loan. While these fees are sometimes negotiable, borrowers usually have no choice about whether to pay them in order to secure a loan.
Should I Buy Points on a Mortgage? You might want to pay points to get a lower interest rate if you have enough money upfront and want to save over the life of the loan. You might instead consider buying lender credits if you don’t have much money to pay upfront and want to save on monthly costs. However, if you don’t know how long you’ll be in the home, paying points or taking on a higher interest rate to receive lender credits might not be the best idea. You should ask your loan officer to show you two different options—with and without points or credits—and calculate the total costs over a few possible scenarios to see which is right for you.
October Texas Farm & Ranch News and Information: Courtesy of the Texas A&M Agricultural Law Blog. Please click on the logo to learn more.
As happens every August, the USDA released its Land Values Summary Report for 2022. [View Report here.] Not surprisingly, the report indicates increasing values nationwide over the past year. For “farm real estate value,” which takes into account the value of all land and buildings on farms, the US average value was $3,800, a 12% increase from last year. For cropland, the nationwide average value increased 14% to $5,050/acre. For pastureland, the nationwide average value was $1,650/acre, up 11.5% from last year.
Looking specifically at Texas:
- Farm real estate average value: $2,650/acre, an 11.3% increase from 2021.
- Cropland average value: $2,420/acre. This is up 12.6% from a year ago. This includes an irrigated average of $2,850 and non-irrigated average of $2,350.
- Pastureland average value: $2,050/acre, up almost 14%.
To view the entire report and see complete information for each state and region, click here.
Additional Resources: Here are a few references that we have found helpful in understanding our markets and economy…
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