Last night, over dinner and drinks during a show at the Mucky Duck, I discussed part of the problems facing the police associated with real estate in Houston. My dinner companion works for the Sheriff’s department, so he had some good insights on his side. I brought my knowledge of what I see when inspecting foreclosures. We both recognized that there are problems which cannot be readily solved; however, I do see where Houston is taking steps to deal with crime or other problems that a community could face due to real estate trends. You may think that foreclosures may be the only problem, but increased rental properties could be another. (Renters care less for their living spaces than owners do).

Would you want to buy a lot in Houston for $1? I would love to buy land that cheap, but I am misleading a bit. The Land Assemblage Redevelopment Authority (LARA) with the City of Houston is selling land that cheap to qualified builders. There goes my dreams of building a real estate empire at a discount. This is a program that I hope works. The idea is to take vacant properties to ensure that they will be used to create affordable homes. Families will be able to purchase a new home, while the community benefits from having one less place for the unsavory to hang out. By owning the home, the new homeowners are more likely to invest in that house and the community, which is a great deterrent to crime. If you are a builder, maybe you should check out the facts for yourself.

Vacant homes can present a community with the threat of arson. The last two foreclosures that I inspected did have fires at one point, though they may not have been subject to arson. It is amazing how many signs of fires I do see during my home inspections. The best way for a neighborhood to stop arsonists or vandals is to create a community watch program. If Houston has not taken over the land for the project mentioned above, neighbors should get together to take care of the landscape around a foreclosure if no one else is. Of course, making the lender who foreclosed is best, but to protect yourself and the value of your real estate, you should ensure that vacant homes do not look to empty. The Houston Fire Department offers tips on home safety but also on arson prevention on their site.

The other method for deterring crime is to show that the city cares about our communities. Houston’s Capital Improvements Projects are being discussed now for the coming year. I know that there will be a meeting on Tuesday (2/17/09) night from 6:30 to 8:30 pm at the Tracy Gee Community Center. I hope to attend. I wish that I knew about the project on Lexington. I would not have driven down that street then . You can find information about your area by doing a little digging on Houston’s e-government site. The main page for the CIP lists projects in categories, so just look through some topics there.

In other Houston news: are you ready for the dtv transition?We were to have are set top converter boxes in place by 2/17, or maybe even a new hdtv. The new date is June 12, 2009. Personally, I am one of those who was going to let two of my three televisions go dark. I would rather read to my children and play with them than have everyone sit in front of their own television. The city has a site for applying for a coupon to obtain the dtv converter box. I do not know how many are available through this program. I know we have to wait on the Federal program though. If you are going to be like me, then you will want to recycle that television. DO NOT LEAVE A TELEVISION OR MONITOR AT THE CURB; it will not be recycled. Follow this link to discover how these items can be dropped off, so they do not have the chance to harm our environment.

Houston real estate sales are doing well enough, but we do have to watch out for our neighbors if we want to begin turning the tide on crime. Maybe by loosing my televisions, I will spend more time talking to the residents of my community.

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Business moves on. We see more firms in the real estate industry facing difficulties, but I noticed that many other businesses are being effected by our current economic climate. I was surprised to see a number of websites up for sale, mainly because they were not making the money that the owners expected. Yet we have to find a way to continue with our daily lives.

In the midst of this, we are finding that banks are going under, and other businesses are looking to the basics. We may see some new business models come about. I have heard from more Realtors who are questioning the usefulness of their corporate offices. Why share the commission, if the firms are not helping them appears to be the feeling. On that subject, I always thought that the book Freakonomics had it right. If you have a chance you should read the authors’ blog. It opens your eyes.

Rick Aster writes an article going over Franklin Bank being acquired by Prosperity Bank (both banks from Houston) after the FDIC had to step in. The post gives an overview of the nation.

Paloma Contreras shares an article from Ken Brand about what you should expect from a Realtor helping you find your new home. It is a good guide to show you what services they should be providing.

Here is a post going over what is happening in one specific neighborhood , Glen Bay, in Clear Lake. It is interesting to see these figures. Yes all real estate is local, and you can have local real estate go down to the neighborhood level.

The Houston Downtown Alliance has released a statement that registration is open for its tour to show people what living in our downtown is like. Alright, the end of the registration is in March of next year, but since it has been released, I decided to create the link.

Enjoy the read!

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How is the real estate business faring? The jobs report this week showed that more workers have lost their jobs, and I am sure if I looked into it, you could find that real estate professionals are dropping like flies. My own business has been good, but not where I want it. Even though my costs are going up, I have people trying to get me to lower my prices (which are already reasonable compared to other inspectors). Ike rained on housing sales in an already slowing market.

In the midst of this situation, we are finding news which focuses on the positive as wells as news that does not bode too well. Here are blog posts and news releases for this week.

Press release from the Dallas Fed going over some highlights of reports in Southwest Economy (to which a link is provided). It is mentioned that the Spotlight section discusses the fact that commercial sales are slowing in Texas.

As many are trying to avoid being forced from their homes, HUD modernizes its online guide for avoiding foreclosure. This press release contains the link.

Houston Housing Market Blog produced an article about good economic news for our area based upon some information produced at Texas A&M.

Here is a report from an Austin Realtor relating some details of a study about the housing market. The bottom is predicted to hit in 2009, while a rebound is thought to be in 2010. It did mention that investing in apartments or warehouses in Houston may not be a bad idea.

Happy Reading!

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This past week found me doing more home inspections for people who are not selling or buying a home. They simply want to understand the condition of the home, or they wanted to check on repairs made by a contractor. I have had a few calls from other inspectors pretending to be potential clients to check my prices, but not many calls from real potential buyers or sellers.

This week saw some good articles being produced. I really liked the statistics that Ken Brand’s post provides, because he explains what they mean, and Paige Martin’s post hits the nail on the head when it comes to looking at why a slow down is occurring in our market. Well read through all the posts, if you want a good view of the Houston real estate market.

Jill Wente takes on the topic of finding homes on the web. Where can you go to find the most homes listed? Actually, this is a tricky question. Homes listed through a Realtor will be in the MLS, so going through a Realtor is your best bet, but as pointed out in the comments, Zillow has made great progress with its API for industry professionals and search technologies on its own site. However, you may also need to consider that not all homes sold are listed in the MLS. For sale by owner is quite strong.

Ken Brand gives a good synopsis of the real estate market in The Woodlands. The introduction is standard fare of things we have heard before, so please keep reading down to where he presents facts about the market. He offers concrete advice there for sellers.

Another post from Active Rain from another Woodlands are Realtor, Stephanie Edwards-Musa reviews the Houston Solar Tour. There is a nice slide show for you to check out what is happening with solar in this community.

Here is a post by a J. Kim going over buying or selling a home in Houston Texas. It mainly deals with the types listing contracts, and what they mean to you. A brief post, but an interesting read.

Paige Martin seems to post regularly on market in Houston, and this post takes a look at what is happening in the mortgage industry. Banks may have tightened rules too much so not many are able to obtain a home loan.

Have a good week.

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Maybe I am being overdramatic with the title of this post, but several factors have led me to believe that the housing crisis is so deep that we need to address the housing problems in this city, while also focusing on areas where foreclosures are more prevalent. If you have read blogs or news feeds during this past year, you may have seen articles that dealt with the fact that Houston has a great market for real estate, so where are the sales?

Consider the real estate market in Houston. Our home values are steadily increasing (we had a downturn in the late eighties, so we did not experience such a housing bubble). The energy industry is expanding, which means we have an influx of workers into the town to either be employed by such firms or to start businesses which cater to these firms. The city has programs in place to encourage homeownership. In fact, we have a large community that probably would love to live in homes, but who do not as a group have high homeownership rates (I am referring to Latinos, who now are the largest ethnic group in our city). An additional fact that bodes well is that immigrants do not take national economic factors into consideration when buying a home, because it is such a part of the American dream (although, I should point out that the immigrant portion of the Latino community would be only a fraction of the whole).

With these positives, why are sales declining more than expected? The mantra from Realtor Associations this year has been “all real estate is local”. Now the association in Houston is telling Realtors should take the local mantra down to the neighborhood level. Meaning that maybe we cannot say Houston is alright, but we should say that Westchase is alright. Here are factors that I feel are preventing sales in Houston:

1. Personal financial habits of buyers- to live a certain life style, we consumers chose to take on various degrees of debt, but we looked for ways to live that did not require an effort on our part, like saving money towards our goals. We simply do not have the savings to make the down payments to obtain affordable mortgages. This will not be resolved till we consumers adjust our life styles so that we can save.

   
   

2. Our dream homes- home sizes (square footage) have been becoming ever larger. To accommodate this trend we have been building homes further out of the city. Square footage will be coming down to make houses more affordable. We are currently near 2600 sq ft, and I think that we will head down to around 1800 sq ft. Houston and Harris county have plans for improving public transportation systems, but they may need to expand the scope of these routes, and they will have to develop means that can be quickly implemented to meet current needs (such as busses that move people from transit area to transit area only, and more transit areas). We will also have to look at viable townhomes in the city center.

   
   

3. Rules ensuring that lenders behave- there are difficulties in obtaining mortgages. Yes, lenders are still providing loans, but they are increasingly hard to obtain. We need a temporary plan to allow borrowers some leniency in obtaining affordable loans that will produce a benefit to both lender and borrower, but I think this means that lenders cannot expect to make profits from the borrower at every turn, while borrowers must realize that they will be vetted.

   
   

These are three basic steps that need to evolve, and they are meant to compliment ideas on how to resolve the economic downturn. What do you think should be added to this list? Green homes for reducing utility costs. We will see.

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What is happening on the Houston real estate scene? I am seeing sites with more listings, but Realtors for the most part are discussing movies and road trips on local blogs. There are a few blogs touting that the Houston real estate market as a great one for investment, but these seem to be taking the party line that has already been said before. The Houston Association of Realtors has released some disappointing sales figures, which was to be expected, with the bright spot still being median home prices in Houston continue to rise. Maybe this weekend’s Realtor Expo will inspire some Realtors to go out and convince the public to buy a home (then maybe I can work more).

Business is slower for me, but I have been inspecting foreclosures that investors or families want to purchase, so I have kept busy enough (not bad, but not great).When looking for views on the real estate market this week in blogs, I did not find much, but there were two interesting posts that I think may prove useful for investors and home buyers alike.

Aimee Hess is a real estate attorney who posted this eight point summary of the criteria for a real estate recovery presented by Dr. Mark Dotzour. Ms. Hess’ post is a good primer on what needs to happen in the market, but she also provides a link for those wanting more information.

The Balthorpe Group released this information about Texas apartment construction. If you wish to find out about the Houston market, scroll down the page. For me this is interesting since it implies that many are turning towards apartment living instead of home ownership. I can only say that I have not witnessed new construction for apartments beginning, but I have seen projects coming to completion. The slow down in residential building is not taking place in this commercial sector based on my driving around town.

Hopefully next week there will be more blog posts that actually provide good information on Houston real estate.

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Market analysis reports for Houston real estate cannot present a great picture at the current time when you take in the fact that on top of the current financial crisis and Hurricane Ike have taken their toll on us. HAR had released a statement to the press that the number of homes destroyed or damaged by the hurricane will have effects on the real estate market for some time to come. Looking at some market analysis reports from some sites this week will show you that maybe some areas are not that bad (or at least there are ways to deal with the current market).

What is happening with home sales in South Katy? Robert Gilbert discusses the “Hotness” rating, and how it shows that this area is doing well. He defines the rating by the following statement:

This specific "Hotness" rating refers to the number of pending sales ( buyer demand) that occurred during a given month in relation to its active inventory ( homes currently on the market for sale).

Jill Wente deals with the effects of the hurricane in her market analysis of Spring Texas. The statement which struck home to me was about sellers not accepting low ball offers. Having been involved in some transactions on the sellers side recently, I saw buyers demand $20,000 off when the original offering price was already $20,000 off of asking. They were honestly surprised when the sellers had refused. Another buyer came back with a lower offer claiming it a better deal for the seller, when the seller had informed them that they would not go lower than a certain amount. These buyers were also shocked that they did not succeed. I think their Realtors should have better informed them through the negotiation process.

Jeremy Williams demonstrates how his firm uses the number of months it will take to deplete inventory of homes to develop a sales price for a home in his north east area of Houston. He goes through some typical home prices for this part of town.

Here is a quick report referencing an article in Bizjournals from Houston Real Estate Daily on the fact that Freddie Mac is holding off on foreclosure sales due to Hurricane Ike.

Paloma Contreras gives us the scoop on an issue related to Houston real estate: the new GPA calculations for our area schools. Real estate professionals frequently watch what is happening in area schools (as well as participating in area schools), because we know that this is an important factor to many buyers. I have known people to move from one part of town to another just so their children will attend certain schools. This post focuses on KatyISD.

Well, there are a few of the best posts dealing directly with Houston Real Estate for this past week. Now I need to go and check how much money I lost in stocks to see if I can afford that new investment property still .

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This is one of those “I wish that I had acted upon that idea” moments. I am trying to remember the commercial where it shows people saying that they invented something, but they never did anything about it, so they could have been a millionaire. Two years ago when I was considering the real estate business model and how it operates in Houston, I began dreaming up ways to make it more efficient. I floated the idea of a place which incorporated all of the needs that should be met for a home buyer or a home seller. I imagined a relaxed environment where people did not mind.

When, during the course of doing home inspections around Houston, I floated the idea to some Realtors, I generally obtained the response that this was against the law in Texas. I knew of no such law. I did know that some real estate firms had a rule against it though due to possible liability issues. I was also aware that there is a belief among some Realtors that Texas law states that they cannot suggest one home inspector alone to a client, which is actually a false rumor. When typing in a list of keywords to see what would show up on the results page, I was surprised to see that my idea has been carried out in one form or another. There are several firms which will take you through the process, so you do to have to worry about arranging any of the details. Of course these firms developed the idea on their own, so I will make no claims to be the inventor.

Is this a benefit for the consumer? This really boils down to how much service is provided at what cost. Navigating the real estate market can be tricky, but sites like mine or even better a Trulia or Zillow are providing the education that a consumer needs to be a more informed consumer. This aspect of the internet will only continue to grow as communication between the real estate industry and the consumer expands on the web. Although many consumers may have the knowledge to take steps by themselves, quite a few simply will not want to research facts, so they would be willing to pay someone to guide them through the transaction.

On one site, I saw the word free being used a lot. If the consumer accepted the idea that many services were free, they could believe that they were getting a great deal. However, do you think that all of those service people from inspectors to surveyors to appraisers will work for free? The cost is being placed in the percentage of the sale that the broker obtains from a transaction. Let us consider a breakdown of what the broker earns. If two Realtors are involved in the sale of the home, they will be splitting around 6% commission. Alright, so the one stop shop broker now has 3% of the value of the home. If he is part of a national firm, 1% could go to the corporate offices, .5% to his offices, another .5% to cover office paperwork and marketing, and then 1% to the agent working on commission. I am going by rough estimates here for ease.

Looking at those numbers, a firm could exist outside of a national business (many do). That leaves 1% up in the air. The average sales price in Houston is around $160,000 (I am rounding this off for the math again). The one percent is $1600. This amount is more than enough to cover the home inspector, an appraiser (with a desk appraisal), and the surveyor (possibly even a few more service contractors). In fact, those fees could be reduced.

What if I did not need to spend money to maintain an office or any other costs associated with operating my business? If this brokerage has worked out a deal with me that all of the home inspections required by his agents went through me to the extent that I would not need to find other customers, I could reduce my costs, and thereby lower my price. Other contractors could do the same. Here is where a clever one stop real estate shop could be a benefit to the consumer: if the certain office/marketing costs are taken out of the equation, the cost to the consumer could be lowered by the broker taking a lower commission. In a way, this plays on the idea of economies of scale which internet brokerages are already using to reduce the expense to their clients.

Not bad if it works out that way. Currently, internet users have an advantage which they need to leverage more, and that is using the web to find the best service for the best price. Studies show that most buyers and sellers are heading to the web for information, but they also show that many of these people still only contact one Realtor, who guides them to a specific contractor, so savings are not obtainable, because they are not acting upon the information which they now posses. It will be intriguing to watch this development in Houston real estate, where it may do well, since we are fairing better than many markets.

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Recently, I have been reading different blog carnivals on various topics, but I have focused on the topic of real estate since I participated in one. It is an interesting way to see a cross section of thoughts on the web. One issue that I see with many blogs is that their authors are not really trying to expand a conversation with a wider audience. Most seem to be promoting their business or focusing on why their services are important, which to me misses the point of a blog.

There are many good sites detailing what is happening in Houston, but I was curious about Houston real estate. I thought that there might be enough material for a blog carnival on this topic, which might be of benefit to the consumer in this area. For the past week, I diligently searched each day. Here is what I came up with; my own version of a carnival.

Some House Hunters Are Getting Cold Feet- Following the travails of one potential buyer of a home in Houston, you get a look at the situation here from Houston Texas Real Estate Daily.

Hurrican Ike Meets Bubba- part of the economic health of any city relies upon the activity in the residential and commercial real estate markets. Ike offered a chance for some intrepid entrepreneurs to come to the city to help clean up. This leads Ed Ayres to look at the commercial market.

Houston Real Estate October- On the paige-martin blog, we get an overview of the flipside to the commercial market, residential real estate. She looks at the bail out package and what is happening in general which may be of concern to the consumer.

Are granite countertops a threat? Alright, this has nothing to do with Houston real estate as such, but I have a reason for adding this report. The New York Times did a report on radon being emitted from granite counters in kitchens. After that report, KUHF interviewed a group mentioning that they were setting up testing in Houston, and that this should be considered a real threat. In the interview, they did mention that they had not found many counters to be concerned about. Now I challenge you to find a radon test kit at any hardware/home improvement store in Houston. Odds are that you will not find one. This idea has been on some consumers mind, so I thought they should read this article.

Maybe there will be enough interesting posts to continue this carnival next week. We will see.

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Do you use Firefox as your browser? There is an option to see related links to the site that you are viewing. It is a great little tool to explore a general topic from different perspectives. If you are interested in financial sites, you can find others which may be similar to the one that you are reading. Personally, I was looking at other networking sites for real estate professionals, because I was curious to see how this is being handled on the web.

I do not know what possessed me, but I decided to look at what the related links to my site would be. I had been analyzing some aspects to my site, and I was looking at my favorite blogs to find how they may have handled my concerns, so I was in an analytical mind set any way. With the expectation of finding new sites similar to my own, I clicked on the related links to find….nothing. Maybe the site had not fully loaded, so I tried again. Still nothing. Alright, I know that there are home inspectors writing blogs out there, and if a visitor ends up here, they may be interested in other home inspection blogs. Thinking of my civic duty, I am creating my own related links for this blog. Please enjoy these sites. Some of the writers on this list are friends, others I have read on occasion, but I think all would be useful to you.

Kevin Corsa: http://activerain.com/blogs/akronhomeinspector

Dale Baker:http://activerain.com/bakerhome

Michael Thornton: http://blogs.chiblogs.com/

Carl Winters: http://www.webspawner.com/users/realestateinspector/

Charles Buell: http://www.buellinspections.com/

SteveBellingham: http://www.kingofthehouse.com/

I hope you enjoy this bit of link love.

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