As the end of the year approaches, I am thinking of the trends that I noticed in Houston real estate.
Maybe the tales of a Houston home inspector are not the standard for examining real estate trends, yet I feel that the year has shown positive signs. A few neighbors have asked me about my business outlook. Perhaps this is a way to judge if they should go into the market with their own home. That could be the first trend which I noticed: the hesitant seller. There are people who want to move, but they are waiting until the market appears better for sellers. The interesting aspect of this trend for home inspectors has been sellers wanting their homes inspected to deal with issues before a buyer comes into the picture. When looking back at this year, I can say that it has been a good year for me, but not all real estate professionals. This leads me to consider other trends.
Is that home inspector still in business? That real estate agent? The real estate industry might consist of more part time employees than other industries. You could have a job, and you could perform home inspections on your days off. I have seen appraisers do the same. I see people begin their careers as a real estate agents while still working another job. This is what makes the real estate industry a great industry for many. You can earn extra income. You can build your business while still having security. However, when the real estate market is bad, you do loose people. I have encountered home inspectors, as well as agents, who were full time going out of business. Mainly, I find people starting new business ventures to supplement their real estate business. I found my business increasing, so I did not have the time for a new business. I found other real estate professionals in my situation. We focused our business, and we found an increase when others complained how bad the market is. Basically, the firms left standing are doing business better.
The buyer wants to spend their money wisely, and the real estate industry is responding. Sometimes I feel that professionals in my industry are paying lip service to the idea of providing value, but we are see changes that do help the consumer. Even before 2008, the consumer was gaining more information through the internet. Smarter consumers force businesses to be smarter. Builders are constructing more efficient homes, which consumers see as a better value. Some real estate firms are letting consumers pick and choose what they want in the way of service, instead of simply charging them for everything. The consumer may be looking for the lowest price, but they do want to ensure that they are not cutting the corners too much. The recession added the information wise consumer more budget conscious, which means even more pressure on real estate professionals to do the job right.
Green is better. This is not a surprise: consumers are considering value, and they are considering the cost of living in the home. The vague concept of a green home is linked to the concept of value. Vague? Yes, vague. There are different standards for defining a green home. Terms like “EnergyStar” and “LEED” carry a good deal of weight. The consumer is well aware of the EnergyStar brand, but honestly, the consumer does not understand many issues that people are using to define an energy efficient home, since all of this is new. I thought everyone understood R-value in relation to the insulation in their homes, till I began lecturing homeowners on energy efficiency. At this time the consumer wants an energy efficient home, but as the information becomes more available to them, we will see more focus of clarifying what green means.
Do I need a home inspector or energy rater? Home inspectors have become a fairly standard part of the home buying process. I had a good percentage of clients who did not use real estate agents this past year. (There were other clients who had agents, but the agents hardly seemed involved from my perspective). The home inspection became important, because the inspection was a way to ensure value. As the consumer begins to include the cost of living in a home into their purchase calculations, they are looking for ways to discover that data prior to the purchase. Energy raters may fill this need. I noticed more home inspectors are going after this certification. I am not sure that this will become the consistent choice of the consumer any time soon. Cost is still a driving factor for the consumer, and even though having inspections of your purchase helps ensure value, there comes a point where the cost of these inspections is too great for the average consumer. There is also a question of return on investment. Having good professionals conduct these investigations will uncover problems to save you money; however, the consumer might not have the funds to go after all of these inspections, and they may not realize the value. Energy raters will be the wave of the future, but home inspectors could begin to include this knowledge in their reports to create value.
With builder confidence rising, and my review of my own business, I have good feelings for the coming year. More home inspectors will leave the profession. This was a good year for me and others, but this is still not the best business climate for the real estate industry. I am feeling positive; however, lenders are making mortgages difficult to obtain (unless you have worked to meet the requirements), and foreclosures will continue to bring home prices down (this is good for the consumer if they can find the right home). We have to remember that the recovery in the real estate industry will take time.