I wish you and yours the most prosperous year ever! This is my first newsletter in the new year. I have missed you all dearly. So let’s get on with it!
What a year end and new year it has been! I slaved all through Christmas, and ever since the new year (don’t feel sorry for me please, I welcomed it). December we issued a record number of approval letters- in my 14 year history as an originator! We had more purchase closings this January than ever as well. This tells me that the low rates are spurring activity. People are regaining confidence. Certainly there are some that are concerned about job stability and finances. That is a given. But rates are historically good! Who would not want to get a rate in the 4’s! So hang in there. I predict Q1 of 2009 will be vibrant.
Earlier in the week, I had the privilege of hearing Mike Inselmann speak. He is the President of Metro Studies http://www.metrostudy.com/corpwebsite/about/who.aspx . They are a housing market research firm . Mike is a household name to many lenders, realtors and builders. Each year he is almost right on his forecasts! In summary, this is what he predicts for 2009:
It’s not a buyer’s market. It’s not a seller’s market. It is balanced. We have 6-7 months of inventory, and 78 days on market. That is healthy!· The last quarter of 2008 we had a hurricane, an election, and the most horrible financial news in a matter of 6 weeks. So let’s agree to forget Q4 2008! Ok by me!· Texas is NUMBER 1 in job growth in the nation! The 5 top cities in Texas are all in the Top 20 for job growth in the nation, Houston being the leader, of course!· Houston housing GREW in 2008. However there was a shift – more rentals than ever before. Housing is not declining, it has just shifted. These people will need homes eventually· Houston will add jobs in 2009, but potentially not many. Energy and Healthcare will be important fuelers of the economy.· We had 29,000 home starts in 2008! That is a stable number! What is unstable are the gargantuan numbers we saw in 2006/2007. So the market has adjusted to normalcy.· Houston has the lowest appreciation market in the nation – 4.4% average. But look at us now! We are not seeing the ‘bubble ‘ effects of other markets .· In 2008 there were 12,000 foreclosures in Houston. There were 50,000 in 1987. Foreclosures are a given in any market. The numbers we see are normal for a market as large as ours. The takeaway from Mike’s talk, if you forget all the graphs and fancy numbers that only an economist can understand, is that it is really not as bad as it seems. Not in Houston anyway. TWO THINGS must happen for our market to turn around. (1) Psychology of buyers and sellers have to change, and (2) Credit must be available. The latter, credit, is available, but it is more difficult to obtain.
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