77079 - overconfident? (Houston: for sale, house, neighborhood)

[Lost_In_Translation]

Originally Posted by EasilyAmused

Do you have a link? Redevelop could mean
a makeover or the dozer

Just a snippet in the memorial super neighborhood minutes. No other info than what I just read.

[77079guy]

I'm not an expert, but I'd be amazed if this goes for anywhere near asking. It's on the corner of Kirkwood which probably has traffic / 1,000s of cars drive by on a given day. Nobody who will pay that price would/should want to live on such a busy corner.

I think it'd be interesting to see some of the data from sales in the area that show what the actual price the borrower has agreed to pay, how much in concessions the seller is giving back, and how much of the purchase price is being financed with a mortgage (i.e. indicating how much cash equity is actually going into these sales). My uneducated guess is that many of these purchase are being made with low cash infusions, which when looking macro at the neighborhood will result in an over-levered neighborhood, which will result in declining prices later when rates do rise (and/or if there was ever any shock even in the energy industry resulting in sizeable job losses for the area). Just IMHO

[Lost_In_Translation]

Originally Posted by 77079guy

(and/or if there was ever any shock even in the energy industry resulting in sizeable job losses for the area). Just IMHO

That's a given. Memorial (and Katy) growth is tied pretty closely to the Energy corridor and oil and gas more than almost any other part of Houston (Woodlands and Spring to a lesser extent).

[cheryjohns]

It's dropped $22K already. Future drops coming...

[HoustonRonnie]

It's ugly. Who cares? Nice lawn though.

Ronnie

[ToyYot]

Originally Posted by 77079guy

My uneducated guess is that many of these purchase are being made with low cash infusions, which when looking macro at the neighborhood will result in an over-levered neighborhood, which will result in declining prices later when rates do rise (and/or if there was ever any shock even in the energy industry resulting in sizeable job losses for the area). Just IMHO

And how is that different from any other neighborhood? Someone earning $35k/year buying a $100k house with 5% down is in no different a situation than someone earning $150k/year buying a $450k house with 5% down.

And what do rates have to do with anything? When rates rise, will that make these neighborhoods somehow less desirable than other neighborhoods? What I'm saying is, given the demographics here (i.e. college educated), I doubt many are buying with adjustable rate mortgages, so if anything, rates hikes may have less of an effect.

[Glossa]

I can't see why this matters to the neighborhood numbers, but I did hear that the current owners paid cash for the house.

[Bily Lovec]

having lived in that area and driving past that house twice a day,
there is no way in he l l Id BUY a house there, much less pay that for a house in that location...

[houstonfan]

Originally Posted by BDFP

And how is that different from any other neighborhood? Someone earning $35k/year buying a $100k house with 5% down is in no different a situation than someone earning $150k/year buying a $450k house with 5% down.

And what do rates have to do with anything? When rates rise, will that make these neighborhoods somehow less desirable than other neighborhoods? What I'm saying is, given the demographics here (i.e. college educated), I doubt many are buying with adjustable rate mortgages, so if anything, rates hikes may have less of an effect.

I'm no expert but I did read that in general, if interest rates rises, prices are hindered. That's because if, say, the typical person's salary can afford a mortgage payment of $2000/mth, they will be able to buy less house when interest rate is high. If everybody can buy less house, then an expensive houses will have less buyers who will look at that house, therefore slightly depressing the market.

I personally think 77079 is very nice but it's overall inflated for being that far from downtown. But then again, I don't have kids so I wouldn't understand, lol. All markets are driven by a balance between supply and demand, so while there's the demand and means, it will rise until that balance shifts.

[EasilyAmused]

Originally Posted by houstonfan

I'm no expert but I did read that in general, if interest rates rises, prices are hindered. That's because if, say, the typical person's salary can afford a mortgage payment of $2000/mth, they will be able to buy less house when interest rate is high. If everybody can buy less house, then an expensive houses will have less buyers who will look at that house, therefore slightly depressing the market.

I personally think 77079 is very nice but it's overall inflated for being that far from downtown. But then again, I don't have kids so I wouldn't understand, lol. All markets are driven by a balance between supply and demand, so while there's the demand and means, it will rise until that balance shifts.

All this discussion of rates and busts can be said about any part of town.

As to 77079 or Memorial, its not for everyone. It's kinda old school,fiscal conservative. Not many places left like that in Houston, so its in high demand for that population.