Have Houston Real Estate Prices Hit Rock Bottom? (Missouri City, Bellaire: appointed, cheap apartment)

[CaroleF]

I'm just wondering if prices could continue to fall. I am on a temporary hiatus from house hunting because I can't find anything that screams, "Take me, I am yours!" But it worries me that I can't find it now and I wonder if, when it eventually appears, it will cost too much. This has happened so many times in the last twenty years of my apartment dwelling--what I wanted I couldn't afford. Hell, the area where I bought a $120,000 home with my ex 20 years ago -- Knollwood Village--has now doubled in price and I can't afford to buy there. Maybe I am just supposed to stay in my cheap apartment with thin walls forever. Sigh!

[cheryjohns]

Prices in Houston have stopped falling (unless you are in Alief). If that stops you, you're stopped.

[jg198]

I think that from here on out prices will be rising.

[tdhg566]

Of course RE prices could continue to fall. Or they could start to rise. What you're really asking is how does a person "time" the RE market in order to make a short-term profit. No one knows how to do that with certainty, any more than anyone knows with certainty how to time the purchase of more traditional investments like stocks and bonds. You've already observed that over a 20 year period, some real estate can double in price. So, if you adjust your expectations to a longer timeline, you might be able to reduce some of your anxiety. But if you continue to search for the absolute top or bottom of a market cycle, you'll continue to be disappointed.

[CaroleF]

I am not really interested in profit. It's more that I would like to be afford to buy something really nice. I don't know how long I will be in the place I buy. I was only in the one I bought with my ex for two years. That wasn't the plan. We didn't buy it thinking that two years later we would be splitting up. On the other hand, I have lived in my present rented home for 20 years. So my concern about prices falling has more to do with losing my shirt if for some reason I have to sell sooner rather than later. Luckily when my ex and I did sell, we broke even, but that was in 1991. I guess there is always a risk and we take it anyway.

[Malvie]

Originally Posted by CaroleF

I am not really interested in profit. It's more that I would like to be afford to buy something really nice. I don't know how long I will be in the place I buy. I was only in the one I bought with my ex for two years. That wasn't the plan. We didn't buy it thinking that two years later we would be splitting up. On the other hand, I have lived in my present rented home for 20 years. So my concern about prices falling has more to do with losing my shirt if for some reason I have to sell sooner rather than later. Luckily when my ex and I did sell, we broke even, but that was in 1991. I guess there is always a risk and we take it anyway.

Well, the old saw is, "There's never a good time to have children and never a good time to buy real estate."

I had a great job, economy going great, bought FAR less house than I "qualified" for (both the realtor and the mortgage consultant told me I was vastly "underbuying", that I could afford and should buy in a much more upscale area (I paid $180,000; I was qualified for $460,000). I've seen economic cycles before, so I said, "Um, no, this is the house I can actually AFFORD."

Well, I was laid off from that nice job, lived on unemployment and credit cards for 6 months, and found a job making 25% less than the old one. So now, the house that I "underbought" is a bit tight on the payment (it doesn't help that I have all the credit card debt piled up at exhorbitant interest because I lost my job! They get you coming and going....).

The point is, there's never really a good time. I would have still qualified for this house NOW, with the new rules; I just don't have as much "extra" as I did.

You've been renting 20 years, and you bought your house with your ex. That suggests that you are at least 38 years old (18 + 20), probably older. Take your age and add 30 to it. That's the age you'll be when your house is paid off (which is, after all, the actual goal). Every year you wait will get worse.

Has the market bottomed out? Who knows??? I'd like to know! So would everybody else. No way to know what's coming next. There are those who say we will have runaway inflation followed by a crash and reevaluation of the economy. Others say we'll follow the Japanese model and kind of "bump along the bottom" for the next 10 years. A friend of mine, mortgage banker, with whom I drink beer on Friday evenings, told me he (and his banker friends) think this---what we have now---is the "new normal". What we had 3 years ago was AB-normal, and what we're experiencing now is going to be "normal" for the next several years (decade or so).

Ask any realtor: Houston is a moving target when it comes to real estate. Just because an area is "tops" right now doesn't mean it will stay that way for the rest of our lives. I tend to think River Oaks is safe, but everything else is subject to change. When I lived here in 1979, Quail Valley in Missouri City and Champions were the "happening" places, and Alief wasn't so bad (it wasn't so great, but wasn't so bad). Fondren Southwest was a hot condo market; Asians lived in Chinatown, which was where "Midtown" is now. Bellaire was a bunch of little cottages, aging, could have gone either way. Sharpstown was a lovely area, aging gracefully, and Sharpstown Mall was right up there with Memorial City, second only to the Galleria. (In fact, when I moved back here, I looked on Realtor.com and found houses I could afford in Sharpstown Country Club Estates and thought, "WOW! I can live in SHARPSTOWN!"). Washington Avenue was a scary drive. I lived out in the new apartments in "swinging singlesville", Bissonnet at Roark Rd (which was subsumed into Beltway 8); all those apartments were full of upscale kiddoes doing the mating game, and Richmond Avenue was the hottest strip in town.

Look at all the changes since then!

Go out, find yourself a house that you like in an area you like, make your best guess, and buy the thing; otherwise, be satisfied in your apartment.







(There are advantages to apartment living. Something breaks? Call the office and tell them to repair it instead of worrying about finding a repair person, then figuring out how to pay them. Don't like the way the neighborhood is going? Move. New job in different area of town? Move. Lose your job, but get another one in another city? Move. When I bought this house, my office was 5 minutes away on the Beltway. I now work on the east side of downtown and must drive 19 miles through downtown traffic. Had I known what was coming, I might have done something else---but my crystal ball is broken.....).

[RCH99]

What did you blow all that "great job" income on, such that you couldn't survive without living on credit cards for six months? That doesn't make sense while trying to provide an example of how to be financially prudent when buying a home. Just curious whether you left something out?

[pdouglas]

CaroleF, I feel your pain. I currently been living in my home for the last 16 years (homeowner) and wanted to take advantage of the market and low interest rates by upscaling. Well, after 2 years of searching and many missed opportunities, I have signed a contract with a closing date in the very near future. Rates are currently under 5%, the Obama tax credit, negotiating a house $20,000 less than the value on the tax record, and house in excellent condition is telling me its time to buy.

[Malvie]

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[jcash]

We recently bought a town home on the north west side of Westbury close to the loop. Close to "The Mall", Med Center, Sports, Park, Museums...... We were looking at Downtown Lofts but we're from the northeast. Both my wife and I have good jobs and did not want to put ourselves in a financial bind by buying to high. Our house up here is nearly paid for but know we want to move to Houston. About 2 years ago we saw an opening to buy in the near future. We saved like crazy paid off 90% of our debt and made the choice to take advantage of the market slump by living here and buying there. Take it from me I see the market down there changing over the next 6 months. More and more I read of people trying to leave the north and move south. We made the choice faster for other reasons besides the market. My whole family lives north of Houston in the Magnolia area. They have been there for years and have been taunting me everyday about how nice Houston is. I love to read the threads about how Houston sucks.... Believe me you have no idea about "suck" up here we hibernate for 4 to 5 months out of the year. . I think if you have the financial ability to buy, now is better and will be better than later.


My 2 cents...