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Market ready to perk up for home buyers
By Mary Madewell
Published December 13, 2009
A surprisingly stable year in 2009 with a forecast of better things to come in 2010 give Realtor® Joe Burress reason for optimism as he passes along his gavel as president of the Paris Board of Realtors.
Nine months ago when interviewed by The Paris News, Burress was less than optimistic.
“I had just listened to a pessimistic speech by a usually overly optimistic economist, and we had just come out of a not so good year,” Burress said about his frame of mind then.
“But now, figures show 2009 transactions through November are about on par with last year,” Burress said. “And, projections from Century 21 are something to be optimistic about.”
Those projections predict a 11 percent growth in home sales nationally with existing home sales growing by 10 percent. New home sales are expected to rebound even more sharply, growing by 24 percent.
Projections, Burress said, are based partly on the fact that the gross domestic product (GDP) grew at a 3.5 percent rate in third quarter 2009, following five declines in the prior six quarters.
On the national front, housing starts are expected to be up by 35 percent.
“If we can get anywhere close to those numbers we are going to be in good shape,” Burress said. “Building starts have been way off, but we are still seeing custom houses being built.”
An upswing in the price of construction materials in addition to the woes of a national recession shut down speculation house contractors, Burress said. But the price of materials is coming down now, which should encourage more activity.
Burress said strong local banks with money to lend is a plus for the Paris area.
“Our banks are strong and they are screaming for us to bring them buyers,” Burress said. “We didn’t suffer here like many other places that had all that mortgage fraud.”
Aside from future projections, Burress said past year activity is reason enough for optimism.
“In the sales business you have to be optimistic,” Burress said. “But numbers don’t lie.”
Through November, yearly Lamar County real estate transactions totaled 876 compared to 1,002 through November 2008. But total volume totaled $50.659 million, within $700,000 of the $51.338 million in 2008.
“For Realtors®, 2008 earnings were fairly stable with fewer transactions,” Burress said. “It meant less paper work for us and better prices for the seller.”
Residential inventory is down about 22 percent compared to last year, something Burress said is slightly troubling.
But he noted the federal government’s incentive for home buyers, which has now been extended not only for first time buyers but existing home owners as well, may cause some movement in middle to upper priced homes. See accompanying graphic for details on the Extended Home Buyer Tax Credit.
“The new home owner tax credit has stimulated sales and we are hoping the existing home owner credit will cause some people to think about either downsizing or upsizing,” Burress said.
The fact that Paris housing remains affordable is a plus going forward.
“We have always ranked right at the top of the Texas Housing Affordability Index,” Burress said. The THAI is published quarterly by the Texas Real Estate Center at Texas A&M University — College Station. The index shows housing prices relative to local incomes. “I just noticed out of about 30 communities rated across Texas we were second, right behind the Sherman area,” Burress said. “That is always good for the local market.”
Texas and Lamar County, Burress said, benefit from several factors.
“We are a right to work state; we have no state income tax; we have a diversified economy and we have a pretty good climate,” Burress said. “I think that is what insulated us from a very deep, long recession.”
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