Homes sales are up, inventory has stabilized, and by many accounts, new construction it putting up its best numbers in the post-boom housing market. And now, the latest study by Lender Processing Services (LPS) has shown that slowly and gradually, we can add another notch to the housing recovery belt: a healthy mortgage market.

Most notably, LPS found that only 0.84 percent of new loans are considered “problem loans,” meaning, seriously delinquent loans that were current six months ago. That’s the lowest level for problem loans since 2007, and the problem-loan rate is now nearing the pre-boom levels of 0.55 percent.

True, the mortgage markets are not fully recovered, what with a 6.59 percent delinquency rate (the historical average is more around 3 percent); however, there was much to like in LPS’ Mortgage Monitor, which studied more than 40 million residential mortgage loans through the month of March. Herb Blecher, LPS’ Applied Analytics senior vice president, said equity has shown particular improvement.

“The overall equity trend has been a very positive one,” Blecher said. “LPS’ latest data shows that the share of loans with LTVs greater than 100 percent has fallen 41 percent from a year ago.”

But of course, LPS’ Mortgage Monitor contained many other stats, the most important of which are collected in our infographic below:

The post Less Than 1 Percent of Today’s Mortgages are Bad appeared first on Houston Agent Magazine.

Jennifer Stence is a Realtor at Veronica Mullenix Real Estate Group in Katy.

Every week, we ask a Houston real estate professional for their thoughts on the top three stories from the week before. 

This week, we talked with Realtor Jennifer Stence of Veronica Mullenix Real Estate Group in Katy. Stence, a Katy resident, began her real estate career in the 1980s and left to spend time with her kids and teach in the Katy school district for 10 years. She returned to the business five years ago and specializes in Harris County, Ft. Bend County, Waller County, Austin County, and the Katy/West Houston real estate market. 

Houston Agent (HA): Studies show that home prices, home sales and inventory are as competitive as ever. Do you see this occurring in Katy? And how long do you see this continuing?

Jennifer Stence (JS): Yes. Katy is a desirable area because of the school district, primarily, and there is lots of building going on and lots of people moving into the area. I think as long as the economy in Texas, and Houston in particular, is strong, the people will keep wanting to move here.

There are a lot of great things about Houston. We have a good climate, we don’t have to shovel snow. The manufacturing is picking up in Houston, oil and gas is doing well, medicine is here. I don’t see any reason for this to end anytime soon.

HA: The nation’s foreclosure market has been improving, and Houston’s marketplace is ahead of the nation. Have you been seeing many foreclosures on the market lately?

JS: You know, I think there are fewer foreclosures and fewer, fewer short sales. Most of the areas that I’ve worked in, I have not worked with a whole lot of foreclosures or short sales. But from what I’ve noticed, there are still areas where there still are some bank owned properties, but for the most part, I see them going down.

I think for one thing, there are more buyers. I think that properties are selling quicker so that they’re not sitting on the market for a long time. Typically, if you have a distressed property, you can’t make your payments, you have to sell. You put it on the market and it doesn’t sell, it doesn’t sell, it doesn’t sell and it goes into foreclosure. Now the market is active, busy and when you put a house on the market, it sells. It doesn’t go to foreclosure.

I hope this continues for a while. As long as there’s an increase in buyers in the area, people with distressed properties should have an easier time selling them. Hopefully, they won’t end up going back to the bank.

HA: What kind of business strategies are helpful to you and your business?

JS: I use social media – particularly Facebook and websites. I post a lot of things that I think would be of interest to the community on my Facebook page. I also utilize my company website and my presence with the Houston Association of Realtors (HAR). For new agents who are starting out, patience and hard work is the key to succeeding!

I like referrals – they’re very important. I try to send out “sold postcards,” when I’ve sold a house in a neighborhood that I’m interested in doing business with in the future. I stay in touch with my clients – I send them emails from time to time or articles that I think they would find relevant to their situation about the current state of the market and things happening within the Houston area.

The post Viewpoints: Jennifer Stence, Realtor, Veronica Mullenix Real Estate Group, Katy appeared first on Houston Agent Magazine.

Walter Davis, Realtor, Champions Real Estate Group, Houston

What was your first job in the realty industry?
My first job in the real estate business was with a new home builder, where I helped close communities in Sugarland and Katy and later opened new communities in northwest Houston. During this time I also became knowledgeable as a licensed mortgage professional.

Where did you grow up?
I grew up in the suburbs of Chicago. Chicago is a great city filled with many different cultures and lifestyles.

What is your favorite free-time activity?
I enjoy coaching kids in sports and mentoring young men during my free-time when I am not spending it with my children and wife.

What do you do to relax when you’re stressed?
When I am stressed, I generally work. Working does not stress me out so I am continually learning new aspects of real estate, coaching, and mentorship.

Growing up, what did you want to be?
When I was young I just wanted to be successful. I wanted to be married and have kids and work with people.

If you could have lunch with a well-known figure (living or not), who would it be and why?
If I could have lunch with a well-known figure it would probably be Abraham Lincoln because I would love to pick his brain on how he saw the future and what we could be as Americans.

Where is your favorite place to hang out?
I love to go to the movies. It is definitely one of my favorite places to hang out but I enjoy being in homes and looking at the possibilities.

What do you love most about the industry?
I love interacting with people and helping them fulfill their needs. I also enjoy that this is an industry that continually changes and requires us to stay on top of our game in order to help people fulfill their needs in home ownership.

How do you distinguish yourself from the crowd of agents?
I am an agent that is familiar in all the primary aspects of real estate but most importantly I am a believer that my clients needs and dreams are my number one priority, so I treat each and every customer that way no matter what their situation is.

What is the most difficult aspect of your job?
I do not believe my job is difficult on any level because the most important factor when working with clients is listening to their needs. If you are not listening then the job can be more difficult.

Where do you go to network and meet new clients?
I go to networking events and work with builders regularly but I spend most of my time meeting new clients through referrals.

What has been your greatest accomplishment?
My greatest accomplishment in my life has been being married for over 17 years and creating a enjoyable environment for my family.

What was the last good movie you saw or book you read?
The last good book I read was, “Coming Back Stronger: Unleashing the Hidden Power of Adversity, written by Drew Brees.

What is your favorite restaurant?
One of my favorite restaurants is Cracker Barrel, but I really enjoy eating at Los Cucos.

Architecturally speaking, what is your favorite building in Houston?
The JP Morgan Chase tower is one of my favorite architectural buildings in Houston, because skyscrapers remind me of the city of Chicago.

What kind of car do you drive?
I drive a midsize vehicle and F150.

Smartphone or paper?
I believe in both. New technology is my favorite because it is fast and efficient but some people are not aware of how to use this technology so I enjoy using traditional methods as well.

What is your favorite city after Houston?
I would have to name a few but I love my hometown of Chicago. I would put L.A., New York City, and Miami in the conversation as well.

In 10 words or less, what is your advice for someone new to the industry?
“Learn, listen, be efficient and truthful, confident and work hard every day.” Okay, that was 12 words.

Do you want to be featured in our Agent Snapshot? Fill out our questionnaire, and you’ll be featured too!

The post Agent Snapshot: Walter Davis, Realtor, Champions Real Estate Group, Houston and Surrounding Suburbs appeared first on Houston Agent Magazine.

If the Census Bureau’s latest numbers are any indicator, April was a wild month for new housing construction in the U.S., with building permits and housing starts rising and falling in equally dramatic fashion.

And behind the dramatic sways was a familiar culprit – the ever volatile sector of multifamily housing.

Topsy Turvydom in New Construction

First, building permits, which are sought by builders for future construction projects, rose by extravagant amounts in April, increasing 14.3 percent from March and a jaw-dropping 35.8 percent from April 2012 to an annual rate of 1.017 million; that’s the highest level for building permits in five years, and the increase was largely driven by the nation’s surging multifamily housing sector. Authorizations for multifamily units rose 32 percent from March to April, while single-family home authorizations rose a more modest 3.0 percent.

Yet, where multifamily housing was a boon for permits, it was an anchor for housing starts. Multifamily starts were down 37.8 percent from March to April, which sank overall housing starts by 16.5 percent; though housing starts were still 13.1 percent above April 2012, the monthly decline knocked them down to their lowest level since November 2012.

The Single-Family/Multifamily Divide

But still, on the single-family home side of the equation, there was much to like. As Bill McBride pointed out on Calculated Risk, single-family starts were up 20.8 percent yearly in April, and for 2013′s first quarter, they’re up 39 percent from 2012. And considering that overall housing starts were at an 853,000 annual rate – when housing starts averaged 1.5 million per year from 1959 to 2000 – there’s still plenty of room for growth.

Are there any takeaways, though, regarding multifamily housing? If anything, April’s numbers on building permits only confirm that we can expect more multifamily developments to come down the pipeline, and as the Architecture Billings Index continues to show, there are still plenty of developers out there prospecting for more condominiums and rental units.

The post Housing Starts Plunge, Building Permits Soar in New Census Bureau Data appeared first on Houston Agent Magazine.

Prospecting for new clients is among the least glamorous of real estate’s many activities, and the stereotypical image behind prospecting – endless cold calls,  drip email marketing campaigns, door-to-door canvassing – make the activity seem as much fun as pulling teeth.

Yet, beyond the stereotypes, there is a whole other world of prospecting, one that is fun, and lively, and interactive, and as is the case with so many aspects of real estate, there’s nothing stopping you from embracing such strategies. Here are three to consider:

1. Inventive Branding – Your real estate business is only as good as your brand, and it behooves any agent to make their brand as ubiquitous and recognizable as possible, without seeming intrusive or pushy. How can that balance be achieved? Consider creative, inventive places to incorporate your brand. For instance, think about unorthodox places to print your company logo and contact information, such as water bottles, which you could distribute to members of your gym, your son/daughter’s little league team. Or look into creative sponsorships, such as bowling leagues, or school field trips; when I was in high school, our marching band planned biannual trips to Disney World, and a Realtor in the area always met new clients through his sponsorships of the band’s fundraising efforts, which involved his logo appearing boldly on event banners and the like.

2. Public Events – Rather than spending a weekend going door to door, let the potential clients come to you with a fun public event! Something like a barbecue for your neighborhood/subdivision is the perfect opportunity to introduce yourself to customers, show off your impressive market knowledge and, naturally, impressive everyone with your impeccable culinary skills.

3. Make the Usual Unusual – Finally, think about ways to make the most common, boring aspects of your real estate business unique and interesting. For instance, we recently learned of a Realtor who attached sticks of gum to all of his business cards; such a strategy is not only hugely creative, but incredibly cost-effective, and it gave the Realtor an immediate edge on his competition. Think about what other aspects of your business could use a similar, refreshing approach.

The post 3 Fun Ways to Prospect For Clients appeared first on Houston Agent Magazine.

Realtors and appraisers don’t always see eye-to-eye when it comes to valuing homes. This can be especially frustrating when seemingly everything else is working well in the booming Houston market. I’ve put together some of the most common reasons homes don’t appraise and some suggestions to try and help make sure you don’t run into any problems.

With sales and prices up, everything about the real estate market seems great, but making value in an appreciating market can be tough for appraisers. This is because of an inherent flaw in appraisal methodology.

Appraisals use sales from the past to determine current market value. In a rapidly changing market, the past may not accurately depict the current market conditions. While appraisal methodology can adjust for an appreciating market, many appraisers are reluctant to do so for fear of push back from underwriters.

To combat that problem, always let the appraiser know if you have multiple offers, and be willing to accept back-up offers no matter how good the first offer is. This suggests market acceptance of the pricing of your home and not a lone rogue buyer offering too much out of ignorance or exuberance. If your market is improving, make sure the appraiser knows it.

One way show this is by use of the statistical features in the Tempo MLS. If the average neighborhood sales price for the past 12 months is more than 3 percent higher than the prior 12 months, it’s a pretty good argument that the market is appreciating. In some cases, the prices don’t yet reflect the increases but the leading indicators; marketing times, supply of homes, sales volume and list to sales ratios indicate an imbalance in supply and demand that precedes an appreciating market. Given an appreciating market or multiple offers, an appraiser may be able to make market condition adjustments and justify a higher value.

Appraisers rely more on sales than active listings or pending sales because a closed sale is evidence of how much a buyer was willing to pay and when they paid it. A listing may never sell, and if it does, we don’t know when or at what price. Always consider the competing listings when marketing a home, but be aware of the sales when accepting an offer.

Appraisers have guidelines when selecting comparables. Fannie, Freddie, FHA, etc., have guidelines for what is considered comparable. Individual lenders may have additional restrictions as well. In general, comparables that require adjustments of more than 10 percent for any individual characteristic (size, quality, view, etc.), 15 percent for the net adjustments and 25 percent for the gross (sum of all) adjustments suggest a lower level of confidence and therefore higher risk.

As such, a 3,000 square foot home would not likely meet these criteria when appraising a 2,000 square foot home. Similarly, a $200,000 home is a poor comparable for a $300,000 home, regardless of what adjustments you feel are warranted. The thinking is if a comparable needs that much adjustment, it is not really comparable. When selecting comparable sales, the fewer the adjustments, the better.

By far the most common reason some homes fail to appraise is because of price per square foot ($psf) valuation. The $psf is the fastest and easiest way to value a home, but because it is so simplistic, it is the most wrought with error. $psf assumes that the entire value of a home is based on the number of square feet it contains. It fails to distinguish between fixed costs and variable costs.

Fixed costs (lot, appliances, site improvements, garage) remain roughly the same regardless of the size of the home, and may make up 30 to 40 percent of value in a suburban location and even more in areas with high land values (The Heights, Memorial Villages). $psf becomes most problematic when comparing two different size homes. In theory, if two homes have similar fixed costs of $50,000, a 1,000 square foot home should cost $25 per square foot more than a 2,000 square foot home, because the fixed costs are divided by a smaller number. This is why larger homes typically have lower $psf cost than similar smaller ones.

To find out how much buyers really pay for each additional square foot of home, compare two homes of different size that are similar in all other aspects. Both are two-story, don’t have a pool, no view premiums, the same number of baths, etc. Subtract the lower sales price and divide that by the difference in square feet. Typically that number amounts to 25 to 50 percent of the sales price per square foot. So when pricing a home, $psf is okay to use when making an apples to apples comparison. Short of that however, keep in mind that smaller homes typically have a higher $psf than larger ones, and one-story homes typically have a higher $psf than two-story homes.

Steve Kahane is the owner of Greater Houston Area Appraisals and a certified residential appraiser. He can be reached at:

Phone: 832-875-6090
Email: steve@ghaa.net
Fax: 832-550-2070
Website: www.ghaa.net

The post Why Homes Don’t Always Appraise – And What Agents Can Do About It appeared first on Houston Agent Magazine.

“Housing affordability” is a term that gets thrown around quite a bit nowadays, and for good reason; with mortgage rates at all time lows, homeownership is a possibility in even the priciest of housing markets, and owning a home is often a more cost-effective option to renting (though to be fair, such a scenario depends upon securing a mortgage amidst tight lending standards).

Yet, though homes may be relatively affordable, how much income must a homebuyer have to afford a mortgage? And how do those income levels differ across the U.S.’ many metropolitan markets? Those two questions were at the heart of a new study by HSH.com, which took median home price data from the National Association of Realtors and the average first quarter interest rate for 30-year FRMs and, assuming a 20 percent downpayment (and discounting any complementary, adjustable costs, such as taxes and insurance), calculated what kind of income a homebuyer would need to purchase a median property in that area.

So, what did HSH.com find out? What income level should you have in mind when consulting with potential clients? And how much can you brag to current clients about how affordable our housing market is? See our infographic below to find out:

The post What Income Does Your Client Need to Buy a Home in Houston? appeared first on Houston Agent Magazine.

A development has been approved for Galveston.

Marquette Company has had two 15-story hotels and nearly 4,000 homes approved for development in Galveston, according to a new report from the Houston Chronicle.

It will be the biggest development project in the town’s history, and though it had proven controversial with town residents, it is poised to reshape the area. On Thursday, the Galveston council approved a five-year permit extension that authorizes the construction of two 15-story hotels, in addition to the 3.948 dwellings already authorized.

The vote ensures that Marquette Company, along with the Texas Land School Board, can proceed with the 1,000 acre Preserve at West Beach development.

Opposition initially came in 2007 from residents who feared that the hotels and new residences would destroy the remaining freshwater wetlands, coastal prairie and wildlife habitats. In 2008, Hurricane Ike and the recession sidelonged the project, and in 2011 Marquette defaulted on the 35 million dollar  loan used to purchase the property.

Two weeks before the property was to be sold at auction, the Texas Land School Board, in agreement with Marquette Company, purchased the development for 10 million dollars.

Despite heavy protesting in 2007,  only two residents spoke out against it on Thursday. According to the Houston Chronicle, Councilwoman Elizabeth Beeton expressed concern that concessions in the original agreement would put the city at a disadvantage. She also expressed concern about putting the hotel towers in the same place where many homes were removed after Hurricane Ike struck in September of 2008.

Construction will begin depending on market conditions. The permit allows construction with or without a golf course. If a golf course is built, the number of allowed dwellings will be reduced to 3,471.

The post 16-Story Hotel and Nearly 4,000 Homes Approved for Galveston appeared first on Houston Agent Magazine.

The Leland Woods subdivision is celebrating the “rebirth” of their community, after receiving assistance from the city of Houston.

The Leland Woods subdivision is celebrating the “rebirth” of the community after receiving assistance from the city of Houston. According to Mayor Annise Parker, the development almost “crashed and burned” because of the economy.

City officials confirmed this construction project began eight years ago, but builders stopped construction on the development due to the economic downturn and plummeting housing market.

“They didn’t have the resources to complete their commitment of building houses, and mortgages dried up so both sides were out of whack,” Parker said, in an interview with MyFox Houston.

Contempo Builders resumes work on Leland Woods

Since then, the city stepped in and hired Contempo Builders to resume work on Leland Woods. So far, they have developed 41 homes as part of phase one. Phases two and three will eventually develop 373 properties, and the builders work with potential buyers who qualify for a special assistance program.

“You have to have a particular income under law in order to get the $30 thousand,” Alfredo Rodriguez, Vice President of Marketing at Contempo Builders, said.

14 of the homes have been sold (or are currently in the process of being sold). Anyone can buy any of the homes in the Leland Woods subdivision, but only people with a specific income can qualify for the assistance program.

“We’re not just building homes,” Parker said. “We are building the city of Houston.”

The post Leland Woods Community is Revived, Thanks to Houston’s Help appeared first on Houston Agent Magazine.

Builder confidence at all levels of the homebuilding industry showed some of its strongest numbers in years in May, with both the Housing Market Index and the 55+ single-family Housing Market Index increasing.

The indices, both of which are measured and released by the National Association of Home Builders (NAHB), reflected new levels of homebuilder optimism and greater interest from homebuyers.

Homebuyer Urgency in the Housing Market Index

For the more general Housing Market Index, builder confidence for newly built, single-family homes rose three points to 44, with all three main components of the index showing improvement as well.

The index gauging current sales conditions increased four points to 48, while the index gauging expectations for future sales edged up a single point to 53, which is its highest level since February of 2007. Finally, the index gauging traffic of prospective buyers gained three points to 33.

Rick Judson, the chairman of the NAHB, said that low housing inventory has inspired a new level of urgency for potential homebuyers.

“Builders are noting an increased sense of urgency among potential buyers as a result of thinning inventories of homes for sale, continuing affordable mortgage rates and strengthening local economies,” Judson said. “This is definitely an encouraging sign even amidst rising challenges with regard to the cost and availability of building materials, lots and labor.”

Soaring Confidence in 55+ Market

As promising as the Housing Market Index was, though, it paled in comparison to the gains seen from the 55+ single-family Housing Market Index, which increased 19 points in the first quarter to reach 46; that’s the highest reading since the NAHB launched the index in 2008, and the sixth straight quarter of increases.

With numerous Baby Boomers retiring and seeking new housing options, the 55+ market will be an important one for the housing market, and the individual components of NAHB’s measure of the market left much to smile about: the present sales marker rose 19 points to 46; expected sales rose 21 points to 53; and traffic of prospective buyers rose 15 points to 41.

Also, the 55+ Housing Market Index for condos showed strong numbers. Overall, the index rose 23 points to 38, its highest first-quarter reading in the index’s history, while present sales rose 23 points to 37, expected sales for the next six months climbed 23 points to 43 and traffic of prospective buyers rose 23 points to 38.

“We are seeing an increase in consumer demand for homes and communities that are designed to address the specific needs of the mature homebuyer,” said Robert Karen, chairman of NAHB’s 50+ Housing Council and managing member of the Symphony Development Group.

The post Builder Confidence Surges in May appeared first on Houston Agent Magazine.