When Houses Reach the
Big Five-O
by Steve Rodriguez

     An older home is a wonderful thing. But alongside the charm and character that comes with age and maturity, you may also find a host of conditions not found in houses of modern construction, such as inadequate wiring, cracked foundations, clogged pipes, and deteriorating roofs.
     Older homes should not be avoided, but they do require careful inspection because building codes were much different 50 years ago than they are today and some homes may have been built without careful review by municipal officials.
     It takes a trained eye to spot the special problems of older homes, especially those that have undergone renovations and remodeling. Homes dating as far back as 1900 are still standing, but the construction materials are reaching their natural lifespan and you can be sure neither the materials used nor the methods employed are consistent with current standards.

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Steve Rodriguez is the owner of Bulldog® Professional Inspection Services, a professional home inspection company in the Kansas City area.

Published: August 13, 2007

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MLS Monthly Press Release

The MLS Press Release includes residential home sales statistics for residential properties and new homes listed by 22,000 REALTORS throughout Harris, Fort Bend and Montgomery counties, as well as parts of Brazoria, Galveston, Waller and Wharton counties.

June 2007 Sales

Greater Houston Housing Prices Continue Upward Trend
Records Set, While Market Shows Slowing Sales

HOUSTON — (July 18, 2007) – Houston continues to carve its own niche in real estate trends this month with single-family home sales in June declining compared to the same month last year, while prices continue rising. These are the first consecutive months with declining total sales in more than six years for the greater Houston real estate market but almost all of the decline is within the $80,000 to $140,000 price range and can be attributed to tighter restrictions in the sub-prime lending market.  Home sales in price ranges lower or higher than $80,000 to $140,000 continue at a steady pace, and prices in June continued to display steady growth, as both the median and average total sales price set new records.
     Total property sales for the month registered 8,509, which was an 8.4 percent decrease versus June 2006.  Properties sold during the month reached a total of more than $1.8 billion, a 3.6 percent decrease compared to last year’s nearly $1.9 billion in June sales.  Additionally, the median home price for a single-family home reached $160,000 for June, and the average single-family home price came in at $220,217, increases from last year of 2.6 and 3.7 percent, respectively.
     “We continue to create our own story in the Houston market.  Fortunately, it has good and bad for everyone. While we are experiencing a gentle decline, we can still encourage those looking for a new home to buy because there is a wealth of inventory.  And those wanting to sell a home will be satisfied with the listing prices in our market today,” said Rob Cook, HAR Chairman and broker/ owner of Robert D. Cook Properties. “While we are seeing some continuing fallout from the subprime/foreclosure issues, the Houston market remains healthier than the majority of the country, which has seen a 10.8 percent decline in sales and decreases in pricing as well.”

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Home Inspections

Depending on the type of financing you choose, there should be either 2 or 3 separate inspections on the home you want to purchase. The first should be your own basic inspection (see the bottom of this page for what to look for), the second should be a professional whole-house inspection by a reputable person. Should you select a government loan (FHA or VA), the third inspection should come at the time of the appraisal, which to some degree amounts to a "mini-inspection." Do not, however, rely on this appraisal as your only inspection of the property!
     We cannot emphasize enough the value and necessity of an extensive home inspection. Many home purchasers, either in the desire to save the $200 to $500 that a

good inspection costs, or due to simple ignorance, have spent enormous sums of money repairing items that any good home inspector would have pointed out. Any offer to purchase you make should be contingent upon (subject to) a whole house inspection with a satisfactory report. Do not let anyone--not the agent, not your family or friends, and especially not the seller--dissuade you from having the property thoroughly inspected! Not only will you sleep much sounder after you have moved into the house, a professional inspection can give you an escape hatch from a contract on a defective house. If the contract is written contingent on an acceptable inspection, any defects in the home must be either repaired or monetarily compensated for. If you are not satisfied, you have the option to cancel the contract.
     Inspections are designed to disclose defects in the property that could materially affect its safety, livability, or resale value. They are not designed to disclose cosmetic deficiencies (for example, an interior wall that needs paint touch up). You will need to determine on your own those type of items that will need attention: don't expect a whole house inspection to reveal them to you.
     Don't wait until you have placed an offer on a house before you begin the search for a home inspector. There will be a time limit in the contract designating when the inspection must be completed (typically between 7 and 14 days). If you start trying to find an inspector at that point, and cannot find an acceptable one to schedule it in that time frame, you will only have two choices: go with an inspector that is not your first choice, or run the risk of running past the deadline for the inspection (which could void any chance having the seller take care of repairs). Neither is an acceptable alternative!

     One of the most carefully watched economic trends these days is the direction of housing prices. The housing market cooled abruptly after several years of white-hot performance, and slowing sales and elevated inventories threaten to undermine property values and perhaps other sectors of the economy as well. In light of this broad potential impact, some analysts note that different indicators appear to paint an inconsistent picture of price trends. Each of these measures has its own advantages and disadvantages, though, and a deeper look into the numbers reveals a clear message: home price appreciation has weakened sharply, but with significant differences across regions and metro markets.
     Some reports give a more timely gauge of near-term price trends. The first news on housing prices comes from the sales prices of new and existing homes, published a few weeks after the end of each month by the Census Bureau and the National Association of Realtors, respectively. The median sales price for a new home fell 0.9 percent in May from a year earlier, while the median price of an existing home was down 2.1 percent. A drawback to each of these reports, however, is that they are highly vulnerable to a shift in the mix of homes sold. In some months, for example, reported prices may rise or fall not because the values of any specific homes changed, but rather because there were a greater number of homes sold in higher-priced or lower-priced markets.

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     Mortgage lenders going bankrupt, hedge funds evaporating, the stock market gyrating wildly: What does it all mean for you and me?
     There's no denying that the financial markets are on edge and volatile, and some companies are in difficult straits, triggered in large part by rising foreclosures in the subprime market and the effect on investments tied to those mortgage loans.
     But the degree to which the current situation affects individual Americans depends a lot on what you've got planned in coming months.
     If you'd like to tap into the mortgage market -- buy a house, refinance your mortgage, take a home equity line of credit -- the recent turmoil will directly affect what kind of loan you can get and how much it will cost.
     For many borrowers now, "it's more difficult to get a mortgage loan," said Mark Zandi, chief economist with Moody's Economy.com. "You have to have a better credit score, you have to have more equity," he said.

     Interest rates are rising on some loans, and lenders are going to demand strong proof of income and employment.
     "They're doing everything more carefully. They're more circumspect in extending credit," Zandi said.
     But if you've got a fixed-rate mortgage, a good job and no plans to make changes, many economists say that the biggest risk to you right now is owning a non-diversified investment portfolio. Despite the worrisome stock-market volatility, the Dow Jones Industrial Average (INDU) as of Friday afternoon is still well up from its drop in late February.

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     As a growing number of borrowers fall behind on their mortgage payments, the smartest move they can make is to contact their lender, mortgage-industry experts and consumer advocates say.
     These days, there's more incentive for companies to work with borrowers to avoid foreclosure: Regulators and lawmakers, prompted by troubles in the mortgage market, are encouraging companies to assist troubled borrowers.
     Major lenders in the subprime mortgage market have agreed to a set of principles proposed by Sen. Chris Dodd, D-Conn., calling for servicers to try to modify loans before the interest-rate reset if borrowers will be unable to afford the new payments, among other actions.
     Lenders also have a financial incentive to keep you in your home: They can lose tens of thousands of dollars for each loan that goes into foreclosure, according to a June report from the Office of the Comptroller of the Currency.
     Also, a bank's reputation can be sullied by borrowers who go into foreclosure.
     "We're in unusual times. The problems that are being experienced throughout the market are so severe that many lenders might be willing to be more flexible," said Allen Fishbein, director of credit and housing policy with the Consumer Federation of America.
     "There's a recognition that run-ups in foreclosures do not benefit lenders and could be devastating to the surrounding communities," he said.
     More borrowers are having trouble making their payments, some with interest rates that are resetting and rising, and some are defaulting on their mortgages. This trend is hitting the markets as Wall Street firms rack up losses from securities tied to these mortgages, and financing options decline.

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     If your house sorely needs a makeover, but remodeling is beyond your reach, the DIY Network's Amy Devers, host of "DIY to the Rescue," suggests trying these four simple fixes:

• Touch-up exteriors. Repainting the trim and front door of your house can significantly boost its curb appeal, Devers said. This kind of retouching work is easy on the budget and can be done in just a couple of hours.
• Replace your floors. The widespread availability of affordable "floating floors" (flooring options that can be installed on top of existing boards or linoleum) makes updating the floors in your rec room or pantry a cinch. "You'll probably save a minimum $500 to $600 dollars by doing it yourself," Devers said.
• Update your hardware. Switching out old light fixtures and faucets is a simple, affordable way to modernize your home. While you're at it, equip your house with fixtures that support halogen light bulbs to save money on your electricity bill.
• Transform your yard. Landscaping doesn't have to break the bank. Replacing overgrown shrubs and bushes and adding some flowers for color is an economical way to add value to your home.