The Truth About Texas Real Estate What you should know about how Texas is different Last updated: Feb. 20, 2009 Information courtesy of Texas Association of Realtors

The Challenge Homeowners around the country are listening to the national news media and hear only gloom and doom about the real estate industry. What few may realize is that the media’s most alarming headlines come from states like California, Florida, Arizona, Nevada. Things are different here in Texas. As Texas REALTORS®, we are the authoritative resource on our local markets, so our state and local associations have launched a campaign in early 2009 to help us spread “The Truth About Texas Real Estate” with clients and prospects.

Why Texas is different: Strong, diverse economy Obviously, the economy drives real estate (and vice versa) and what we hear nationally about the economy isn’t good. But, consider this … The Texas economy is very diverse and its largest industries are performing well, such as oil & gas and government. Texas continues to add jobs each month, in contrast to the national economy, which is losing jobs. Sources: Real Estate Center at Texas A&M University and U.S. Bureau of Economic Analysis

Why Texas is different: Strong, diverse economy Sources: Texas Workforce Commission, U.S. Bureau of Labor Statistics, and Real Estate For example, in December 2008: The U.S. economy lost 2.8 million jobs compared to December Texas gained 154,600 jobs over the same period. All Texas metros experienced positive employment growth rates from December 2007 to December Texas’ unemployment rate has been less than the national rate for 25 consecutive months. Over the past year, Austin, Dallas / Fort Worth, Houston, and San Antonio each added more jobs than Miami, Los Angeles, and Chicago combined. Center at Texas A&M University

Why Texas is different: Enduring home values Through the mid 2000s, places like California, Florida, Nevada, and Arizona saw dramatic spikes in home prices while Texas experienced steady appreciation. As the national economy softened in late 2007, those red-hot real estate markets cooled and prices began dropping dramatically. Texas, in contrast, has remained relatively steady. In fact, home price appreciation in Texas has not fallen below zero in the last 16 years. What the headlines say…What doesn’t make the news… Median sales prices are down 41%...in California Median sales prices are down 5%...in Texas Average sales prices dropped $115,000 in one year…in Arizona Average sales prices are unchanged year- to-date …in Texas Sources: Real Estate Center at Texas A&M University, California Association of REALTORS®, Arizona Regional MLS, OFHEO

For example, Texas is one of only eight states that experienced positive appreciation in home values from December 2007 to December 2008.

Why Texas is different: Positive, long-term outlook By 2040, the population of Texas will double – and all those people will need a place to live. In fact, the migration has already begun, with Texas claiming the No. 1 spot for relocations in the 2008 Allied Van Lines Magnet States Report for the 4 th consecutive year. Source: State Demographer, Center for Demographic and Socioeconomic Research and Education The Texas economy is strong, not based on a few industries or speculative investments, but based on the sound fundamentals of job growth and diverse industries. In fact, Texas is ranked 4 th among the best states to start a business according to US News & World Report (Jan. 2009). Economists throughout the country cite these factors as key to Texas’ long-term strength.

What about foreclosures? #1 Nevada (7 x Texas) – More than 7% of homes received a foreclosure notice in 2008 #2 Florida (4 x Texas) – 4.52% of homes received a foreclosure notice in 2008 #3 Arizona – 4.49% of homes received a foreclosure notice in 2008 The foreclosure problem is very real, it’s just not centered in Texas. Source: RealtyTrac ArizonaTexas %14% %15% Foreclosures are up nationally, but have been primarily driven by the three hardest-hit markets in the U.S.:

What about foreclosures? In fact, more than 40% of all foreclosure filings in the U.S. in 2008 occurred in California and Florida. Despite having one of the largest real estate markets in the U.S., Texas falls a mere 27 th on the list of foreclosure rates for Source: RealtyTrac 2008 U.S. Foreclosure Market Report™ Many say it’s our home equity lending law, which is considered the strictest in the country. Driven by Texas REALTORS®’ influence at the Capitol, this constitutionally protected law ensures Texans won’t borrow too heavily against their homes’ equity. This has helped insulate our state from much of the mortgage meltdown that has aggravated the national housing crisis. How did we dodge the foreclosure crisis?

What this means for you The average Texas family spends six years in their home. The statewide median home price in December 2002 was $128,500. The median home price in December 2008 in Texas was $140,900 So, if you are an average Texan, your home value increased 9% over that period. That fact would shock most consumers listening to national news. It means their homeownership opportunities are not as bleak as they may believe. Consider this … Source: Mortgage Bankers Association

Did you also know? … 91% of Texas homebuyers were not rejected by lenders last year? … Mortgage rates are at all-time lows, like 4.89% for a 30-year fixed rate mortgage, which translates to a $150,909 loan for $800/month? … First-time homebuyers can now qualify for a tax credit of up to $8,000 that they don’t have to pay back?

The Bottom Line… In our lifetime, we will likely never see interest rates this low again In out lifetime, we will likely never see home values this affordable So, this is likely the best “Sale” we will see in our lifetime! If we adjust all our plans to get to Nordstroms or WalMart when something “hot” goes on sale, why are so many prospective home sellers and home buyers sitting on the sidelines during the Greatest Sale we have ever seen? The REALTORS of Keller Williams – Dallas NW are members of the National Association of Realtors and the Texas Association of Realtors, and most importantly LOCAL Experts. Call us at & visit us online at