Why people love to move to Texas suddenly?

According to the Texas A&M Real Estate Research center, people have been crazy about Texas real estate for long due to the low housing prices and affordability factor but never really fond of it’s hot weather condition. In the last two years, post pandemic interest has really spiked many folds due to lots of different factors.

It has been an attractive relocation destination for the past decade thanks to its pro-business environment, relatively affordable housing, and friendly charm. While population growth has been strong all ten years, some years have stood out more than others.

A wave of Californians came to Texas in 2018, shortly after the Tax Cut and Jobs Act of 2017, which prompted numerous moves due to the loss of state and local tax (SALT) deductions. The onset of COVID in 2020 brought another wave of newcomers.

While the number of Texas households moving to less dense areas of the state has greatly increased, especially within the “Texas Triangle” (the region bordered by I-35, I-45, and I-10), the number of in-migrants has grown well beyond the national average. In fact, Texas had an almost 200,000 net increase in out-of-state moves between the summers of 2020 and 2021, second only to Florida, which had slightly more than one-quarter million.

The number of newcomers from California has been especially high over the past few years (Figure 2). The big question is, how many more Golden State residents will call Texas home because of the post-COVID scramble?

Here is the most common reason,

To learn more about this trend, check out the article, https://www.recenter.tamu.edu/articles/tierra-grande/Take-Me-to-Texas-2340

TEXAS HOME BUYER SURVEY

Check this really informative Infographics and understand how the Texas Real Estate Market is shaped by various factors and different buyers.

CLARIFICATION – NEW HOMESTEAD EXEMPTION TAX RELIEF

Before a recent change in the Texas Tax Code, some homebuyers were not eligible for a property-tax homestead exemption until January 1 of the year following their home purchase. This caused those homebuyers to lose out on any benefit of the homestead exemption for up to a year after purchase. For example, if on January 2, 2020, a person purchased a home that did not have an existing homestead exemption, that person was not eligible to benefit from a homestead exemption until 2021.? 

Who Benefits from the Change in the Law?

A change in the law that became effective January 1, 2022, allows all homebuyers to be eligible to receive the homestead exemption beginning on the date they obtain ownership.?SB 8 by Sen. Bettencourt, which Texas REALTORS® supported, allows homebuyers who purchase a property that does not already have a homestead exemption to apply for the exemption immediately. This includes homebuyers of new construction, properties that were owned by investors, and properties for which the seller had removed the homestead exemption. 

What is the Deadline to Apply for an Exemption?

A new homeowner must apply for the exemption for the applicable portion of the tax year before the first anniversary of the date the person acquired the property. There is no longer a requirement of applying by April 30 as there was previously. (The April 30 deadline still applies for other types of exemptions.)? 

If the new owner qualifies to receive the exemption prior to January 1 of the following year, the taxing units will recalculate the amount of tax due and correct the tax roll. If the tax has already been paid, the excess amount will be refunded. The previous requirements for eligibility to receive the homestead exemption still apply.

How Does the New Law Affect the Process for Applying for a Homestead Exemption?

Though the deadline for an application to be submitted has changed, the process for obtaining the exemption should not change. Homebuyers should check with their central appraisal district for detailed instructions.

NEW HOMEOWNERS TAX RELIEF COMING IN 2022

It’s going to be really welcoming news for new home buyers next year. New homeowners will have a way to lower their property’s taxable value and save on their property taxes next year.

Around 250,000 Texans who buy new homes each year that qualify for homestead exemptions will soon become immediately eligible to receive the property tax breaks, instead of having to wait until January of the next year, under a bill headed for Gov. Greg Abbott’s desk.

Senate Bill 8, which lawmakers expect to generate about $50 million in annual savings for new homeowners, passed the Texas House on Friday without any opposition, becoming the first measure to hit the governor’s desk since he called lawmakers back to Austin in July. It is set to take effect Jan. 1.

A new law effective January 1, 2022 will provide property tax relief by allowing homebuyers to file for homestead exemptions in the year when they purchase the property. Currently, new homeowners must wait until the following year to file for the exemption.

Hurray!! I have been asked my buyers every time why cannot I file for exemption same year and answer is finally here. Thanks to this bill and new home buyers would be delighted about it.

What is the Best Way For Average Person To Invest $100,000 Today?

This post is from mymoneyblog.com which I subscribed to educate myself on savings and investments.

Bloomberg has an interview transcript with investor John Paulson, and it has the catchy headline Billionaire Paulson Who Shorted Subprime Calls Crypto ‘Worthless’ Bubble. He does say that, but the interview also includes some insights on many other topics like asymmetrical trades, gold, the highly-limited supply of crypto leading to high volatility, interest rates, and controlling how you spend your time.

If you are having trouble getting around the paywall, let me include this quote:

If somebody came to you and asked how they should invest $100,000, what would you tell them?

I always say the best investment for an average individual is to buy their own home. So if you take that $100,000, put 10% down, get a $900,000 mortgage, you can buy a home for a $1 million. It was just reported that home prices were up 20% in the last month. So if you bought a home for a $1 million with $100,000 down and the home was up 20%, that’s $200,000 on a $100,000 investment. The longer you wait, the more the house is going to appreciate and the greater return you’ll have on your equity investment. So I think the single best investment for anyone with that type of money would be to buy their own house or apartment.

Basically, mortgages offer cheap leverage to average people, on an asset that he things will keep going up for a while. You can take $50,000 and control a $500,000 asset. If it goes up 10%, you just made another $50,000 and doubled your initial $50,000.

Yes, we learned that leverage works both ways in the 2008 Financial Crisis, meaning that if that $500,000 drops by 10%, you just lost your $50,000 downpayment. That’s what Paulson is most well-known for – making $20 billion betting against subprime mortgages during that crisis. In fact, I recall Paulson saying something very similar back in 2014 or so, that housing prices are going to keep going up. Here is the S&P/Case-Shiller U.S. National Home Price Index chart from Calculated Risk:

With this interview, I guess he doesn’t see this trend ending soon. I’m not saying I necessarily agree with this answer, but it is an interesting one when you consider all of the possible options.