Riverstone

A Fort Bend area master-planned community where luxurious homes, water features and resort-style amenities define the landscape, Riverstone is one of Fort Bend County’s most desirable addresses. Riverstone residents enjoy an enviable lifestyle with a superb selection of new homes with Sugar Land and Missouri City addresses. Plus, with varied highway access and an array […]

Sienna

Sienna is a comprehensive 7,000-acre master-planned community. Sienna is more than houses inside one of the top Fort Bend County subdivisions. Neatly tucked between the acclaimed cities of Missouri City and the City of Sugar Land, it is a community in the truest sense of the word. Every effort is made to maintain a sense […]

Bridgeland

Imagine a place with vast open spaces and spectacular sunsets. An 11,400 acre master-planned community in northwest Houston where flocks of waterfowl glide across natural lakes. A refuge from the chaos of your workday. A place where you can find true balance. The new home community of Bridgeland is such a place. Bridgeland attracts and […]

Towne Lake – Master Planned Community, Cypress

Towne Lake reflects its Texas-sized appeal in a 300-acre lake, with beautiful views. Lake coves allow neighbors easy access to the water and to the many amenities and destinations throughout, bonding the community together. Towne Lake Charm is all these things and more, reflected in a community steeped in Texas pride. Caldwell Companies has perfected […]

Cypress Creek Lakes

Cypress Creek Lakes is a beautiful master-planned new home community nestled in the charming Northwest Houston suburb of Cypress, Texas. Mischer Development has carefully designed the 1,600-acre community to respect the natural beauty of the land while developing approximately 2,000 new home sites. Its convenient location on Fry Rd. just off of Highway 290 also […]

Homeownership and Social Benefits – Owing a Home makes you Happy!!!

Posted by houstonvijai on September 20th, 2013

I read an article few months back and never remembered until few days ago. In this post, I share few snippets from publication released by NAR and research from Canada Mortgage and Housing Corp.

Owning a home can make families healthier, happier, and more financially secure, according to new research by Canada Mortgage and Housing Corp. on the benefits of home ownership. Researchers worked with Habitat for Humanity families to evaluate how their lives changed after moving into their homes. Eighty-nine percent of the Canadian families surveyed said their lives improved since they moved into their homes. Eighty-six percent said they’re happier since owning a home.

The survey also found home ownership led to an improvement in children’s school performance. The families reported that the children had increased confidence, improved behavior, higher grades, and enjoyed school more after becoming home owners. The study’s release coincided with the National Association of REALTORS(R) recent release of a new publication, “Social Benefits of Homeownership and Stable Housing.”

“There is evidence from numerous studies that attest to the benefits [of home ownership] accruing to many segments of society,” according to Canadian researchers. “Home ownership boosts the educational performance of children, induces higher participation in civic and volunteering activity, improves health care outcomes, lowers crime rates and lessens welfare dependency.”

Few important sections in the publication from NAR talks about Homeownership and Education Achievement and Homeownership and Parenting interests me a lot. Here is some important snapshot from that publication.

Homeownership and Education Achievement
Consistent findings show that homeownership does make a significant positive impact on educational achievement. Less clear, however, is whether homeownership in itself, stable housing (i.e., less frequent residential change), or favorable neighborhood characteristics are the main underlying factors contributing to better educational outcomes.

Researchers found that homeowners have a significant effect on their children’s success.The decision to stay in school by teenage students is higher for those raised by home-owning parents compared to those in renter households. Furthermore, daughters of homeowners have a much lower incidence of teenage pregnancy. The authors point to certain behavioral characteristics required of homeowners that get passed onto their children.

In another study by Harkness and Newman, the authors examined whether children from lower income and higher-income families benefit equally from homeownership and found that for children growing up in families with incomes less than 150 percent of the federal poverty line, homeownership raises educational attainment, earnings, and welfare independence in young adulthood. These positive results do not extend to the long-term outcomes of children in families with incomes more than 150 percent of the poverty line, however. These findings suggest that homeownership effects are not only attributable to unobserved characteristics of homeowners, but also indicate causal effects.

Homeownership and Parenting
Though the homeownership effect on success of children has been debated in academic literature, a recent study approached this question from a different perspective. Instead of trying to account for unobserved characteristics of homeowners, they examined whether there is a relationship between home ownership and engaged parenting behaviors in the home, school, and wider community for low to moderate income households. Researchers focused on four variables: parental school involvement, frequency of reading to child, child’s participation in organized activities, and child’s screen time (television viewing and playing videogames).

Altogether, these measures reveal parenting behaviors broadly believed to be associated with positive child outcomes. The authors propose that homeownership provides for engaged parenting practices in two ways: economic and psycho-social. The economic impact of home ownership refers to the positive impact of nurturing neighborhoods.

So it is not just about good financial decision when it comes to owning a home, it has other good side
effects as well. If you are renting, it is the time to buy. You might think you missed the boat but it is closer to the shore and you can hope on it before it’s gone too far.

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Houston is in Spotlight for Good Reasons!!!

Posted by houstonvijai on September 13th, 2013

Houston is making news again not just for healthy economy and housing, it is much more than that. We should be happy and plenty to smile about…literally! Here is snapshot of the article published in this week’s chronicle.

Houston No.2 Happiest City
If you haven’t heard, Houston was named as the No. 2 city on the list of happiest major metros in the U.S. According to a recent Harris Poll, 33 percent of Americans are considered to be “very happy,” and the findings of the poll indicate that location and happiness have a strong connection. We came so close in beating Dallas/Fort Worth which took the No. 1 spot.

Some of the areas in which Houston respondents scored high in terms of happiness, meaning that they “strongly/somewhat agreed,” include:

– Their relationships with friends
– Positive relationships with family members
– Being generally happy with their lives
– Being optimistic about the future

Click here to see all responses and to find out what other cities made the list: Harris Poll

Houston-America’s Next Great Global City
More excitement about Houston came in the form of a Forbes’ article that was published on Wednesday entitled, “A map of America’s future: Where growth will be over the next decade.” In the article, Houston was called the capital of the Third Coast, and that “by 2023 Houston will be widely acknowledged as America’s next great global city.”

The article discusses the diverse economy we have here in Houston, and the fact that “the Third Coast has a concentration of energy jobs five times the national rate, and those jobs have an average annual salary of $100,000.”

Houston definitely has a diverse and thriving economy that is fueled by the energy boom. It has long earned its recognition as the energy capital of the world, so it is not surprising that Forbes’ is now giving Houston the distinction of being America’s next great global city.

The August issue of the Greater Houston Partnership’s “Economy at a Glance,” points to three specific factors that are driving the Houston economy: “oil and gas exploration, U.S. economic growth and international trade.” These factors continue to play an important role in the surge of relocation activity to the Houston area, and are making Houston an easier sell than ever before.

As Houston continues to grab the national spotlight, we should continue to see smiling faces among our inhabitants. Houston is not just one of the friendliest cities in America, but is now among the happiest.

Click here to read the full article.

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Want to know how Houston dodged the recession bullet?

Posted by houstonvijai on September 6th, 2013

Recession is history now and nobody talks about it. We just want to forget and go past the bad days. At the same time, it is good to visit back and learn anything we can from the history. So I like to share an interesting article which I came across about how Houston has become the No.1 in Job creation and Housing destination.

Obviously, Houston is blessed by topography and geography. But the city’s recent success is really a masterclass in learning from history as per the reporter from The Atlantic. He says, Texas killed it. The main reason for that is avoiding the same mistakes using lessons learned from previous recession. It dominated the recession, crushed the recovery, and in a new analysis of jobs recovered since the downturn, its largest city stands apart as the most powerful job engine in the country — by far.

The ten largest metros have recovered 98 percent of the jobs lost during the recession, on average. But Houston, the first major city to regain all the jobs lost in the downturn, has now added more than two jobs for every one it lost after the crash. That’s incredible.

Houston job growth

So, how come? There’s the abundant land and famously favorable business climate (although let’s not dwell on the actual climate). With its proximity to oil and Mexico, Houston is blessed by topography and geography. But the secret sauce of the city’s success might be something else: history — and an ability to learn from past mistakes.

The recession in Texas was relatively mild, partly thanks to mistakes learned by the region’s real estate and energy industries, said Patrick Jankowski, an economist and vice president of research at the Greater Houston Partnership. Texas “won” the recession not only because of the jobs it’s created, but also because of the jobs it’s hoarded — particularly in energy.

The Arab Oil Embargo in 1973 quadrupled oil prices in just three months, sparking a drilling boom that at one point accounted for half of all jobs in Houston’s export sectors. But when oil prices collapsed in 1982, oil and mining jobs fell by 57 percent. “By the time Houston’s economy hit bottom in January ’87,” Jankowski said in an email, “the region had 221,900 fewer jobs than it had five years earlier.”

But the energy industry avoided a dramatic boom/bust cycle this time around. “The region lost one in 22 jobs this recession versus one in seven jobs during the recession of the ’80s,” he said. Why were layoffs so mild? The story I’ve typically heard and reported is that energy prices fell later and recovered earlier than the rest of the economy. But Jankowski has another surprising theory. Houston’s energy sector is remarkably old — the average age is over 50 — and companies were nervous about laying off too many veteran workers before they had time to pass their skills down to the younger generation. Houston’s energy demographics “helped to moderate energy industry job losses,” leading to fewer job losses overall.

The 1980s also taught Houston a lesson about real estate. Between 1982 and 1987, Houston suffered “one of the worst regional recessions in U.S. history,” Jankowski said. The metro area lost more than 220,000 jobs — one in seven in the region — but added nearly 188,000 housing units, as developers ignored the signs that demand had plummeted. The results were disastrous and scarring for the real estate industry.

Houston avoided over-building problems in this recession by tightening lending and home construction in the early years of the crisis. Houston didn’t really have a housing bubble in the 2000s. The ratio between its median house prices and median household incomes peaked at 2.7 in 2006. By comparison, a typical Miami family would have to spend five-and-a-half years of their total income to afford an average home in the city by 2006. In Riverside, it would take nearly seven years. So as housing values cascading all across along the Sun Belt — by 40 percent percent in Miami and 44 percent in Riverside — they merely dipped about 2 percent in Houston.

The Great Recession was worse than every post-war recession in just about any metric you pick. Except for one. Global trade continued to climb after the nadir thanks to developing countries like China carrying what was left of world growth. Houston was uniquely poised to capture the gains from a growing world, due to its proximity to Latin America and its strength in energy. Between 2008 and 2010, “more than 100 foreign-owned companies relocated, expanded or started new businesses in Houston,” Jankowski wrote.



While moderation protected the city during the 2000s, an openness to overseas (or over-the-boarder) business boosted job creation at a time that domestic demand was lagging badly. Although human mistakes can muck up the blessings of topography and geography in Houston (and they have), the city’s long memory helped it avoid the same mistakes of over-building and over-firing that plagued other cities and states.

We all only know that Houston has become nations moving destination to Jobs, inexpensive housing, low cost of living etc., But what made it to sustain this growth is good to understand and learn about.

Source: TheAtlantic.com

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Must Know: Home Mortgage – How to decide between Builder’s lender and Outside lender?

Posted by houstonvijai on August 23rd, 2013

For any home buyer, finding the right mortgage lender is a very important one and nailing down the lower rate with less fees is another key factors as well. If you are buying new home or building one, it gets bit complicated. These many builders associate their incentives depending on whether you are using their lender or not. So it is become a confusing decision for buyers when choosing the right mortgage lender. Let me help you out a bit in this post.

I get this question every time I deal with buyer who either build new home or buy new inventory home. It is not an easy decision because it involves few complicated numbers and I have to guide them to make a decision. As a person who got some financial education passing CFP exam, I try not to make it complicated and explain only steps what they need to do and how they can narrow down the option to determine their best choice.

This is what I always tell my clients, if you are building a home, you don’t have to worry about lender until you get closer to closing the home which is 45-60 days before home completion. Other buyers they need to worry about it as soon they signed the contract. First of all, do window shopping for lenders whether its builder lender or outside mortgage broker. Try to get the rate and fee information and compare them. Weed out lenders/mortgage brokers who don’t give competitive rates or charge too much fees. Once you narrow down a few, ask them to send Worksheet and GFE(Good Faith Estimate) for the loan amount with their promised rates.

Once you have these docs, it will give you a general information about interest rate, how much lender will charge for processing your loan, title charges, what are your loan prepaids and other property related fees. Let’s first worry about the lender fees.

Lender fees
In most cases, lender changes loan origination fees, documentation fees, courier fees, attorney fees etc.,. Compare that with builder’s lender. For example,
Builder’s lender fees = $5000 – $3000 builder closing cost credit = $2000 (still need to pay)
Outside lender = $1000 (Zero origination fees plus all other fees included)

In above, even after builder credit, you will be paying $1000 more with builder’s lender compared to outside lender. Many builders try to attract buyers to their lender by promising to pay 1% closing cost but eventually its a wash and they charge more lender fees above 1% closing cost contribution. So there is no real saving in going with the Builders lender unless there are parameter which favors. Let’s come back to that in a bit.

Interest Rate
Now, let’s get to the real meat of the topic, Interest rates which is very important. You will be stuck with this rate until you own the house or mortgage. So you should do better job in getting a competitive rate which will reduce your monthly payment. Even .5% difference in rate will have $25-$50 monthly payment increase per month depending on the purchase price. Most of the time builder’s rate will be always higher than outside lender. You should create a spreadsheet and calculate the monthly payment for each lender and see the difference in saving for a year and projecting to 5 years. Assuming you have $600 saving/year going with outside lender compared to builder’s lender. That’s approximately, $3000 savings for 5 years.

Title Service Fees
Third step, let’s figure out the title services cost. Title company cost will be same whether you go with outside or builders lender but only caveat builder might pay the title policy fee which is part of title company charges. Let’s say its $1500 and other title charges around $700. You will pay total $2200 if you go with outside lender whereas only pay $700 going with builder lender.


Prepaids
Next fees which will come into picture are Prepaid which are prepaids to an escrow account that’s worth 3 month of insurance and taxes plus interest payment for your loan amount for balance days in this month. The Escrow account prepaid can be avoided if you do an escrow account waiver. You can read more about its benefits in my another blog. It has no direct impact over your lender selection but lenders charge escrow waive fee of around .25% of your loan. Especially Builder’s lender charges and rarely waive for free but outside lender most of the time can be negotiated to waive for free. At this point let’s assume, both lenders waive the escrow fee for now.

Interest prepaid depends on the interest rate so it changes depending on the interest rate you lock with the lender. Still this doesn’t have any impact on lender selection.

Other Fees
Finally there are other fees like HOA transfer fee, Cap fee and HOA Annual fee and others which cannot be avoided whether you go with any lender and they don’t change because they are outside fees.

Let’s compare our numbers from the example now,
Builder’s Lender GFE = $2000(lender fees) + $700 (title) = $2700
Outside Lender GFE = $1000 + $2000 = $3000. Difference = $300 – Pay more with outside lender.
Savings going with outside lender due to low interest rate = $3000
Overall you will be saving $2700 going with outside lender.

Being derived to this point, there are other things which will impact this decision. Whether you have money to pay cover those extra fees during closing. Can the outside lender close on time or within the time limit provided by the builder? These questions will also drive the decision in some cases and few buyers don’t have a choice other than going with builder’s lender due to this restriction.

In summary, I just want to talk in detail about this topic and show which items you need to compare the most and decide whether you will save by going with outside lender in longer term even though you have to pay closing cost upfront. Just keep in mind, Builder’s lender are there to make money and they are not going to give it cheap so even though they give closing cost incentives it comes with more added cost compared to outside lenders. Keep these points in mind and make your decision accordingly. Also your Realtor should help you in this decision process as well.

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Real Estate – Recovery to Bubble already!!!.

Posted by houstonvijai on August 15th, 2013

We just got the holes plugged in our housing ship and trying to sail back out in the ocean. But it seems like wind(price) is blowing high, pushing ship to move fast which might not be all good. I still remember those days just a year ago when many were asking whether we will ever see the end of the tunnel and as soon we are out, we are already heading to next big thing already. Is good or bad? Here is the report from cnbc release few weeks ago.

Double-digit price gains in the last year with multiple bid situations that have caused homes to sell for above asking prices have been fueling renewed fears over a housing bubble forming. Could some areas be overheating?

“Prices in some areas are just out of control,” says Scott Tamkin, a real estate professional with Keller Williams Realty in Los Angeles. “As soon as a good property comes on the market at a reasonable price—bam! It’s gone in multiple offers, often times in cash.”

Tight supplies of homes for-sale, low mortgage rates, high buyer demand, and a high number of investors are all helping to drive home prices up in many housing markets. Prices are rising despite major improvements in the economy, particularly with jobs and incomes.

“Home prices need to moderate,” says Lawrence Yun, chief economist at the National Association of REALTORS(R). “It’s bad news in terms of affordability and certainly not sustainable for prices to rise and incomes to lag.”

Certain markets are heating up faster than others. For example, big cities in the Sun Belt region–such as Los Angeles and Phoenix–have seen prices increase nearly 20 percent in the past year. Meanwhile, other big cities like Baltimore, Nashville, and Columbia, Mo., are up only 3 percent to 5 percent, according to NAR data.

“Economists are cautious to dub the buildup as a bubble just yet,” CNNMoney reports. “Though rising speculation, still cheap money, and potentially easier lending would give prices room to run.”

“We’ve never been able to truly identify bubbles until after the fact,” adds Mark Fleming, chief economist at CoreLogic. To be sure, not all areas are overheated nor have some even recovered since the downturn. But in most big cities, demand is hot, deals are quick, and many properties are getting bid up before selling for cash.

And even though home values are still a far cry from their peak in 2006, economists caution that prices in some areas have risen too far, too fast. “It’s clearly not sustainable,” said Stan Humphries, chief economist at Zillow. Wells Fargo Senior Economist Mark Vitner seconded that: “If investors don’t back off soon, it could lead to a bit of a price bubble.”

A big difference between the current buildup and the previous bubble is that we are only in the early innings of double-digit price gains. March home prices rose greater than 10 percent, according to the S&P/Case-Shiller 20-City Composite. That was the first double-digit gain the index saw since April 2006.

In stark contrast, home prices soared double digits for 45 straight months from August 2002 to April 2006, Case-Shiller data show. Price appreciation peaked at 17.1 percent in the summer of 2004.

Trulia identifies eight markets as overvalued relative to historical prices, incomes, and rents. They include Orange County, Austin, San Antonio, Los Angeles, San Jose, San Francisco, Houston, and Portland.

Click to read the full article.

As you can see Houston is one of the markets which is overvalued and rising high compared to other markets. It has mixed feeling. Especially,People are afraid of prices just going to go up and up and up. With recent interest rate increase, it has already slowed down the activity bit compared to few months ago. With more price and rate increase, it might push more consumers away putting a break which should allow for some correction before we start the new year. That’s my 2 cents.

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