The Victoria Residential market seems to have found its pace. It appears to have bottomed
and started to move slowly forward. Other Texas markets are beginning to show similar signs.
The exceptions in our areas are the coastal markets, such as Rockport, where inventories are
high and prices are adjusting.
Several observations as we look at the home market: Past, Present and Future.
* The three months ending February 28 show improvement over the same period last year. This
is positive compared to the 12 month comparison. Remember we still had very loose financing
the first half of 2008 which is reflected in the prior 12 month comparison.
* Activity is about 20% below the peak years of 2006, 2007, and 2008. It is going to take a
while to get back to that pace.
* Gone is the financing for people with no money and weak credit.
* 1/3 of the sales are below $100,000. 2/3 below $150,000, and 84% below $200,000.
* Median price of $125,000 has flattened out. This is below both state and national median
prices. (The state median price according to the Texas A&M real estate center is $137,100.)
* Inventories exceed what they have been in the past but not excessive. Inventories may be
slightly over weighted on the upper end.
* The first graph is one to watch as the gap between the number of transactions and price narrows.
It will be interesting to see which moves the most.
* A number of the buyers are first time buyers and the $8,500 tax credit ends April 30th.
* FHA is expected to tighten loan requirements.
* The government has announced it will quit buying mortgages. This could affect the market.
* Interest rates continue at historical lows.
* The job market in the mid Texas coastal region seems to be improving.
* Finally, homebuilding is at a historically low pace. Fifteen permits were issued by the City of
Victoria since October. This could ultimately move prices up and probably has for existing
houses.
Buyers are still in control of the market but not by much. Properties priced competitively seem to
sell quickly, especially those under $200,000. Homes in Victoria are very affordable and a good
value.
I believe that the market will continue to improve barring any disruptive force. As the job market
improves and inventories come down, prices will adjust upward. Appraisals well attempt to hold
prices but market pressure will ultimately prevail.
To keep up with the market, click on our blog on www.ronbrown.com.