As compared to a year ago prices have fallen 1.6%, however this is a blessing compared to other markets which are dealing with prices falling in the range of 40%. Additionally, the Houston Association of realtors has stated that there has been also a decrease in the number of listings. This is creating some stability in prices of homes here, since that is helping us level out our prices with decreased demand.
I think that prices are holding stable as people are pulling off sales and turning them to the rental market. When many people are renting one home, they will shun using realtors and rent it out themselves. It is easy to manage a portfolio of one home for many people unless they travel frequently.
However, it is difficult in this market to find good renters because of the uncertainty in the market. The economy is uncertain and people are begining to lose jobs. If a person has a job today, there is no guarantee that they will have a job tommorow. In addition, the last 10 years have created a easy credit environment, and today, many people are paying the piper. Bankruptcy laws have become much tougher on individuals, so they are unable to shed bad decisions. Additionally, now with banks and creditors suffering massive liquidity issues, people are unable to get easy transfers so they must pay back these incredible rates.
People must now deal with the fact that they have poor credit ratings , which will further limit the risk that banks will take on them in the future in regards to providing mortgages. This is only further limits the American ideal of every man owning their land to a more select few.
Even if prices fall, how many people can afford $100,000 homes? Who can afford to pay $3000 for property taxes on January 31st, 2009 in one payment? In the movie, “Its a Wonderful life”, Jimmy Stewart ran a small savings and loan that provided lots of loans to various people in his community. However, we can’t trust a savings and loan to save us today because we bailed those guys out in the 80’s.
Posted by ashokalion 
