Mixed indicators = Mixed results

So the fed dropped a key interest rate again today; that's 2 times in as many quarters. Additionally there have been some employment numbers out. While the quarter percent cut in the discount rate was not the hoped for half a percentage point it was still an indicator that the Fed is watching the credit crisis very closely.

What does it mean to us? Well, locally, Houston's economic outlook continues to be bright; for the most part. If one discounts the stalemate in the real estate market. Employment numbers look better than this time last year. Other expansion projects, especially in the bio-tech and medical sector, have just begun and others are well underway that will provide excellent stimulus to our economy.

The real estate market in Houston is a bit sluggish right now but data from various sources suggests this is merely the result of local consumer's lack of confidence based on national news stories of doom and gloom in far flung housing markets. There are many markets that are showing price gains again, some of them in double digits. In fact the Houston Association of Realtor's consumer web site HAR.com is now number 20 on the list of most popular Real Estate related web sites. Additionally national statistics show some increase in homes sales in the next few months.

It's important to remember that real estate is local. It is affected, sometimes significantly, by economic factors outside the market's geographic area but rarely are those permanent; the local economy holds a much stronger sway over a city's real estate market. Also, too often, news outlets, which are for-profit concerns, are often more concerned with grabbing attention more than presenting news for its own sake.

The best advice I can give; talk to someone who is knowledgeable. Talk to your CPA or investment counselor. Talk to your REALTOR®. Talk to someone in manufacturing or logistics. Find out about their position and you'll have a much better idea of what's coming up and can make a more informed decision.

It's a nice place ... but I can't afford it

This is a phrase I hear in my practice on a regular basis. Houston is still the 4th largest US city by population and what's more we have a busy amount of new residents relocating. Houston's thriving economy from hydro-carbon and energy companys, education and medical industry draws large numbers of people to live, work and thrive in our cosmopolitan and unique metropolis.

There is a rumor that Houston is one of the 5 most affordable places to live in this country. This is in part based on the very affordable cost of housing and the strong local economy. As I've mentioned before Houston's economy is based around the world and that makes it one of the most resiliant.

If it's so affordable here why do I hear "I can't afford it" so often? The answer is simple; Houston is a VERY diverse area and the cost of housing varies greatly from place to place. Just like any other major urban area there are some areas of town that are more coveted than others.

So how does one overcome this? Well, first of all, consult a professional. Any REALTOR® worth his or her salt will be able to speak intelligently about housing costs and what is driving home values in a given area.

I pride myself on my current knowledge of home prices and the whys and wherefores of those valuations. It's important to know what to compromise on and to look at your home purchase in the long term. When you decide to sell how will the neighborhood look to future potential buyers? Chances are if you were anxious to buy in a particular location others will be too.

Houston is slowly getting more friendly with condominiums, townhomes and other home styles that allows us to densify sensibly while allowing us to live close to the fantastic arts and leisure our great city has to offer and still keep home prices affordable. (Ask me about some of the amazing prices on brand new town homes close to just about anything you can think of!).

Obviously Inner-Loop living is going to be more expensive but here are some ideas to help you find the right place that you can afford:

• Trade in yard space for living space: Often times you can get more house for the money if you are willing to give up on yard size or even eliminate yards altogether. Remember, our warm weather means nearly all year spent on mowing and upkeep in addition to an exceptionally long fall where leaves will clutter your landscaping for a couple months instead of just a few weeks.
• Have your REALTOR(r) look for undiscovered neighborhood: A savvy REALTOR® will be able to search out those undiscovered neighborhoods that are cost effective but still offer everything you want and need.
• Smaller space for a Better Place: There are very few problems with a home that cannot be cured. Location, however is one. NO matter how fancy the upgrades in the kitchen you can't remodel a home to be further away from a freeway or closer to the school. When buying a home consider losing a few hundred square feet of living space to get into that home on the cul-de-sac or in the better school zone.
• Follow the money: Look for a smaller home in an affluent neighborhood. When the time comes to sell others will undoubtedly do the same. But also, look for a house with lower property taxes and be certain to take advantage of all your exemptions. Lower property taxes can help you afford more home. Again, consult your REALTOR® to find the lowest tax rates.

Hope these tips have helped! Feel free to ask me for details or if you have any questions or comments.