The Sunday Drive

One of the outings I enjoyed as a youngster was the Sunday drive. After church we would go home, have the customary pot roast and if there was nothing else on the agenda, we would sometimes pile in the ’59 Chevy for a drive around the county. I always enjoyed those outings as my dad would usually venture into areas we had never seen before. That made it adventurous and made me more knowledgeable about the area we lived in.

As a Realtor, outings around Montgomery County are a daily occurrence. After being in this business for over 10 years, you would think that I would have seen every nook and cranny. But on occasion, I still venture into an area I’ve never seen before. And I get those same feelings of adventurousness that I felt as a kid. And that is just another part of being a Realtor that I love.

Recently, my web master incorporated a new header to my website’s homepage that features a slide show of pictures. They asked me to provide 20 pictures to display. I already had a number of nice pictures of homes that I’ve listed over the years. But in addition to property photos, I wanted to incorporate a few photos that represented the diverse real estate market in Montgomery County. I seized on this task as an opportunity for a Sunday drive. But to avoid crowds, I chose a Wednesday instead.

So I recruited my photographer / husband and embarked on a road trip around Montgomery County. We left our home off McCaleb Road about 9AM and headed south across the new FM 2854 overpass. Taking pictures along the way, we headed toward The Woodlands. We went to the Cynthia Woods Mitchell Pavilion and strolled along the walkways and took pictures of some of the architecture and sculptures. We then went to Market Square and took a few pictures of the shops and green spaces. About this time, we realized that covering Montgomery County in a day was going to be a challenge.

We headed back north on I-45 toward Historic Downtown Conroe. We took pictures of the Crighton Theatre along with other historic buildings. It was about noon by then, so we grabbed a deli sandwich at our favorite sandwich shop and ate in their dining room situated in one of the historic buildings on the square. After lunch, we headed east on Hwy 105 and took some photos in Cut ‘n Shoot, at the airport and fairgrounds, the Lone Star Convention Center and the new Lone Star College campus. We then headed out to the treasure trove of landscape photos, Lake Conroe.

No slide show about Montgomery County would be complete without a picture of the lighthouse at Seven Coves. The Southern Empress was in dock, so we managed to get a picture of the paddleboat with the lighthouse in the background. We headed toward FM 1097 and went across the bridge to Playa Vista on Lake Conroe. We get a great photo of Playa Vista with the FM 1097 bridge in the background.

We then went to Montgomery, took a few photos downtown and then went to Memory Park in Buffalo Springs. What a relaxing and scenic park. A great place to reflect on what had become a great, enjoyable day. It was now getting late, so we headed back home down FM 2854. But we stopped several times along the way to take pictures of some of the ranches along this scenic drive.

Back home, we found that we had taken several hundred pictures. I soon found out the more difficult part of this assignment is narrowing down the photos to only 20.
With the economy still struggling and gasoline prices still high, it might be a good time for stay local and rediscover the Sunday (or any day) drive. There’s lots to do and see right in our own backyard.

A Realtor’s Trip Down Memory Lane

The other day I was checking on a home for a client who had moved out of state. As I was leaving, I noticed a yellowed newspaper that had been left behind. I was very intrigued when I saw it was a complete December 2, 1954 edition of The Conroe Courier. I’ve always enjoyed learning about our local history. I find it interesting and I feel it makes me a better ambassador for Montgomery County during my real estate activities. So I just had to read through it before I put it into a safe place for my client.

It was fascinating contrasting the news and ads of 1954 with today’s news. A front page article about women soon being allowed to serve on juries in Texas highlighted how much things have changed. Other front page articles were not that different from current articles, e.g. a road expansion, school bond election, and a shooting. But much of the paper was filled with personal information such as hospital admissions, births, vehicle transfers, and lots of tidbits about local residents’ comings and goings. I suppose to some extent, that level of personal info is still published today, but instead of calling the newspaper, folks just send a Tweet!

There were lots of ads in this issue. Let’s see, Ipana toothpaste is on sale for $.53 at Thompson Food Market, Flaxman’s has a 16 oz. jar of Foreman’s Picallilli for $.33, and Penney’s has 60 gauge sheer nylon hose with slim dark seams for $.50 a pair. For entertainment we have Julius Caesar playing at the Crighton and at the Hi-Y Drive-in Theater, Ronald Reagan stars in Prisoner of War.

But being a Realtor, the most interesting to me were the real estate ads. There were 4 real estate firms with ads, none of which are still in business today. Many of the homes were described by number of rooms rather than by square footage. Some of the features mentioned in the ads were venetian blinds, in-laid linoleum, a chicken coup and a hog proof fence. But the most unusual ad by today’s standards was for an 8 room rustic log and asbestos house adjoining the Country Club.

Yes, things really have changed in the last 57 years. And I would guess that few communities have changed as much as Montgomery County because of its explosive growth. We’re almost 20 times as large as we were in 1954. The construction of I-45 and Lake Conroe probably had the most impact. I-45 made Houston much more accessible and made Conroe attractive as a commuter town. The Woodlands along with other communities along I-45 sprouted up to meet the increased demand for housing. And Lake Conroe provided another alternative for those who enjoy the many amenities of lakeside living.

All of this growth has caused the local real estate industry to change as well. First of all, there are a lot more than a handful of Realtors these days, so it has become a much more competitive market. And with so many options available, Realtors have had to become well versed in the variety of housing options, including golf course homes, waterfront homes, estate communities, planned communities, condominium complexes, to name just a few. We also have to be adept in working with the many different types of buyers, including second home buyers, retirees, investors, first-time home buyers, up-sizers and down-sizers. In my own practice, I have had increased requests from current and soon-to-be retirees from all over, wanting to live in Montgomery County because of its natural beauty, temperate climate, proximity to great health care, affordability, and its many amenities.

Montgomery County has a great history and a great future. Much credit is deserved by those involved in the preservation of that history. Our beautiful downtown Conroe and the recent restoration of the Conroe Country Club are just a few examples of how history has been honored while meeting today’s needs. It is truly a joy and privilege to be a Realtor in Montgomery County. Now if my ancestors would have had the foresight in 1954 to purchase the advertised “43 acres near Hwy 105, 12 miles west of Conroe, nice home and lake site, ½ minerals for $3,800”, I would feel even more privileged!

The Envelope Please

I enjoy watching award shows for the entertainment industry, especially the Academy Awards. I must admit though that I often don’t understand how the voters distinguish between the different performances. I suppose you have to really be into movies to appreciate the subtle differences. Awards handed to Realtors on the other hand are much simpler as they are usually based on production volume statistics such as most sales. Just imagine if the Academy Awards were based on production volumes. John Wayne would have won the majority of Best Actor awards during his heyday as he was one of the most productive actors in movie history with 142 leading roles. But alas, the Academy Awards criteria for recognizing excellence is somewhat more complicated, so the Duke ended up with only one Oscar toward the end of his career. If Realtors’ work was as transparent for all to see as actors’ work is, the results might be interesting. And it certainly would be helpful to future buyers and sellers of real estate.

Well, I’ve really strayed from what I wanted to write about in this column. I actually did want to talk about awards, but not Realtor awards. I thought it would be interesting to give some awards to some of our local neighborhoods. So I asked my broker (who is also my husband) to do some statistical analysis on sales of single family residences in various neighborhoods in and around the Conroe and Lake Conroe area. I should note that this is not a complete list as the number of neighborhoods are simply too many and my broker has limited patience to satisfy my curiosity. But he did try to pick up many of the more popular neighborhoods and a mix of older and newer neighborhoods. And to get a meaningful sample, he selected data over the last 24 months and only included neighborhoods with at least 10 sales during that period.

There’s no opening song and dance number, so let’s get right to the awards. First up is the Mayflower Moving Van Award for the neighborhood with the most sales. By a landslide, it was Walden with 377 sales. April Sound and Bentwater get an honorable mention with around 200 sales each. Closer to Conroe, River Plantation and Graystone Hills came in neck and neck with 95 and 93 sales, respectively.

The Lamborghini Award is for the neighborhood in which homes sold the quickest. Pass the envelope please. The award goes to Panorama whose 58 sales had a median time on the market of only 52 days, a far cry from the worst in this category at 248 days. It shall go unnamed, but I will hand out the Yugo Award in a private ceremony.

The Porcelain Award is for the neighborhood whose sales reflect the highest median number of bathrooms. And we have a 4 way tie. Graystone Hills, Crighton Woods, Crighton Ridge and Bentwater all tied with 3 ½ baths. Now that’s a lot of porcelain.
The Yao Ming Award is for the largest home in our sample and goes to Crighton Ridge whose median sold home was 3,940 SF. It just barely overshadowed its cousin Crighton Woods by 36 SF. And as no surprise, it also won the Donald Trump Award for most expensive median home.

Finally, the Horizon Award is for the newest median home sold and is awarded to both Graystone Hills and Crighton Woods where the median home sold was built in 2008. The Heritage Award is for the oldest home sold and goes to Tanglewood whose median home sold was built in 1965.

This was all sort of silly and isn’t very meaningful. But with an abundance of real estate articles about market conditions, I just felt a need to do something different and perhaps get a chuckle or two. But what I personally gained from all this is that the Conroe and Lake Conroe area has a wide diversity of homes for sale. And like actors and Realtors, neighborhoods are all unique and have their own personality. We truly are very fortunate to live in such a wonderful and diverse area.

Reflections on the Housing Market

As I’m cleaning up the mess in the kitchen that my husband’s left for me after one of his cooking endeavors, I’m wondering why he isn’t more careful while preparing meals. I’m very grateful that he has taken over much of the cooking chores over the last few years and I truly enjoy his tasty meals, but he just isn’t focused on minimizing the aftermath. Then it dawns on me that since we have an agreement that I will clean up after he cooks, he simply has no incentive to be less messy. And that brings my thoughts to our protracted recovery from the housing collapse of several years ago. Homebuyer friendly government policies combined with a mortgage lending process that increasingly disconnected loan underwriting from loan risk, many mortgage loans were approved in a manner like my husband cooks. Loan originators and underwriters did a very good job at getting loans approved but became more and more removed from the consequences of those loans defaulting since the financial risks were offloaded to someone else.
But what’s done is done. Our government has taken actions to tighten up the mortgage lending process and to increase regulation in the financial markets. Attempts have been made to ensure that appraisals are more objectively prepared and credit hurdles have been raised. While these new regulations may prevent a future housing crisis, only time will tell what the impact will be on future growth in the housing market. At the same time our government has also tried, with limited success, to ease the housing market’s transition to these new standards by providing distressed homeowners assistance in keeping their homes, 1st time buyers’ tax credits on the purchase of a home, and long time existing homeowners tax credits in buying a different home.
All of this has come at a significant cost. Bailouts of financial institutions and subsidizing the housing industry through tax credits have been very costly and have increased our national debt. At the same time, loss of confidence in our economic future has eroded the wealth of our fellow citizens as interest on savings is at an all time low and the stock market has yet to come close to regaining lost ground.
As I review my own business over the last couple of years, I’m reminded how the above events have affected the nature of my work. For example, more of my buyers have been investors in rental properties, and I’ve had an increase in clients either trying to lease out their properties or looking for properties to lease. I suppose it is only logical that massive foreclosures combined with tightened lending practices would result in a number of owner occupied properties turning into lessee occupied properties.
Analysis of historic HAR MLS statistical data for Montgomery County tells me that my experience is echoed throughout our market. As I look over the statistics, I notice that 4 years ago, about 1 in 5 closed real estate transactions on single family residences and condos was a lease contract while 4 in 5 were sales contracts. Most currently, about 1 in 3 closed transactions are leases. The significant change is due to lease transactions increasing almost 20% and sale transactions decreasing over 25%.
Of course, everyone wonders when the real estate market will recover, if ever. Unfortunately no one knows, as there are just too many moving parts. But we do know that in Montgomery County, we have a fairly good economic environment and a great quality of life, so I remain cautiously optimistic. Meanwhile, if anyone can think of a way to make my husband a tidier chef, please let me know. Perhaps more regulation?

The State of the Foreclosure Market in Montgomery County

If I asked a group of people to say the first word that comes to mind when they hear the word “foreclosure”, I would probably get lots of different responses. Many would say “travesty”. Some would say “opportunity”. Any lenders present might say “backstop”. It all depends on one’s perspective.

2009 was another year in which too many homes went into foreclosure. While foreclosed homes are sold to the highest bidder on the courthouse steps, most of them have first liens (i.e. mortgages) with a remaining balance that is more than what buyers are willing to bid. Since the first lien holder is usually willing to bid their lien amount, they typically end up as the highest bidder. So the ownership of most homes in foreclosure ultimately transfer from the individual homeowners to their lender.

After the foreclosure is finalized, the majority of those properties are then listed and eventually sold by Realtors. Almost 1,100 of the 5,500 single family residences sold by Realtors in Montgomery County in 2009 were the result of a home foreclosure. That’s a disturbing 1 out of 5 homes. While this is a consistent ratio with the last several years, it is up from the 1 out of 7 homes in 2006, which is still too many.

If we dig into the 2009 numbers a little deeper, we find that Northeast Montgomery County, including Conroe, had the worst foreclosure experience. One out of three of the homes sold by Realtors in this area were foreclosures. Southeast Montgomery County had similar experience with about 1 out of 4 homes sold being foreclosures. Southwest County and Northwest County had the same experience with 1 out of 6 homes being foreclosures.

These rates are mirrored across the country and are at the core of our economic recession. The U.S. government has taken steps to help. The Home Affordable Modification Program was implemented to help homeowners facing foreclosure by reducing mortgage payments to qualified applicants. To reduce the number of future foreclosures, the House of Representatives has passed new legislation called the Consumer Financial Protection Agency. It now lies in the hands of the Senate, so its future is uncertain. If it is passed into law, it is hoped that the final bill will not only protect the consumer but will also not cripple the mortgage and housing industries.

While it is somewhat reassuring to know that our government is concerned about the high number of foreclosures, one can’t help but feel sad about the many good families who are facing, or have already gone through, a foreclosure. In the best of circumstances, it will take a long time to become eligible again to own a home. In the worst of circumstances, a family may never own their own home again.

Having said all that, without the foreclosure process, few of us would be able to get loans to purchase homes. Our housing industry depends on mortgage lenders and the mortgage industry depends on foreclosure laws to mitigate their risk and provide an effective backstop on possible losses. And finally, the buyers of foreclosures are an integral part of the foreclosure process. For without them, the lender would have no way to monetize their collateral.

Many people have found good opportunities in the purchase of foreclosed properties. Many foreclosures are attractively priced and are being bought up by first-time homebuyers, buyers trading up from existing homes, people moving to our area, and investors. As this article is being submitted, there are 200 foreclosures on the Montgomery County real estate market ranging in price from less than $50K to over $1 million. They exist in virtually every neighborhood and price range.

If you no longer are able to pay your mortgage, work with your lender, financial advisor and Realtor to understand your options. The stakes are high, so it is wise to be proactive rather than reactive. And if you are interested in exploring the foreclosure market, contact an experienced, local Realtor. There may be just the property out there that you have been waiting for.

You can contact me at 936-537-1656 or at Claudia@ClaudiaHohlt.com.

How to Start Looking for a Home

So you’ve outgrown or simply grown tired of the place you’ve called home the last several years. After some serious thought, you’ve finally decided to start looking for a place that is more suited to your needs. So where do you start?

The first step of any real estate transaction is to meet with your financial advisor. Perhaps that’s you yourself. But whoever it is, have a determination made of the amount of home ownership costs that your budget can comfortably afford. The budget for home ownership costs should include mortgage payments, real estate taxes, home insurance, HOA fees, maintenance and utilities.

The next step would be to meet with a mortgage company or banker to get pre-qualified for the amount of loan that corresponds with the mortgage payment you have already determined. This is a relatively easy process, but one that is very necessary at the time that you submit an offer on a home. A seller will typically want to see evidence of your ability to purchase their home before they will consider your offer. I should note that the mortgage company will calculate a couple of debt to income ratios that will determine the maximum mortgage payment / loan amount that they feel comfortable with. And that is the amount that they typically will indicate on the pre-approval letter. If it is lower than what you calculated, it is a good wake up call. Go with the lower amount. But if it is higher, you should stick with the lower amount you already feel comfortable with. Everyone has their own appetite for risk. But when taking into consideration the security that home ownership provides, it seems prudent to stay within your comfort level.

At this point, you can start seriously looking for a home. With the internet, you can search a myriad of websites to get a feel for home styles and prices. But after some preliminary research, I recommend that you choose a real estate agent to represent you. Keep in mind that an experienced, full-time, local, service oriented real estate professional can answer questions on schools, neighborhoods, demographics, etc., to help you decide on the selection criteria of the homes you would want to view. Then, the realtor can quickly sort through the thousands of homes on the market in Montgomery County and present to you a packet with details on homes that meet your specific criteria. And then the realtor can make appointments and accompany you to view the homes and give you their professional opinion. And the best part of this is that it’s free! Remember, the seller pays the realtor commission.

After you select a home, your realtor will be an integral part of the negotiations by providing you with comparable home values and working with you and the seller’s agent on various contract issues. Once your offer is accepted, your realtor will prepare the contract and provide information on inspections, appraisals, walk-throughs, etc. In fact your realtor will be with you every step of the way until completion of the contract. Buying a new home can be one of the most stressful events you will ever encounter. But it doesn't have to be. I feel that following the above steps will minimize the stress and may even make it a fun, enjoyable adventure!

For more information, please visit my website, http://www.claudiahohlt.com/, or call me at 936-537-1656.