Foreclosures Hit Value Of Properties in Houston

September 1st, 2008 | Tags: Foreclosures

Susan Mosco is a silent witness to how foreclosures are hitting value of properties in Houston. Within six months she has seen 12 persons move out from here. Foreclosures are affecting not only the borrowers being evicted from their homes but also those living in the surroundings not directly connected with the housing crisis.

Another resident Matt Travis had made a heavy down payment when he purchased his house. Right now he is not thinking of selling it. But his apprehensions are that the foreclosed houses sitting empty on either side of the street would bring down the value of his house by thousands of dollars. He had paid $120,000 for it but most probably, at a guess, he will not be getting $94,000 for it if he tried to market it.

The Houston real estate market is going through an extreme chapter. In some areas 80% of the houses are in foreclosures. But there are other areas where the prices of houses have started to climb up. Appraiser Frank Lucco says, “Land Prices are going through the ceiling in some of these neighbourhoods.” The Woodlands can be cited as an example. Five years back Lucco had noted there were about two dozen houses in The Woodlands with an asking price of over $1 million each. In 2007, 70 houses were sold for more than $1 million. One unit was sold for an astonishing $5 million! This raises the poignant question of who are the buyers of such fancy houses? It is those related to the oil industry – of that there is no doubt. Profits from oil are being poured into the real estate market and boosting up the job market also.

The story of the Boyd family is just one of the many who did not suffer any difficulty in leaving California, coming to Houston and finding a job within a week. The Boyds are not worried about finding a house in Houston. The data from United Van Lines show that he is not incorrect. California has been one of the worst hit foreclosure regions. During the first six months of 2008 United helped hundreds to shift from California into Texas. This gives rise to the hope that even those areas in Houston that have been badly affected by foreclosures will get chance to bounce back.

The problem is that the financing industry has not recovered as yet. This means loans to buy houses will be difficult to get.