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Villas at the CrossRoads in Benders Landing Estates

Villas at the Crossroads in Benders Landing Estates

If you haven’t been to Benders Landing, it’s worth taking a view.  The Crossroads at Benders Landing is a community within a community.   This is Trendmaker’s only community in Spring – minutes from the Woodlands, a short distance to the ExxonMobil campus, 5 minutes to the Grand Parkway and 30 minutes to downtown Houston.   Trendmaker has developed 4 multi-acre lots inside the entrance to Benders Landing Estates. One of the corners is the called The Villas; the other 3 corners,  The Estates.  The Villas are approximately 2800 – 3000 sq feet.  The Estate homes are 4600 – 5500 sq ft.  These homes are located in a private, gated community.   The Villas have 7 new spec homes for sale and 7 lots left to choose from if you decide to construct from ground up.  After the remaining 14 are sold, there will be no other Villas built – which adds immediate value to this community.  As an owner here, you have access to BLE Clubhouse, which provides tennis courts, an oversized lap pool, a children’s pool/play area, a small workout facility, basketball courts, a soccer field and a launch area for canoe size boats. Prices for these homes are conservative for the area.

For further info contact Michele@MicheleMarano.com

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Real Estate: Burst or Bigger?

 

by Michele Marano, May 17, 2016

Depending on what part of the country you live, some states are showing signs of, yes – once again, a real estate bubble.

New York, which always maintains much higher real estate prices, compared to most other major cities, has soared even higher. So where can these prices go?  Although there seems to be no stopping on the upside – no apparent ceiling, are prices justified based on local economics and global demand?

If you’re familiar with any type of market, you will inherently understand that no market goes in one direction – up – forever.  Markets tend to correct at a 7 year span, so it seems historically proven.  Our last housing bubble was a result of faulty credit ratings the industry failed to recognize in 2007-2009.  While prices peaked near 2006, there was a slow but consistent turn in prices, homes foreclosed and the inflated costs steadily adjusted from New York State to California, hurting major cities in Florida, Arizona and Nevada.

Now, years after the mortgage debacle, the banking industry found comfort again in lending across all states.  With a good credit score and income to prove, you can purchase a home with as little at 10% down, at a 3% interest rate.  But really, are economics so good in these cities that prices cannot stop rising?

I don’t think so. And rates will not stay this low forever.

Typically, a market is driven by demand; good economics and scare land.  Global and local demand push prices to inflated levels, leaving fewer able to purchase, which in turn causes rentals to soar. A typical New York market.

So why doesn’t Texas ever over-inflate?  Houston, a city whose demand is typically driven by the energy industry has already had a correction in lower oil prices, the main reason real estate slows and then flattens and in some areas comes to a halt.   In addition, there is so much land annexed to the city, any growth in population, only levels out pricing.  The good news is the correction is taking place; shaken economics caused by the drop in oil prices and enormous amounts of layoffs for the past year and a half.  Although some people may have lost jobs, it doesn’t crater the real estate market – it only creates a flattening – while cities around the nation are over-inflated.

While sales have halted in areas like the Woodlands and Spring, builders have taken caution selling existing inventory before adding  risk.  Some builders, projecting  a near future increase in demand have started projects that will not be complete for 6-12 months, keeping things at a slow pace until the market heats back up – and surely it will.

So what makes Houston so attractive to buyers?  Housing costs remain lower than the national average, even when the market is soaring.  Houston, considered the Energy Capital of the World, keeps investors and foreign buyers pouring in from around the globe.  This helps maintain a momentum in sales even when things slow – housing under 250k is attractive to investors and new buyers and housing over 500k is an option to those who want to maintain a secondary residence – whether it’s for business or investment.  ( I”ll discuss Houston’s multi-million dollar high-rise market next month.)

In addition, Austin maintains “most desired” city to live for many reasons:

  1. Center for Film
  2. Center for Technology – Silicon Valley Southwest
  3. Home of the Formula 1’s Circuit of the Americas raceway.
  4. A place Fortune 500 companies are either headquartered or have regional offices which include Apple Inc, Cisco, eBay, Google, IBM, Intel, Texas Instruments, Oracle Corp., Whole Foods Market, and of course Dell is headquarter moments away in Round Rock – a small suburb.

Texas, a state which allows for a very good real estate market – unlike other cities, gives one the ability to purchase at discounts, and then profit when the market turns.  Of course, you must have the smarts of how and when to do so.  You just need to recognize when there’s an opportunity to buy and know when the time comes to sell.

While other parts of the nation may be bubbling, the risk of that happening in Texas is minimal to none, as things have already cooled off.  Oil being on the down since last year (and now slowly inching up) has allowed the market to level – a chance to sustain moderate pricing – not over-inflated levels like in some of the states I’ve mentioned.   For more info. contact Michele@MicheleMarano.

Next month, what’s up with Houston’s rise in high-rises?

 

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Road Sign Changes for Riley Fuzzle

 

 
If you are following the signs “End Road Work” and “Road Work Ahead”, it looks like more drama signs for your commute in the new year.  Traveling in and around Riley Fuzzle and Rayford Rd, or if you’re anticipating a commute utilizing the Grand

99SignsGoodParkway, signs of completion are not that far in the horizon.  According to the Grand Parkway Association, “Segment F1, 290-249, and Segment F2, 249 to 45N will likely open first, possibly in February 2016.  The direct ramp from 45 SB to GP WB and GP EB to 45 NB will open with segment F2.  Segment G, 45N to 59N, will open later, likely in March 2016.  The ramps at Hardy Toll Road will not open until the contractor for Harris County completes their work.  That means the area around Riley Fuzzell, and the Tollway will not open until March 2016.”

As far as retail near the Benders Landing community, signs are showing new businesses on the way. Other than the existing grocer, a gas station and a pharmacy, Capital Retail Properties’ site poses new commercial centers indicating AT&T Wireless, The UPS Store, Chipotle, Whataburger, Bank of America, Pollo Loco, Starbucks Coffee, Today’s Vision, Made Ya Smile Dental, Mattress Firm, Pet Supplies Plus, JK Nails, and a possibly a sushi restaurant.  In addition, there will be a Walmart Super Center and Panera Bread in the same area.  Further east on Riley Fuzzle, will be Kroger, Pet Smart, Chick Fil A, Chilis, Popeyes, and Santikos Theatre – are expected at some point in the near future.

Considering long-term growth associated with the area, and ExxonMobil’s campus a short drive away, one would think a brand fashion giant would woo the neighborhood.  Convenience and value is what people look for in retail centers within their communities.  Multiple food-type eateries – other than fast, would be appealing to families and couples so it’s not necessary to leave the area.  A quaint deli, a tea room and a few white table cloth restaurants would most likely please many.  For so many of us, it would be of tremendous value to grab a nice not to far from home.

 
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The Impact of Oil, Gas on the US Housing Market

Courtesy of Rigzone interviews Michele Marano on the impact of Oil on Houston Housing

by  Valerie Jones, Rigzone Staff Friday, March 04, 2016

Just a few years ago, the industry was in an upcycle – oil prices were high, drillers had discovered new ways to extract oil and gas and jobs were plentiful in the oilfield. Workers flocked to oil-rich cities like Houston; Midland, Texas; and Williston, North Dakota. The housing markets in these areas saw a heavy increase in home sales. But these days, sales have slowed down quite a bit.

“We are not excelling anymore. We are maintaining,” Warren Ivey, managing broker and owner of Century 21 The Edge and regional vice president of the Texas Association of Realtors, told Rigzone. “While we’re not seeing a tremendous increase in prices on a monthly basis, we’re holding our own. The median price of a home last quarter (4Q 2015) was up by 0.3 percent.”

Ivey, who has worked in the Midland market for 10 years, said a balanced market should have 6-6.5 months of inventory. Currently, the Midland market has 3.5 months of inventory.

“A year ago, we had 2.4 months of inventory, so [sellers] were doing better then,” said Ivey. “Sellers are aware that we sold their properties within 17 days on the market last year. Now the average number of days on the market is 52. Our sellers aren’t panicking, but they’re asking what’s wrong?”

The significant decline in drilling activity in the Permian Basin plays a factor. The single family residential renting market in Midland has also been affected, noted Ivey.

“Prices have gone down and inventory has gone up,” he said.

Ivey believes this is due to many of the migratory workers – guys who were living in Midland and working on the drilling rigs.

“The people it took to operate those units were a migratory workforce. We saw a lot of them come in from places like El Paso, where the husband came and left the mother and children at home,” said Ivey. “When the overtime stopped and drilling activity slowed down, those workers probably went back home. They aren’t going to be re-leasing their homes.”

 

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Paying Less at the Pump

Courtesy of Rigzone – Rigzone interviews Michele Marano on lower gas prices and housing prices.

by Matthew V. Veazey DownstreamToday Staff

March 01, 2016

As this graph from the American Automobile Association (AAA) shows, the U.S. average price for a gallon of gasoline has fallen dramatically since the second half of 2014. As of February 8 of this year consumers were paying an average of $1.74 per gallon of gasoline, representing a 44-cent year-on-year decline, according to AAA. Barring any significant supply disruptions, AAA expects the low-price trend to continue for the near term.

A limited victory?

“Consumers are definitely the biggest winners when it comes to cheap gasoline,” said Alex Goldstein, founder and CEO of Chicago-based energy retailer Eligo Energy. “They are able to immediately see the difference of lower prices at the pump in their checkbooks and as a result will be more likely to use their savings in other areas of the economy.

Industries such as manufacturing, agriculture and transportation also benefit from low fuel prices, said David Holt, president of the Consumer Energy Alliance (CEA), which counts representatives of those sectors among its membership. “Reducing the cost of energy for those sectors of the economy helps their bottom line,” he said.

Noting that cheap fuel “absolutely” benefits the economy, Holt contends that two factors have nonetheless diminished its positive impact. First, a “convoluted, inconsistent” regulatory regime has made the U.S. energy market among the world’s least predictable, he said. “That unpredictability does trickle down” in the form of price complications in the energy market that affect other sectors of the economy, Holt explained.

In addition, Holt pointed out the U.S. economy has sunk into a recession or is on the verge of doing so. “What you’re seeing now is a downturn in commodity sectors,” he said, adding that consumer demand is not as robust as it could be. Two gauges of consumers’ attitudes about the economy – one from The Conference Board and another from the University of Michigan – underscore Holt’s concerns about demand.

“With reduced prices for consumers, theoretically every household gets, say, $2,000 more in their pockets every year,” Holt said. “You’d think that money’s getting spent, but with the high levels of unemployment and underemployment it’s not having the same economic effect as it has had in the past.”

Further stifling consumer demand is a faltering upstream oil and gas sector, which for much of the past decade has stood out by exhibiting robust growth, added Holt. “Now that oil and gas is in a downturn, that’s probably contributing to the lower benefit (of cheaper energy) to the broader economy,” he said.

“Low oil and gas prices do help consumers in the short term by reducing fuel and electricity bills and increasing the amount of disposable income,” added Uday Turaga, founder and CEO of Houston-based energy consulting firm ADI Analytics LLC. However, he pointed out that a prolonged low-price environment can hurt a number of major economic sectors.

“Sustained periods of low oil and gas prices would … significantly curtail capital spending by oil and gas companies and thereby business for other economic sectors such as steel, industrial equipment, engineering and construction services,” he said. For instance, he said these industries are feeling the effects of reduced activities in shale plays in states such as North Dakota, Pennsylvania and Texas.

Even refiners, who until recently reaped the benefits from cheap crude oil, are beginning to feel the pinch from low fuel prices. The inexpensive feedstock, coupled with solid demand, prompted refiners to process greater crude oil volumes. Increasing utilization demanded greater fuels storage, and inventories of

gasoline and distillates are now unusually high. According to the U.S. Department of Energy’s Energy

Information Administration (EIA), U.S. gasoline stocks are well above 5-year norms and distillate stocks are at the top of the range for the period. As Bloomberg recently reported, U.S. refiners have begun to scale back fuels production to cope with the glut. For European refiners, a similar trend is playing out. Reversing their recent trend of strong earnings, refiners are expected to see more modest profitability in 2016.

A trickling down upstream ‘survival mode’

“The first and most pronounced effect of falling gasoline prices is the impact to the upstream oil and gas industry employees,” said Will Speer, Houston-based senior petroleum analyst with GasBuddy.com. “Retail gasoline prices can’t fall this far without crude price falling significantly as well.”

Speer pointed out that motorists can eventually feel the pain of a prolonged low-price environment, too. Although widespread job cuts are a clear sign of the “survival mode” in which exploration and production companies find themselves, the firms are also shelving plans to launch expensive projects to find and exploit new sources of crude oil, he said.

“If enough of these projects are cancelled and if the world needs those extra barrels of crude in the future, the industry won’t be able to return the lost production quickly,” explained Speer. “It takes many years to develop a lot of these projects.”

“As the world stares at an oil oversupply situation and record low gasoline prices, investments moving away from the oil and gas industry could make it harder to keep up with demand in coming years,” continued Speer. “Higher world demand for oil with a less robust supply picture could spell higher gasoline prices down the road. Even if the typical motorist isn’t impacted by the oil industry’s reduction of headcount, the budgets and oil projects being slashed could impact you still in the end.”

Dan Kish, senior vice president with Washington, D.C.-based Institute for Energy Research, also expressed concerns about what a lack of upstream investment could ultimately mean for consumers. Moreover, he cautioned against the imposition of new regulatory burdens by government on the oil and gas industry at this precarious time.

“Low prices are great for consumers, but if oil prices stay low for a long time, companies will not invest in the fuels we need for tomorrow, and prices will skyrocket right back up,” Kish said. “This is true for any product…if the price becomes too low for the people who produce it, they will stop producing it until they can recover their costs. The worst thing to do right now is for the government to make it harder to produce energy here at home, or to raise taxes on energy, which makes it more expensive to produce products here at home.”

As Reuters recently reported, cheap gasoline prices – coupled with “relatively stable” corn prices – have put the renewable fuels sector at a disadvantage as well. In fact, Goldstein sees the status quo dealing a more crushing blow to renewables.

“While oil companies will see their bottom-line affected in the short-term, ultimately alternative energies

like ethanol will take the biggest hit from lower gasoline prices dragging their own prices down, meaning smaller profits and struggle for alternative suppliers,” he said.

Chris DiPaolo, Houston-based team manager with The Boston Consulting Group’s Energy Practice, sees ramifications in alternative energy besides just ethanol. “I don’t think it’s just conventional wisdom that low oil prices will slow the growth of renewables,” he said. “For each marginal consumer that chooses not to get an electric vehicle or is able to come out on the other side of the ‘should I install solar panels’ question, it takes that much longer for these alternatives to move up the curve.”

Ripple effects

Beyond the energy sphere, the effects of cheap fuel – particularly in regions heavily dependent on the oil and gas industry – weigh on construction, food service, real estate and other “supporting” industries, said DiPaolo.

“When you have this volatility, especially on the way down, it gives oil and oil service companies pause,” he explained. “When these companies start to slow down, the employees will slow down as well. Maybe they are less likely to build a new house, move into a more expensive neighborhood, go out to eat, have their car detailed, or hire someone to clean their house or mow their yard. This encompasses that ‘multiplier effect’ you see when positive or negative events filter through the economy.”

Houston real estate agent and former Wall Street energy commodity broker Michele Marano points out that saving money on fuel may help individuals to keep “small increments of cash” each month. However, she says that such modest savings typically do not inspire one to make a major lifestyle decision such as buying a house.

“Because (paying less for fuel) is viewed as somewhat temporary, most know that it will likely be accounted for in the near future with higher prices,” said Marano, the founder and CEO of Real Estate for the Energy Professional.

“The downside of cheap fuel is that although lower gasoline prices put more money in people’s pockets, it also means layoffs, especially in areas heavily impacted by oil – like Houston, which ultimately leads to a slump in housing demand,” she said. “In response to a slump in home sales, inventory levels grow and, over time, home values weaken.”

The Houston Association of Realtors (HAR) recently reported nearly 10-percent declines in both total property sales and total pending sales for the region from December 2014 to December 2015. “With oil dropping to levels around $30 a barrel, I think it’s fair to say that the Houston housing market is going to remain cooler for at least a little while,” HAR Chairman Mario Arraiga said in a Jan. 13, 2016, press release.

“Although cheap gasoline prices are good for the consumer, the longer-term effects can be bad for the economy,” concluded Marano. “All property, whether commercial or residential, is affected by lower gasoline prices … and this does have an impact on construction of new buildings, retail centers, office space, etc. The upside to this is that with lower property values, this can be viewed as an investment opportunity for those who are able to buy and build now, or buy and hold for a sale or construction at a later time.”
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Real Estate Love Match

REAL LOVE, REAL ESTATE: THINKING IN TERMS OF LOVE WHEN BUYING A HOME.

MICHELE COMPARES LOVE AND MATCHMAKING TO BUYING A HOME.  WHY WOULD YOU BUY A HOME YOU ARE NOT IN LOVE WITH?

Love Lesson 1:  Be Prepared to Make the Commitment.
Shopping for a home is like looking for a mate.  Until your ready to make the commitment, you’re probably not ready to settle down with a home.  Ask yourself first if you’re willing to take on the responsibility of owning up to being a good homeowner.

Love Lesson 2: Know What You’re Looking For.
Do you require the 5 star treatment? Have a good idea what attracts you to a property.  Look for characteristics that please you.  Draft a list of requirements that you desire so that when you’re ready to settle down, you are shopping the right criteria.

Love Lesson 3: Keep “Geographically Desirable” in Mind.
This element is extremely important because location determines how conveniently located your home is to your lifestyle.  Also, consider the value of the location vs. the price.  Look at the surroundings and ask yourself if there are possibilities of growth, improvements and changes that will either hurt or harm your value.

Love Lesson 4: High Maintenance May or May Not Work for You
First impressions are everything, however, look at the overall property and its good and bad points.  Consider the repairs and improvements that may be necessary and its associated costs before you move on.  Keep your list in mind.  You will need to know how to identify the qualities that please you, without being distracted by little things that don’t really matter.

Love Lesson 5: Your Property is a Reflection of You.
Your home should please you and make you happy.    In other words, it should say a lot about the person you are.  Everything you like in life is somewhere reflected in your home, whether it is style, color, or personal belongings.   Loving where you live is part of the romance of owning.

Love Lesson 6: Nurture it Extensively.
If you treat your home with care, chances are, you’ll have fewer problems in the future.  If something breaks, take care of it timely, rather than letting a maintenance issue become a bigger, costly repair.  Taking proper care and paying attention to maintenance will most likely bring you a favorable return in the long run.

Love Lesson 7: Investigate the Red Flags but Don’t Judge by a Bad First Impression.
Determine how much you are willing to put into it.  If it’s going to require a lot work, maybe it’s not for you.  Determine how extensive the repairs or improvements are before purchasing.  If it requires high dollar repairs or a complete overhaul, consider your checkbook and schedule.  It may work for you in the long term, but in the interim, your life may be a disaster.

Love Lesson 8: Considering Multiple Homes
If you’re buying a second (or third), decide if you really have the time, money and responsibility to put into it.   There is always the risk of owning more than one home and not being able to enjoy the purpose of having it.  A second home needs to be treated as good, if not better than the primary.

Love Lesson 9: Determine whether it is Long or Short Term
When considering a purchase, be realistic about how long you plan to hold the property. If you are planning to stay short term, you may not want to buy the highest priced home on the block.  Pay close attention to the location in which you are buying and be aware of the surroundings that could affect its value.  If you plan to hold the property for many years, consider the same factors; however, be sure it is a home you absolutely love, while making sure you can grow into it and not out of it.
Whether you are buying long or short term, identify the condition of the economy and the current real estate market.  This will have a lot to do with your negotiating power.

Love Lesson 10: Head Over Heals
The most rewarding part of owning is falling in love, day after day, when you walk  in to your home.  If you haven’t experienced that…..you’re probably not in love and may want to consider making some changes.