I’m glad to see that real estate experts are optimistic about the new year, but there are a couple of key questions left unanswered.
While uncertainty in the global economy could hinder the nation’s (and Houston’s) recovery, those who work in the real estate business here remain optimistic going into 2012. Several offered forecasts for the Chronicle. Here are edited excerpts of their comments.
Housing
Houston is going to see somewhere around a 5 percent increase in home sales and maybe as much 2 or 2.5 percent increase in median price. That’s still lower than the historical norm, but those are better numbers than the last two or three years. The economy is going to continue to be fairly strong. The thing that could hold us all back, and is holding us all back, is simply a mental attitude that we don’t see the light yet at the end of the tunnel that things are going to get better. There’s so much uncertainty about the economy, politics, Europe, China.
Jim Gaines, research economist, Real Estate Center at Texas A&M University
Housing permits
For the 12 months through November 2011, Houston has generated 21,300 permits, a 0.2 percent growth versus the same period a year ago. Although this is only a slight increase, the trend over the past several quarters is very positive. The numbers for December, January and February will show strong increases. Bohlke predicts that the annual 2011 number will be 21,500 permits. This momentum will carry forward into 2012 due to strong job growth and low interest rates. Bohlke projects a minimum of 5 percent growth in new-home permits for calendar year 2012 over calendar year 2011. This translates to nearly 22,600 permits.
Gary Latz, vice president, consulting services, Bohlke Consulting Group
The first question is whether they’re talking about the greater Houston metro area, or specifically the city of Houston. Obviously, being in a dynamic and growing region is a good thing regardless, but where that dynamism does matter, as the city recognizes. I sent an email to Nancy Sarnoff to ask this question, and she told me that they were speaking about the greater area. So, adjust your expectations accordingly.
One reason why I was curious about that fact is because of my second question, namely how does this affect projections of property tax revenues for the city and the county in the next fiscal year? The greater area includes Fort Bend, Montgomery, and Galveston Counties, so even spectacular projections don’t necessarily translate into better news for the bottom lines of our local governments. That question remains unanswered for now, though I daresay we’ll begin to get some budget numbers from both entities in the near future. Let’s hope for the best. Prime Property has more.