Going by the latest information from the United States Bureau of Economic Analysis, the third most significant industry of the Lone Star state is real estate. This industry typically contributes about 7.8% – 12% of the GDP (Gross Domestic Product) of Texas.
Texas real estate industry goes across the boundaries of the state and affects the financial activity of other parts of the nation as well. The interrelated finance dealings form a complex web that reflects the scenario of the modern economy. So whatever happens in Texas influences the entire country, and to some extent, the world as a whole.
U.S. bureau report highlighted some facts:
- For every $1 million of revenue generates by the Texas real estate industry, about $0.5 million of revenue is earned in other parts of state economy.
- For every $1 million of revenue generated by Texas real estate industry, 5.16 jobs are generated in the real estate industry, and 5 jobs are generated in other industries in the state.
- Texas real estate industry has the largest proportion of self employed individuals
About 0.5 million people of the state work in the real estate industry, making it 3.9% of the statewide employment. Looks like it’s a good time to buy a home in Central Texas.
Pre-approval in Texas real estate market means a written commitment made by the lender to offer you a loan. It is subject to some conditions and an acceptable appraisal. It is based on a critical analysis of your economic conditions. If you want to buy property in Texas, having a letter of pre approval shows that you mean business. It appeals to the sellers and they value you more. So if you want to buy your dream house in Central Texas and you want to beat the competition, make sure you have a letter of pre approval. Having pre approval does not mean that it is mandatory for you to take a loan. Instead, it shows the sellers in Texas that you are capable to buy the house you’re interested in. Do not confuse it with the term pre qualification. While pre approval is reported by a lender, the pre qualification is self reported, and is far less weighted than pre approval. Though pre approval is important, it is not the only component of a real estate proposal. Other important components are contingency clauses and earnest money. Before you find your dream house, make sure you get a Texas Realtor and get to know more about the contract. This way, when you find the perfect house, you can make offer that the seller can’t resist.
A new bill introduced in the U.S. House last week intended to improve the process for approving short sales may significantly improve the process. The bill, introduced on April 12, 2011 was strongly supported by the National Association of Realtors®. It will implement a 45 day deadline on lenders to respond to short sale requests. For those of you who have already experienced it, whether you are on the buying or selling end of a short sale the process time can be painfully long sometimes. The NAR President, Ron Phipps, was quoted at saying “The current short sale process can be time-consuming and inefficient, and many would-be buyers end up walking away from a sale that could have saved a home owner from foreclosure,” … “Realtors® and consumers continue to raise issues about delays in the short sale process, because lenders are unable to decide whether to approve a short sale. After many months of delays, and with no response from lenders, potential buyers are losing patience and cancelling their contracts, often resulting in the property entering foreclosure. A short sale minimizes the negative impact on sellers and generally costs the lender less than a foreclosure,”. It is exciting to see the NAR really making a difference in Congress.
For everyone that bought a home in 2010, don’t forget to file for you Homestead Exemptions between January 1st-April 30th. Fill out a simple form at your county’s Appraisal District Office:
Guadalupe Co Appraisal Dist www.guadalupead.org
Comal Co Appraisal Dist www.comalad.org
Hays Co Appraisal Dist www.hayscad.com
A great mortgage lender that I’m friends with, Steve Brown, sent me this article. It explains why interest rates are no longer 3.75%, but are now up in the 4% range. . . NOT that 4.5% interest rate is bad, but we’ve come back up a little bit. Interest rates are amazing! If you are renting, and you have decent credit, you should really run the numbers on my mortgage caluculator and see what you could be buying instead of paying monthly rent. If you have money to invest, Seguin, San Marcos, and New Braunfels Real Estate is a great place to invest. With credit being tighter, many folks aren’t able to qualify for loans, so they are forced to rent. There is a large demand for rentals right now. Anyway, back to the article that Steve sent me:
Congress Passes Tax Deal
By Stefan Nevelof, Highlands Residential Mortgage Secondary Marketing
It was another tough week for mortgage rates. Tuesday’s Fed meeting contained no surprises, so investors focused on stronger than expected economic growth data and progress on the tax deal, which was passed late in the week. Once again, nearly all the news was unfavorable for mortgage rates, which ended the week higher.
Recent economic growth data has mostly exceeded expectations, causing several economists to raise their forecast for GDP in 2011. In particular, this week’s Retail Sales and manufacturing sector data surpassed the consensus estimates. Faster economic growth generally produces higher future inflation expectations, which leads to higher bond yields.
The tax deal has been negative for mortgage rates in three ways. First, it’s expected to boost economic growth. In addition, it will increase the budget deficit, which will lead to a larger supply of Treasury securities, pushing bond yields higher. Finally, this additional fiscal stimulus will make it less likely that the Fed will add more monetary stimulus. That said, the Fed is focused on unemployment that is far too high and inflation that is below its desired level. At this point, the Fed is in no rush to begin to tighten policy.
Flood Insurance Program Back in Business Until Sept. 30 July 1, 2010 The U.S. Senate last night approved a temporary reauthorization of the federal flood insurance program until Sept. 30. The reauthorization of the National Flood Insurance Program (NFIP) is retroactive to June 1, the date the program was halted. The unanimous Senate vote sent the measure to President Barack Obama for his signature. The House had previously approved reauthorization. Once President Obama signs the bill into law, the NFIP should return to normal operations, according to the Independent Insurance Agents & Brokers of America (the Big “I”). Also, since the extension is retroactive, any new policy applications or renewals that were signed and submitted during the hiatus will be effective from the date of application or, in the case of waiting periods, the waiting period will start from the date of application. http://www.insurancejournal.com/news/national/2010/07/01/111226.htm