LUBBOCK, TX (KCBD) - Over the past two years, home values have plummeted to pre-2003 levels. With the help of some government incentives sales are increasing and nationwide inventory has returned to its lowest level since 1982.
Those in Lubbock were lucky as the housing market remained fairly stable, but with it being one of the single biggest purchases you'll ever make - homeowners want comfort in knowing they're not upside down on that investment.
Housing markets are regional and vary greatly from one another, but according to MSN there are still some indicators that you can rely on to see if your home values are about to rise.
1. The Unemployment Rate
This one's quite simple: Without a job, you can't buy a home. That drives prices down. Lubbock's economy took a hit in 2009, but it was minor compared the rest of the nation.
Lubbock National Bank's most recently released economic index shows the Hub City lost only 1,000 jobs last year and holds the second lowest unemployment rate in the state at 5.4 percent. "We ended the year 6% from where we were in 2008. The good news is in the 4th quarter we started to see signs of the local economy coming back," James Arnold with Lubbock National Bank said.
2. Rising Incomes
More money means homeowners can stay on top of repairs, and as a result, maintain their home's value and even the value of neighboring homes.
The president of the Lubbock Association of Realtors, Ann Kearney, says it can also help sell the house. "Manicure the front yard, getting the curb appeal as best as it can be and then also get in there and de-clutter," she said.
3. Fewer Foreclosure Filings and Sales
On average, foreclosed houses sell for 30% less than similar homes in the same area. "If you've got 10 foreclosures sitting around you then it's going to hurt you very, very bad," Kearney said.
As foreclosures increase, they drag down the average price of homes in a neighborhood, "In Lubbock the foreclosure market is just not there. I mean there are some foreclosures, don't get me wrong, but there's not a whole lot of foreclosures in Lubbock," Kearney added.
4. Inventories are Declining
When there are less "for sale" signs, sellers have more leverage. In Lubbock there are currently less than 1,200 homes listed through a realtor. Last year at this time more than 1,400 houses were on the market.
5. The List-to-Sales Price Ratio is Shrinking
This is the difference between the listing price and the actual sale price. A smaller margin suggests the real estate market is improving. "(You) can't test the market right now. Price the house right. If you price the house right you're going to get it sold, but if you over price a house, it's going to sit there."
6. Home Prices are Falling
This might seem counterintuitive, but there is a bright side - decreasing sales prices could mean the housing market has hit bottom.
It also guarantees the buyer gets into a market at a fraction of the price that buyers paid during the bubble. "Lubbock has been very, very fortunate to not be in that bubble. We don't hit highs, and we don't hit real, real big lows. You know, my favorite saying is: 'Thank goodness we live in Texas, and thank goodness we live in Lubbock, Texas.'"
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