Future Property Values in Sugar Land (Houston, Friendswood: 2015, rent, house)

[Htown2013]

Thank you all for advice. I am still undecided on this, but I have been looking at the numbers.

While I normally would sell, the combination of our strong housing market and low interest rates that our poised to rise are making me consider becoming a landlord.

Looking at the numbers for my specific situation, assuming interest rates are unchanged (4.5% for 30 yr and 3.5% for 15 yr), I could tolerate a further 15% increase in housing prices over 4 years.

If rates increase to 5%, I can only tolerate a 9% increase from current housing values.

If rates increase to 5.5%, I can only tolerate an increase of 3% from current housing values.

If rates were to increase to 6.5%, I would need housing prices to drop 7% from current values.

If rates were to increase to 6.5% and housing prices were to increase by 20% from today's prices, my PI would be double what it is today and price us out of the area.

After running the numbers, I realize the impact of interest rates on home affordability is huge.

What I ultimately decide to do will depend on local market conditions and mortgage interest rates 4 years from now, but I am strongly leaning towards renting. We need to use logical reasoning to predict the probability of future conditions.

[Htown2013]

I've gotten several private messages saying that Telfair is just a newish suburban neighborhood and will be old and much less desirable in 10 years, is a poor investment, and the neighborhood will go downhill. Anyone care to elaborate? I'm not seeing this decline with New Territory or First Colony, both of which are more than 10 years older than Telfair.

[bayoubengal1982]

Originally Posted by Htown2013

I've gotten several private messages saying that Telfair is just a newish suburban neighborhood and will be old and much less desirable in 10 years, is a poor investment, and the neighborhood will go downhill. Anyone care to elaborate? I'm not seeing this decline with New Territory or First Colony, both of which are more than 10 years older than Telfair.

Telfair go downhill?....yeah right. It is located in a prime area with access to major hwys/freeways with homes with a median price of around $500K. yeah okay

[NTexas2010]

Originally Posted by bayoubengal1982

Telfair go downhill?....yeah right. It is located in a prime area with access to major hwys/freeways with homes with a median price of around $500K. yeah okay

Yea I think someone is trolling you for the lulz. Telfair and the city of Sugar Land aren't going anywhere anytime soon, otherwise Greatwood and New Territory would have fallen flat on their faces circa 1999. No such thing happened.

[Topaz]

My parents were owners and landlords of 15 rental properties. I think many people greatly underestimate how much work and stress can be involved with doing this. Sure, being a landlord is great for people with the right skills and temperament (and cash reserves for emergencies), but it certainly isn't for everyone.

[AK123]

Originally Posted by Htown2013

I've gotten several private messages saying that Telfair is just a newish suburban neighborhood and will be old and much less desirable in 10 years, is a poor investment, and the neighborhood will go downhill. Anyone care to elaborate? I'm not seeing this decline with New Territory or First Colony, both of which are more than 10 years older than Telfair.

Someone's trolling you.

Have you seen First Colony go downhill? It's only gone up. And it's located only slightly better than Telfair as far as access and convenience.

I think some people in other areas are freaked out that Sugar Land has fewer Caucasians than many other suburbs. But that's because it has a huge number of Asians and Indians. What they apparently fail to realize is that this makes the schools better and more competitive, if anything. Home values and demand follow (up). The evidence is everywhere.

[AliefPropOwner]

Originally Posted by Schumacher713

Energy price crash? There will be no energy price crash. Oil prices will never crash to low levels like it once did. Live where you want to live not where you think houses will crash in value. Sugar Land is one of the nicest suburbs. If you wan to buy a home that is an investment then buy in the city.

Say what?

[Htown2013]

Originally Posted by AliefPropOwner

Say what?

Sugar Land is still one of the nicest suburbs and much more diversified employment wise than Katy or West Memorial.

I see 77079 house prices dropping, new construction prices dropping, and apartment rents dropping, before prime Sugar Land resale prices drop. Now what will be affected is that houses will stay on the market longer - no more of the multuple offers above list the day it hits the market. That type of market is never sustainable long term.

[ToyYot]

Originally Posted by Htown2013

Sugar Land is still one of the nicest suburbs and much more diversified employment wise than Katy or West Memorial.

I see 77079 house prices dropping, new construction prices dropping, and apartment rents dropping, before prime Sugar Land resale prices drop. Now what will be affected is that houses will stay on the market longer - no more of the multuple offers above list the day it hits the market. That type of market is never sustainable long term.

This makes no sense to me, comparing 77079 to new construction and the suburbs? It may be the energy corridor but here and in adjacent Westchase its mostly newer class A office space and A LOT of it. In a downturn this will cannibalize older Galleria and inner loop office space. Not sure how much Class A office space is in Sugar land, but I doubt it's at par.

[Htown2013]

Originally Posted by ToyYot

This makes no sense to me, comparing 77079 to new construction and the suburbs? It may be the energy corridor but here and in adjacent Westchase its mostly newer class A office space and A LOT of it. In a downturn this will cannibalize older Galleria and inner loop office space. Not sure how much Class A office space is in Sugar land, but I doubt it's at par.

77079 is still desirable and still good long term investment if you like the area, but that specific zip code was bid up much higher % wise than pretty much any other place in the city, including desirable inner loop areas, primarily due to Oil & Gas relos into the area.