There are several reasons why buying Houston pre foreclosure homes is a profitable endeavor.
One reason is the availability of mortgage loans offered at rates lower than in other markets. If home loans are available in a certain market, buying or reselling a property at a profit is more viable. According to Forbes magazine, while mortgage loans are not readily available in certain markets because of high rates of delinquency and foreclosure, Houston banks are more likely to write home loans at better terms because the percentage of foreclosures in Houston is much lower than in other metro areas.
Forbes also cited Dallas and Kansas City in Missouri as the other cities with lower mortgage rates and available home loans.
Another reason for considering lists of foreclosure homes in Houston is the record number of people who have moved to Houston over the past 10 years. According to the annual metro area population report released recently by the Census Bureau, Houston gained over 140,000 new residents, the highest number gained by any city in the U.S. The city tied with the Dallas metro area, which also gained the same number of new residents.
According to think tank Brookings Institute, Houston and other cities in Texas have been attracting out-of-state residents because of their diversified economies and controlled increases in home prices. People investing in Houston pre foreclosure homes would then have more prospects when it is time to resell properties.
Brookings analysts explained that Texas was the only Sunbelt state that did not decline in population growth because of its strong labor market. Other Sunbelt cities and states which traditionally attracted retirees lost population over the past several years. These include Las Vegas, Orlando, Phoenix, Raleigh and Atlanta.
The third reason is the resiliency of house prices in Houston. According to IHS Global Insight, Houston home prices did not experience the price collapse that occurred in many U.S. cities because house prices did not balloon to excessively high levels during the heydays of the housing market.
IHS analysts said that in the final quarter of 2005, the average price for homes in Houston was $110,100, lower by 20 percent than the national average. In December 2009, the average price rose to $127,400, instead of falling. It is this control in pricing that is making the Houston housing market resilient, giving investors in Houston pre foreclosure homes prospects for better returns than in other cities.