Help: Trying to decide if I should sell my townhome in Houston

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rci2145's picture
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Help: Trying to decide if I should sell my townhome in Houston

Houston is one of the few big cities that has not experienced falling prices from the housing crash so far.  Sales have slowed, but since there wasn't much of a bubble here, prices have not come down.  However, that could easily change as the crises deepens over the next few years.  I have owned my townhome for about 1 year.  It is located next to downtown in a fast growing area for young professionals.  I'm worried that if things get bad, the neighborhood could be overrun with crime causing people to move out, pushing prices down further. 

On the other hand, if Mr. Martenson's theory that the cost of oil and other engergy commodities are only going to rise in the future, I'm thinking that Houston could be a major boomtown.  Is it possible that Houston, with it's important shipping port and center of America's energy business could actually be the one city that emerges stronger over the next 10 years?  If crude oil costs $200 or $300 a barrell in two years, shouldn't Houston benefit in a huge way?  I currently have about $40k in equity in the home.  Don't know if I should cash it out to be safe or ride out the storm and potentially have a great townhome in a booming city.  What do y'all think?

JAG's picture
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Re: Help: Trying to decide if I should sell my townhome in ...

Glad to see someone else from Houston on the forum. I live south of Houston. I think Hurricane Ike opened Houstonian's eyes about how much we are dependent on the conveniences of modern society (electricity, clean water, etc). This experience may prove to be beneficial in the uncertain times ahead. I agree that Houston may benefit, in general, from the price of oil rising, but I think it will still be hard on individual citizens. I was in downtown yesterday, and I have to admit that I thought it looked a little desolated as compared to my last visit (but I could easily be fooling myself). As far as your question goes, I think you could make it work either way. If you stay, I would invest in your pantry and maybe a safe to hold some valuables. You might also consider some sort of non-lethal means of personal protection ( a tazor or something similar). I know this is "gun country" here, but if it really came down to it, would you want to kill someone when you could resolve the situation in a non-lethal manner? (Please don't take that as any sort of political statement, because I am strictly an apolitical person.) 

If you decide to sell, and rent, then you have the most freedom and flexibility to adapt to unforeseen future events. Additionally, you might be in a position to take advantage of opportunities that arise later. 

I don't think I was much help to you, but I wanted to reply anyways, to let you know that there is a like-minded individual living in your "neck of the woods".  

WhoKnew's picture
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Re: Help: Trying to decide if I should sell my townhome in ...

I'd make sure I had little or no equity in the place and be ready to move/walk away at the drop of a hat.

rci2145's picture
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Re: Help: Trying to decide if I should sell my townhome in ...

Thanks for the response jageanangel.  Yeah, I don't like the idea of keeping a gun.  A TASER might be better.  I also have a pit bull. 

I'm not sure what I want to do.  I'm really torn.  The problem is that it's so hard to pick up and move and of course real estate transaction fees are outrageous. 

Fogle's picture
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That is a tough question.

That is a tough question. Should I stay or should I

I feel that there are just too many variables
influencing such a decision to make a 100% rational decision.

We faced a similar dilemma last
summer. Our present house is nice, close to town, woody countryside,
good facilities. But the garden is too small for growing food or
raising goats. It is also too near big cities for my comfort. And
although it is 150 km of the coast, it is less than a few meters
above sea level. We could buy a bigger home for less money in another

It was impossible to work out all the possible
scenarios. So we went with our gut feeling.

This feeling told us to find a small village. Find a
nice home with enough land for producing food and raising some
animals. So we sold our house last month and are now looking at
beautiful, old farms to buy. In the end this might prove not be the
smartest move, but at the moment it feels right. 

I know your dilemma is different but the motivation sounds similar. So my advise would be to let you subconscious decide
and follow your instinct.

bruin36's picture
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Re: Help: Trying to decide if I should sell my townhome in ...

Dont wait - sell it, price it right ahead of the other buyers that still have not realized they are stuck.

I had a lot more to say about this but my posting was lost before i could post it.

I am in a similar situation with my townhouse in NYC - aledgedly the strongest real estate market in the country but I'm still here waiting for those buyers!!

good luck

gravenewworld's picture
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Re: Help: Trying to decide if I should sell my townhome in ...

I too face a similar dilemma, although I'm in Dallas.  Townhome with roughly 40k equity.  Before I bought the place in '04, I read Rubino's book about the coming real estate crash.  I bought the place anyway, although I wish I had followed all his advice and shorted Fannie and Freddie as a hedge.  

The logic for buying?  Texas markets were not experiencing the run-up like other markets.  I figured I could pick up a place with cheap money and rent it out at some point in the future and watch the other markets decline.  Where I made a wrong assumption was that I assumed other buyers nationwide were behaving at least semi-responsibly (ok, with just some hint of responsibility.)  They were not.  So the decline is now a full on crash (as a national average.)

Still in the townhome, and now faced with the choice.  At present, my choice (actually we... married and kid on the way since then lol) is to stay, pay down as much as possible, possibly refinance if rates go lower, and rent it out a few years from now.

This stragety however is highly dependent on one's individual situation and location.  My timeline is ultra long term.  And I could change my mind lol based on the Fed (i.e. the market.)

I'd love to hear counter arguments.  bruin36 has a valid point as well, but I'm thinking 20-30 years out, and NYC is not Dallas/Houston.  NYC = banking, Texas = 25% of the nation's oil reserves.

Best advice is to not listen to anyone.  Educate yourself as much as possible and plan based on your unique situation.  Real estate cannot be discussed in a generic sense online.

RikD's picture
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Re: Help: Trying to decide if I should sell my townhome in ...

I also live in Houston, however I have a house out west of the city.  Nice to see some other Houstonians out there. 

I have a few thoughts regarding the townhouse lifestyle in general.  If some of the things that Chris Martenson has suggested start coming to pass I am not sure what would be the best thing to do.  The biggest problem as I see it might be electricity.  Even though there might be lots of oil related business, there is no guarantee that the power companies would be able to deliver.  At this time most of the electricity is from coal fired plants, however there is fair amount of wind power coming online.  Keep in mind that Houston is growing at an incredible rate because more and more people are moving from all over the country and from other countries seeking employment and a better life. With a potential worthless currency, the energy companies may not be able to procure the coal or oil needed to run the plants at the demand that is being placed. 

Interestingly, Texas is offering very nice incentives for solar energy in addition to the new federal incentive that started on January 1, 2009.  It goes without saying that we get our share of sunshine here Houston (and just about everywhere in Texas for that matter).  The Texas incentive is that if you decide to do a solar project to the house, it will typically add quite a bit value to the property price (i.e. the value of your house goes up).  The Texas legislature realized this, and passed a law saying that the county appraisers cannot take this into consideration - thus keeping your (already way too high) property taxes status quo.  The federal incentive basically removed the $2000 cap on tax credits.  What this means is that if you do a solar energy project on your house, you can take a full 30% of the installation price as a tax credit - without any limits.

I think my point here is: you're just limited in your flexibility in a townhouse.  I also know the area your in, and agree that it could get pretty dicey to live there - especially if the City of Houston has to start turning off night lights someday in the not-too-distant future to save money.  You can find a reasonable house at a decent price in one of the burbs. You might look  either north or west considering the potential hurricane related issues.  You can always take the Metro into downtown using the park & ride system.  I use it every day to get into town and its nice. 

rci2145's picture
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Posts: 24
Re: Help: Trying to decide if I should sell my townhome in ...

Graveneworld, renting is an idea I'm also considering.  Currently, I have two roomates that actually pay the full cost of my mortgage.  I could rent the townhome out at a profit.  I figure that if housing busts around here, rents should actually go up.  I guess the main problem with that strategy is that if my area gets overrun with crime (since is located in an urban area), I won't be able to get high rents and could suffer a decrease in home value even over a long period of time.

 I actually lived in Dallas for 5 years and I think its an even more stable housing market than Houston.  Houston is too dependent on oil and its possible that if oil busts, Houston will go down with it.  However, if oil turns into the most precious commodity in the world, Houston could be the fastest growing city in the nation. 

I agree that the NYC analogy is totally different.  NYC is the financial capital of the world but is about to go through the toughest time in it's history, IMO.  The financial system is going to be nationalized within a year or two.  My sister has an apartment in upper east Manhattan that has lost $200 in the last year and she is now afraid to sell.  Half of her savings was in her company's stock which is now close to zero.  I am afraid for her but don't know how to warn her without sounding like a nut. 


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