Texas Medical Center Townhome Market

[LearningtobeTexan]

Greetings fellow Texans,

I just moved to Houston a few months ago for a new job, and I've already decided that this will be my home for a long time. For that reason, plus housing being more affordable than many places in this country, I want to buy a townhome/condo here. Since I work in downtown, I want to live within the inner loop. My budget is going to be about $130K or less, with a 10% down payment.

People have been telling me that I will not find anything in the inner loop for that price, but I found plenty of townhomes and condos selling for less than that on HAR.com.... particularly in the Medical Center area. I found that the Heights, Rice Military, River Oaks, and West University areas to be a wee bit too expensive for my budget, but not the Medical Center.

I really would like to buy now, but my apartment lease won't be up until end of January 2009. And if I terminate my lease early, the penalty is extremely heavy (4 months worth of rent). No subletting is allowed.

So I'll need to wait another 6 months before buying. I'm wondering how the market in the Medical Center is? Is it a buyers market or a sellers market? Why are the townhomes much cheaper in that area compared with other parts of the inner loop? Will the availability/inventory of townhomes under $130K increase or decrease 6 months from now? Is 6 months enough time to wait, or is it better to buy sooner than that (despite the penalty that I'll have to pay for terminating my current lease early)?

Thanks in advance!

[sunsets]

My impression of the Med Center area is that it is fairly unique in terms of townhouse/condo pricing. People buy an approx. 100K townhouse, live in it for a few years, then sell it for about the same amount they paid for it. Why? Becuase the mortgage payments are as cheap or cheaper than rent. Most people living in those are students/postdocs/residents who are only living here for a few years as they complete their training. Thus, turnover is really high. So they're not buying as an investment, rather, it's a short term living arrangement.

I would think that waiting another 6 months won't make a difference - but you probably won't see any appreciation in the property. If you're planning on being here for a while, you might do better to save up more, then go for a townhouse on the east side of downtown or somewhere up and coming like that.

[TheNiche]

My impression of the Med Center area is that it is fairly unique in terms of townhouse/condo pricing. People buy an approx. 100K townhouse, live in it for a few years, then sell it for about the same amount they paid for it. Why? Becuase the mortgage payments are as cheap or cheaper than rent. Most people living in those are students/postdocs/residents who are only living here for a few years as they complete their training. Thus, turnover is really high. So they're not buying as an investment, rather, it's a short term living arrangement.

I would think that waiting another 6 months won't make a difference - but you probably won't see any appreciation in the property. If you're planning on being here for a while, you might do better to save up more, then go for a townhouse on the east side of downtown or somewhere up and coming like that.

I own a condo in the Medical Center area and sunsets is right about the dynamics and demographics. In fact, there is no neighborhood with so many low-earning highly-educated people anywhere in Houston. But it also seems like there are a fair number of middle-aged people moving in more recently, and prices where I own have increased since I bought there. Due to renovations, maintenance fees, property taxes, and Realtor and closing costs, I probably won't make a great deal of money, but it will definitely have been preferable to renting considering how long I've owned.

I also concur with sunsets that renting for a while and saving up for something a little nicer and with a better location is probably a good idea for somebody that is in it for the long haul. I also like the suggestion about where might be a good place to look. East Downtown is going to be a great neighborhood in a few years once it gets infiltrated by more retailers.