Prospective home buyers are asking if "now" is the time to buy a house in Houston?

The residential real estate adviser's answer: "Absolutely!"

It may be questioned how such a recommendation can be made not knowing when the Houston housing market will "hit bottom."

However, for the individual who can qualify and afford to buy a home in the Houston area and plans on living in it for a couple of years, now is the time to buy.

Claims about problems in the Houston housing market have been greatly exaggerated. For nearly a year there have been media reports that the housing market is the worst since the mid-1980s, that there are rising foreclosures, about how credit has tightened, how adjustable rate mortgages are resetting, which will cause foreclosures to persist and how there are record inventories of new homes on the market. While much of this is true in many markets, most of this has not, nor should it to any large degree, adversely affect Houston.

According to Metrostudy's housing research, Houston has averaged about 1,000 foreclosures a month for the past year, and this has remained fairly steady. These 12,000+/- annual foreclosures are a drop in the bucket, given that there are slightly more than 2 million homes in the greater Houston area.

Houston home buyers are also not immune to the tightening of the credit markets. Tighter credit markets are a good thing in that it is a return to more "normal" lending practices. A return to sound lending practices is better for the overall health of Houston's real estate market.

The other concerns mentioned are not occurring and thus should not negatively affect the Houston housing market.

Houston has the great fortune of being somewhat insulated from many of the national housing maladies. Although Houston is tied more closely than ever to the national economy, it is still one of the world's leading energy centers, driven by the oil and gas industry. With oil priced above $75 and occasionally approaching $100 per barrel, jobs will continue to grow at a rate greater than in the rest of the nation. In 2007 the Houston economy created approximately 70,000 jobs. This is a decrease from the 100,000-plus jobs created in 2006, but it still puts Houston in the top two or three for job creation in the nation.

Economic forecasters project the Houston economy to add between 50,000 and 60,000 jobs in both 2008 and 2009. These new jobs bring new home buyers to the Houston market.

Unlike many other cities, Houston does not have an oversupply of new homes on the market. Metrostudy, with offices in 28 major cities, currently shows roughly a 2.5-month supply of new homes on the market versus a 2.2-month supply of new homes on the market for the same time in 2006. Both numbers are below "equilibrium" for the Houston area.

Another important statistic shows new home sales for the past 12 months have be greater (45,000) than new home starts for the same time frame (41,250). In other words, the Houston new home housing market is not "overbuilt," nor does it appear headed in that direction.

This suggests better news for Houston in the future because the national and local home builders have anticipated a slowdown and have cut back on the number of "spec" homes. Fewer spec homes greatly decreases the chance of overbuilding.

Housing affordability in Houston is great, far below the revised national figures. The latest local and national housing figures as supplied by the Houston Association of Realtors show the median home price for the nation is $220,200. The median home price is that point in which half the homes sold for more and the other half sold for less. Houston's most recent median home price was $153,630, considerably below the national median price.

In fact, Metrostudy has tracked the Houston median home price and their data shows home prices have increased on average 5.5 percent over the past 10 years, and in 2007 the average median home price in Houston increased about 5.7 percent. It has been very well chronicled that the rapid price increases, which sometimes approached 25 percent +/- on an annual basis from 2002 to 2005 for many cities, fueled investor activity in purchasing new homes. Houston's lower appreciation does not attract this investor activity and is a major piece of a stable housing market, which greatly decreases the odds of a major price correction.

Another reason for buying a home now is what has been referred to as the "affordability factor." A comparison of the cost of renting versus the cost of buying a home in several major cities shows that Houston has an excellent affordability rating when the cost of renting versus owning a home as well as the future employment growth are taken into consideration.

Houston's "affordability index" is one of the best in the nation, and the housing market is considered one of the "most secure." Data suggests that, under such a scenario, with all things being equal, it is better to buy a home than to rent one.

All of this data needs to be taken into context, because every neighborhood in Houston needs to be researched thoroughly.

Contrary to what may have been reported in some of the media, the Houston housing market is affordable and, in general, is not over-valued. Houston homes have not experienced the high appreciation rate of other markets, and with outstanding job growth, Houston is not experiencing the housing slump of other cities.

So when a prospective buyer asks, "Is now the right time to buy a house in Houston?" his adviser can answer with facts to back up the claim -- "Absolutely!"

Kirk Laguarta is senior land adviser with the Land Advisors Organization
(www.landadvisors.com).