Even Sorrier Than We Thought
The Austin American Statesman reports from Texas. “The recession that wiped out thousands of jobs in Central Texas also erased $6.5 billion from the market value of Travis County properties. The 5.3 percent drop in values from 2009 was the first decline since 2003, according to preliminary figures from the Travis Central Appraisal District. Meanwhile, the commercial market suffered more, with rising office vacancies and foreclosures or bankruptcies for some large properties. Chief Appraiser Patrick Brown estimated the total market value of the property in the county at $116.9 billion , down from $123.4 billion last year. The last decline was 5.3 percent in 2003 , reflecting the tech bust. That year, the county’s market value dropped by $4 billion, to $71.9 billion. ”
“The drop does not necessarily mean lower tax bills for all homeowners. The law requires that assessed values continue to rise until they eventually catch up to market values. ‘Many people have been getting assessed values below market for three or four years,’ Brown said. In those instances, ‘many homeowners will see an increase in assessed values, even though market values aren’t climbing.’”
News 8 Austin. “Dean Rindy said every time he leaves his house near Enfield Road, he does his best to ignore what to him looks like a giant chicken coop. The property, dubbed the ‘Pleiades’ by its original developers, is owned by First State Bank. ‘A bunch of incompetent people put together a bad project, and the bank very foolishly gave them the money to go ahead and make idiots of themselves,’ Rindy said.”
“If a buyer is never found for the complex, and the bank decides not to build, the structure can remain in its place as long as it stays up to code. ‘It’s a blight on the old West Austin neighborhood. It has been in a state of ruin, and they ran out of money years ago,’ nearby resident Angela Lee said.”
The Star Telegram. “In the first three months of the year, builders started 3,460 houses in North Texas, a 59 percent increase from the same period in 2009, when 2,172 houses were started, Metrostudy said. Metrostudy noted that the gain comes against a historic low a year earlier, when credit markets were tight. ‘The dramatic percentage increase in starts during the first quarter has more to do with the extremely low level of starts last year than anything else,’ said David Brown, director of Metrostudy’s Dallas-Fort Worth offices.”
“For example, in the first quarter of 2008, builders started 5,207 homes; in 2006, at the height of the housing boom, the number was 12,370. After the long decline in starts, inventory stands at around 8,390 new houses — among the lowest levels since 1993 and 68 percent below the peak in 2006, Brown said.”
“For all of 2009, area builders started 12,814 houses, down 30 percent from 2008’s 18,334 starts, figures show. Closings were also down, falling 32 percent from 24,025 in 2008 to 16,322 in 2009, Metrostudy said. Home builders have a 61/2-month supply of new houses and a five-year supply of lots, figures show.”
The Dallas Morning News. “North Texas’ jump in building this year was largely prompted by a shortage of finished houses for builders to sell. A federal tax credit, which is bringing out buyers, added to the increased building. Only about 3,500 completed new homes were vacant at the end of March, down from almost 11,000 at the start of 2007.”
“New home sales in North Texas are still declining – down more than 20 percent from first quarter 2009. Only 2,983 new homes were sold in the most recent quarter, less than half the volume in mid-2008.”
“Economists are keeping a close eye on the home market, which showed sales strength in late 2009 but grew slower early this year. ‘The tax credit should help, but so far the numbers are lagging,’ said Dr. James Gaines, an economist at the Real Estate Center at Texas A&M University. ‘We’d better see some significant sales closings in April and May or we will have to conclude that the housing sector was even sorrier than we thought.’”
From WFAA. “If you build it, they will come. Or will they? Some Texas school districts can’t afford to open brand-new campuses because the souring economy has caused cash flow problems. In Crowley, workers are racing to finish a middle school building that was designed to serve 1,200 students. For now, it will largely sit empty. The money was there to build the $40 million facility, but there’s not enough not to fully open it.”
“For years, this suburban Fort Worth district saw huge growth. But after the housing collapse, new students slowed to a trickle, and sinking property values slammed tax collections. The situation infuriates parents Like Lidia Hernandez, with kids in over-crowded schools. ‘Big waste of money for them to sit empty over there,’ she said.”
“‘Sounds like somebody didn’t do some planning,’ added Carolyn Goode, whose grandchild attends Crowley schools.”
The Monitor. “With little trust in authorities and few reports from the media, it is difficult for Mexican residents to discern what is fact from hearsay. But to be caught in the crossfire is a legitimate fear, families say — even more distressing is constantly seeing their schools shut down, their news outlets silenced and their streets blockaded by Mexican soldiers and military trucks. Such concerns are driving Matamoros families away from the border city and into the Rio Grande Valley, said residential and commercial real estate agents.”
“‘They call and tell me, ‘I need (a home) fast. I want to take my children out of school. There is too much danger here,’ said Sandy Lee Galvan, a real estate agent in Brownsville. ‘Many want to pay cash up front.’”
“Real estate agents in the Valley said Mexican nationals moving in are helping to keep the housing market afloat. Richards, for instance, estimated Mexican nationals comprise 40-50 percent of Trendsetters’ clientele in Hidalgo County. Many families also are ‘realizing it is a great time to make investments in the United States,’said Norma Rasco, a real estate agent with Rancho Viejo Realty. ‘Mexican nationals are cash buyers, and in this economy, cash is king,’ she said.”
The Houston Chronicle. “Neighborhoods across the area saw wild price swings depending on their location, school district and volume of foreclosures. Volatility seemed to be the only constant. While many consumers were reluctant to dip their toes in the market’s murky waters, others got a nudge from the federal government, whose programs to alleviate the nation’s economic troubles focused largely on housing.”
“‘There have been so many efforts to stimulate demand and close off foreclosures that it’s hard to say what it would have looked like if it were under normal circumstances,’ said Crawford Realty Advisors’ Evert Crawford, who conducted the analysis.”
“Values in more than 120 of the area’s largest neighborhoods — those with at least 1,000 homes — declined or were flat last year, while about 80 registered increases. Values in more than half of the neighborhoods surveyed turned down — some by as much as 50 percent. But there were also parts of town that came out ahead.”
“‘I’ve built for 15 years and never seen Houston like this,’ said Adam Kliebert, a high-end builder who has been unable to sell his last two spec homes — houses he built in anticipation of finding buyers.”
“Kliebert has decided to take a break from building homes, and is converting the Rice Village-area building where he runs his real estate business into an upscale lounge. He’ll start building again when demand returns.”
“Foreclosures accounted for 20.5 percent of home sales last year in five Houston-area counties, according to a survey of 2009 housing prices conducted by Crawford Realty Advisors in conjunction with the University of Houston’s Institute for Regional Forecasting. The median price was $87,000. That’s compared with 21.9 percent in 2008 at a median price of $90,905.”
“The downward pressure from foreclosures is most obvious in expanding or newer subdivisions outside the Beltway, but is also evident in neighborhoods inside the Beltway. Many foreclosures last year were concentrated in lower-income areas with higher unemployment rates, according to a study that Evert Crawford, president of Crawford Realty Advisors, is working on but has yet to be released, he said. ‘It looks like to me what we’re seeing in foreclosures is bad lending practices to people who should never have gotten the loans in the first place,’ he said.”
“Federal mitigation programs and moratoriums delayed foreclosures temporarily during the first half of 2009, but the second half of the year saw them jump again.”
“Competition from cheap foreclosures can make it tough for homeowners trying to sell, too. Stacia Jackson, a passport specialist with the Department of State, has been trying to sell her northwest Houston home since last summer, when she listed it for $104,000. She came close to a sale once, but a nearby foreclosure lured the potential buyers away with a $92,000 listing price.”
“‘The house across the street was lower, so they bought that one instead,’ she said. Now Jackson has lowered her asking price to $99,000 and switched real estate agents.”
“Though foreclosures numbers may seem to steady, it may be premature to say the worst is over, said Michael Weaster, an agent who specializes in selling foreclosures for banks. Some banks, he said, are holding on to properties and renting them out until the market turns around. And others have many vacant properties on the books that homeowners walked away from but the bank hasn’t foreclosed on yet, he said.”
“Weaster, who often gives banks an opinion about property values, says he finds that about half the 25 homes he checks on per week are usually vacant because the homeowners could no longer afford their mortgages. ‘There is still a huge inventory waiting to be foreclosed,’ he said. ‘Everyone says the economy is stabilizing, but that’s not what I see.’”
“”While the number of foreclosures for the year seem to finally be leveling off as fallout from the subprime mortgage crisis starts to clear, the numbers are still very high, said Ralph Murdock of Foreclosure Information & Listing Service. ‘We’re really cleaning out the backlog, number one,’ he said. ‘But everything has been aggravated with the recession. Unemployment is the reason our numbers continue to go up.’”
The Midland Reporter Telegram. “It’s often difficult to measure the state of the economy because many times we judge the good times and bad times through the eyes of our own reality. You could say the state of the economy comes through the eyes of the beholder. Our current economic state proves this point very well. During the recession, nearly everyone felt the pain of the times even though Midland entered the pain threshold much later than the rest of the nation. Regardless, most of us were hit hard by the stiff downturn in the nation’s financial structure.”
“Many of us suffered no loss of jobs and suffered no loss of income during the recession. And our investments are rebounding once again thanks to the year-long stock market rally. On the other hand, the mood remains bleak for many of the nearly 9 million people who lost jobs and still don’t see the ‘hiring’ signs in many windows. Many have seen pay cuts and housing problems produced by a mammoth housing bust.”
“What we would like to see is where both of these worlds meld into an economic state that once again is a boost to the American dream. It’s simply not good enough for a few to reap the rewards this nation has to offer. We will have work to do as long as the American dream is not reachable for all those willing to work for it.”
“It’s our opinion that we have taken our eye off the ball and have stowed away the troubles of millions of Americans to see to other less worthy tasks. It’s time to once again to return our attention to the economy, creating an environment of success without throwing empty dollars at empty programs.”
“It’s time to make policies that will allow businesses to create jobs, enable the housing market to advance and ensure that banks are once again loaning money. Then we might really be on the road to economic recovery.”
