The Downward Pressure In Texas
The Dallas Morning News reports from Texas. “North Texas home sales were 20 percent lower in April than a year earlier, when buyers were rushing to take advantage of expiring tax credits. April’s sharp decline was the 11th consecutive month in which pre-owned home sales in the area were down from the previous year. At the end of April, 37,653 pre-owned homes were listed for sale in North Texas, 2 percent more than a year ago. It took on average 89 days to sell a house, up 20 percent from a year ago.”
“Condominium and townhouse sales were hit even harder in April. Purchases were down 28 percent and prices fell 5 percent. The number of pending sales for condos and single-family homes are down significantly, suggesting that May’s pre-owned sales will also show a substantial decline.”
“‘I keep hearing from agents that they are busy, all-cash sales are becoming more prevalent and that qualified buyers are not having that much trouble getting financing, so we expect the market to keep trying to improve,’ said James Gaines, an economist at the Real Estate Center at Texas A&M University. ‘May should be the bottom month, but I’m not real comfortable about June — we’ll keep our fingers crossed.’”
“Home foreclosure rates in the Dallas area inched higher in February from a year ago. In February, 1.55 percent of Dallas-area homes were in foreclosure, researchers at CoreLogic said Thursday. That’s up from 1.47 percent a year earlier. An additional 5.24 percent of Dallas-area homeowners with loans were 90 days or more behind in their payments. Borrowers delinquent this long are considered most likely to let their houses go into foreclosure.”
“In another report Thursday, California housing analyst Clear Capital said that in the first quarter, 32.7 percent of homes for sale in the Dallas-Fort Worth area were previously foreclosed. Still, that’s much less than in markets such as Las Vegas, 53.7 percent; Orlando, Fla., 49.9 percent; and Phoenix, 47 percent. And it’s below the 37.8 percent rate of foreclosed houses for sale in the Houston area.”
The Abilene Reporter News. “Taylor County foreclosures were up 25 percent through the first three months of the year — mainly because of dozens of residential lot foreclosures near a Merkel golf course — but so far have yet to have a significant effect on local home values, said Richard Petree, chief appraiser for the Taylor County Central Appraisal District.”
“Pam Yungblut, a real estate agent with Senter, Realtors, said 26 lender-owned properties have been sold so far this year among properties listed in the Abilene MLS, with another 14 such sales pending. For the Abilene area, ‘that’s a pretty big pending number of REOs,’ said Yungblut, referring to ‘real estate owned’ property, a term used to describe property owned by a lender.”
“Real estate veteran, Bill Sumner Jr., with Rosanna’s Realty, noted that sales from the Abilene MLS don’t include every foreclosure sale. ‘There are some that are, but there are many that are not,’ he said, explaining that some banks will auction a property rather than list it with a real estate agent. ‘I know it’s going to recover and it’s going to get better,’ Sumner said. ‘I just have a feeling it’s going to get a little worse before it gets better.’”
The Lubbock Avalanche-Journal. “The Lubbock Economic Index slipped 1.5 percent from March 2010 on substantial declines in the construction and housing market, according to data released Wednesday. ‘The downward pressure on the index is from construction activity and home sales,’ said James Arnold, executive VP of Lubbock National Bank, which sponsors the monthly report.”
“Construction permit values for Lubbock in March totalled $19.7 million, compared with nearly $42.2 million a year earlier. For the first quarter of 2011, total construction activity is off 47.9 percent, with permit values totalling $61.3 million this year against nearly $117.7 million a year ago. New home permits were off nearly 40 percent from a year ago, while existing home sales were down by about a third for the quarter.”
“‘We’re not creating jobs,’ Arnold said of the local non-governmental economy. ‘We have the fourth-lowest unemployment rate in the state, but our 6 percent (jobless rate) is a 20-year high. And we’re 21st in the state in job creation.’”
The Hays Free Press. “In a glum real estate market dragged down by foreclosures and short sales, it should come as little surprise that Hays County’s preliminary 2011 property appraisals saw negligible gains this year. But for those hoping to profit or break even on the sale of their property, the sluggish appraisals may be cause for concern. ‘It’s a pretty dull market,’ said Hays County Chief Appraiser David Valle. ‘There were years where we were adding a billion dollars to the appraisal roles. At least it’s still on the plus side.’”
“The average home value in Hays County increased by $977 to $163,701 in 2011, representing a gain of less than one percent. At the height of the housing market in 2008, the average home value peaked at $174,340, an 8.75 percent increase from the year prior. But following the nationwide housing crash, 2009 and 2010 saw significant declines in appraised home values.”
“‘You’re seeing a great number of foreclosures in the Kyle-Buda and Hays CISD area,’ Valle said. ‘It’s making those markets a little tough.’ Local realtor David Aston said that the marginal increases seemed to be in line with market values. ‘There’s been a lot of foreclosures and short sales and prices have actually declined,’ Aston said.”
“Aston estimated that foreclosures make up about 30 percent of the market in the Buda-Kyle area, driving down selling prices among competing properties. ‘That’s definitely what’s keeping the values down,’ Aston said. ‘They are selling in some cases at lower than market value.’”
The Express News. “San Antonio home builders continue to trudge through the long, dry real estate downturn. Home building declined 24 percent in the first quarter of the year compared with the same time period in 2010, with builders starting just 1,461 homes in the San Antonio market. ‘It’s a struggle for everybody in the industry,’ said Jack Inselmann, VP of the U.S. Central Division of housing research company Metrostudy. ‘Ever since the tax credit ended, the market has fallen into a malaise.’”
“The supply of developed lots ready for home building continues to decline — down by more than 7,200 in the past two years — with lot shortages starting in the most popular neighborhoods. There are 20,159 vacant lots in the market, which sounds like a lot, but builders likely will start about 8,000 homes this year.”
“Developer Norman Dugas said that by early next year, the lack of available lots actually could constrain the market, making it impossible for builders to keep up with buyer demand. ‘I get at least one call a month from an out-of-town builder looking at San Antonio asking about lot availability,’ Dugas said. ‘I tell them there are no (production) lots available.’”
From Austin Talks. “Distressed properties. Bidding wars. REOs, BPOs, 203(k)s. When it comes to buying a short sale or foreclosed home, the lingo alone can be enough to make a person’s head spin. On Saturday, Bethel New Life will host a free seminar. The workshop, which will include a tour of several foreclosed homes and advice from a bank lender, realtor and federal housing administration consultant, is designed to teach people the basics in a hot new area of real estate: distressed properties.”
“‘We realized this was an issue in our neighborhood, and this was the main way a lot of individuals are going to be able to purchase homes,’ said Allison Schuler, a Bethel New Life housing counselor. ‘There’s a growing number of foreclosures in the neighborhood . . . Austin and West Garfield Park have been hit incredibly hard.’”
“Bethel New Life’s Schuler, who has worked as a mortgage counselor for people losing their homes before she began helping those buying them, said if people do have to lose their homes, buying short sales and foreclosed properties are a great way to revitalize the community. ‘It helps our neighborhood,’ Schuler said. ‘There are so many abandoned properties.’”
The American Statesman. “A failed downtown-area condominium project could be revived as apartments. Crescent Resources is evaluating whether to revive its former Aquaterra condominium project at 210 Barton Springs Road, as apartments, albeit under a different name, said Scott Makee, regional director for Texas and Tennessee for Crescent. Makee said Friday that it was too early to speculate about the future of the site but noted, ‘Crescent is excited about the Austin multifamily market, which is experiencing rising rents, limited supply and shrinking vacancies.’”
“Several developers also are looking at a site at West Seventh and Rio Grande streets, where CLB Partners once planned the 34-story 7Rio condominium tower. Dallas-based CLB shelved the project in 2007, and Will Cureton, a CLB founder and partner, said his firm dropped its long-term option on the land in December.”
“In the case of Aquaterra, Crescent already has entitlements for the site and would not need to go through a new zoning process. Aquaterra, announced in 2006, was designed to be 19 stories high, with 173 units. But Crescent shelved the project during the recession. Brett Rhode, an Austin architect who designed the original project, said the project is being reconfigured for apartments.”
“Charles Heimsath, an Austin real estate consultant who has done preliminary consulting on both the Crescent and Post projects, said that in the current economy, it is ‘very unlikely’ a developer could get financing for a downtown condominium project. Switching to apartments would be ‘an obvious choice’ for developers who own sites that already have entitlements, he said.”
The Houston Chronicle. “Randall Davis is going back to the gavel. Next month, an auction will be held for 22 condominiums at Diamond Beach, the developer’s light pink luxury resort at the western end of Galveston’s Seawall. Davis auctioned units at the property last summer, too. This time around, though, the bank is behind the quick sale.”
“Davis said he is not behind on any of his loan payments, but his lender, IBC, wants some of the Diamond Beach debt off its books. ‘The bank and I agreed after this period of time we’d be better off to have less inventory because then we can move prices upward,’ Davis said.”
“Condos originally priced from $445,000 to more than $1 million will start at $195,000. But there are reserve — or minimum - prices set for the beachfront units. Those prices are unpublished. The units for sale are two- to four-bedroom condos from 1,195 to 2,566 square feet. Diamond Beach has 116 units and 62 have been sold, Davis said.”
“At last year’s auction, 40 units were offered but only 14 sold. Sales prices then ranged from $300,000 to $325,000 for two- and three-bedroom units. Sales in Galveston’s housing market have seen an increase so far this year, but the market is still stressed. The number of property listings has been rising, and inventory in March hit 16 months, according to data compiled by the Real Estate Center at Texas A&M.”
“Davis said Diamond Beach rivals upscale Mexican resorts with its indoor pool, lazy river, swim-up bar, spa, private white sand beach and cabanas with built-in bars and private televisions. ‘These people will get the last of the bargains at Diamond Beach,’ he said.”
The Star Telegram. “Since the construction of the American Airlines Center, the whole area has transformed. Just a few years after it was built there were restaurants galore, office space and residential living, too. In 2011, at least to the eye, the area appears to have gone vacant.”
“After Dallas Mavericks media time on Wednesday, I strolled around some of the condos just south of the AAC as well as in between the two plaza buildings directly in front of the main entrance to the AAC. The place looks not dead, but the thriving social and business scene that once existed has been replaced by the feeling of an office park with some apartments. Gone are several of the restaurants. Gone are most of the high-priced shops, too.”
“A product of a down economy? Probably. Everything but the weather has been blamed on the economy.”
