‘Something We’re Seeing Across The State’
The Waco Tribune reports from Texas. “Anyone thinking about selling their Waco-area home should consider one thing — it’s crowded out there. About 40 percent more homes went on the market through August of this year than during the same period last year, according to the MLS.”
“That means sellers had better make their homes ’showroom ready’ and be prepared to give a little on price, said local real estate agent Bill Gohring.”
“Through August this year, 3,127 houses were listed for sale through the local MLS. That compares with 1,867 listed during that period last year. Buyers have had their choice of 1,260 more properties. The market is theirs.”
“‘Pricing is the name of the game,’ realtor Celina Fuller said. ‘If you’re not competitive, your home probably is going to sit there.’”
“‘Homes are not selling as fast as they were,’ real estate agent Lexie Leuschner said. ‘I’ve talked to people who sold homes in the Robinson area, and it took them 12 to 14 months,’ she said. ‘It’s frustrating for sellers.’”
“John and Karen Wood have been trying since February to sell their three-story home. Recently they lowered the price from $289,900 to $274,900, hoping for more inquiries.”
“That’s not all they’re doing. The buyer of the home will also get John’s 2001 Mazda Miata convertible. ‘The market’s kind of slow in housing,’ Wood said, ’so we decided to pitch that in there to sweeten the deal.’”
“Realtor Trammell Kelly said he considers the Waco housing market active, not glutted. New home construction has boomed, he said. ‘New home sales are going out the ceiling, and that puts a lot of resells on the market,’ realtor Jim Stewart echoed.”
“The situation in Waco ‘is something we’re seeing across the state,’ said James R. Gaines, a research economist at Texas A&M University. Gaines said inventories are rising for a variety of reasons. Newly built homes may be staying on the market longer, or people who bought homes as investments when interest rates were rock bottom may now be trying to sell them, he said.”
“Or homeowners who have heard so much about the housing boom may now want to take the plunge, sell their homes and ‘move up.’ Waco has hit the seven-month inventory level, Gaines said, adding that he considers anything above a 6.5-month inventory level to be a ‘buyers’ market.”
“‘Buyers can be picky and have more choices,’ he said. ‘They’re not going to be negotiating thousands off a price, but they are in a little better bargaining position.’”
I can recall at least one report of out-of-state buyers moving into Waco. A $274,000 house there better come with a lot of extras, IMO.
If something is overpriced, the economy will overproduce it.
And continue to overproduce it until the supply resets the price.
That’s a good point. There are many homebuilders in Central Texas, and no barrier to entry or construction.
‘It’s frustrating for sellers.’
I feel soooooo sorry for the poor frustrated sellers.
It does not need to be frustrating. Lower the price. It will sell when it is priced correctly. Paying the outrageous prices asked by sellers will be painful for buyers.
Recently they lowered the price from $289,900 to $274,900, hoping for more inquiries. That’s not all they’re doing. The buyer of the home will also get John’s 2001 Mazda Miata convertible.
5% price drop and a five-year old Miata. They haven’t got a clue.
How about a 30% cut and a 2007 Corvette Convertible ? Miatas are for girls.
I’m still holding out for the Bugatti Veyron. When they’re offering that, I’m seriously interested.
It would take a ‘73 Gremlin to get my attention.
Quit knocking the Gremlin! I had one of those, and at least there was room, when you lifted the hood, to work on the engine, change the plugs ect.
or would you take a Pacer instead?
The Hornet is the one for me!!!
Wasn’t the AMC Pacer the one where the two doors where different sizes? I kindas like it when cars are more symetrical
I would hold out for the Miata and a set of old golf clubs. And an ashtray. And a lamp!
LOL!!!
What’s the deal with the texas market? Some media reports indicate a mini bubble in some areas while others discuss the high rates of forclosures- especially Dallas. It’s like the bubble and crash in Texas are concurrent. My career may take me from Boise to Dallas, so insight on the Texas market would be appreciated.
There are definitely bubbles (where is TXCHick when you need her?) And there are many new developments spreading out from Dallas. I KNOW the uppity Plano/Frisco/McKinney area is pretty bubblicious. They just keep on adding seas of roofs in cow pasture going north. The construction is shoddy and the homes are over-priced. But hey, they are gated!!!!
That said, there are several on this blog in that area and they can give you some on the ground insight…
The DFW metroplex is a huge market - has a population of over 6 million spread out over 9,000 square miles. From the town with the 2nd highest per capa income in the US ( Westover Hills )to the towns of Wilmer & Hutchins with the absolute worst school district in the US ( the State ordered the school district closed for the 2005-2006 school year and has since been disolved ) with all sorts of towns in between.
There is endless land to build houses on and an endless supply of houses are being built. Anyone that has wanted to buy a house in the past 5 years has bought one, including some that had no business buying a house.
I don’t think it’s a price bubble. I think it is an overbuilding/stupid lending bubble. Housing remains cheap for most of Texas, but that didn’t stop people who shouldn’t be buying. The ARM’s encouraged a lot of people making $8/hour to buy a house. For the first few years they could swing the note. Not now, and not with the historically low appreciation here.
There are pockets here and there seeing bubble PRICES. Parts of Austin, much of the Hill Country, areas in Houston like West U and Bellaire. TxChic has some pretty strong opinions of Dallas as well.
TxChic, I am very upset that our “creative investor” friends in San Diego banned my ass.
go on with a different name and e-mail address
Interesting timing on this article. I have lived in Texas for a long time and my first job out of college was ordering appraisals on REO properties for the infamous institutions of the late 80’s here in Texas. This was in connection with the FSLIC turned RTC trying to unload the failed institutions under the Southwest Plan in Texas. There has been a lot of investor demand here even though for the most part prices have not risen dramatically….except for high rise condos/downtown conversions and some close in Dallas/Fort Worth urban areas (Highland Park, Turtle Creek area…).
Houses have been built everywhere, and many are sitting for sale. It is definately a supply problem, and the ARM resets are going to tip the market….and I think it is already happening for properties over about $400k….but the timing of this thing is hard to call.
Finally, I was at a social gathering last night and spoke with a Waco area real estate broker and asked him about the commercial RE market (he does both Res and Commercial), he was basically silent, then admitted the commercial side had been slow. Interesting though, because last year at this time everything was gangbusters!!!
Two things keep housing prices in Texas stable:
1. High property taxes
2. Too much land
It seems like they’re still making more land in Texas because the pastures surrounding DFW are endless and the HB’s are building up north to Oklahoma, east to Louisiana, south to Houston and west to Lubbock.
Some developers tried to start a condo boom near downtown Dallas, but it went bust before the buildings were completed.
I’d switch careers before moving to Dallas. No offense to you Texans but 30 days in a row over 100 degrees? That is time to say, “honey, pack up. We’re moving to Minnesota.”
30 days? I remember a 100 day stretch.
You kind of get used to the heat in Texas just like you get used to the cold in Minnesota. Many people could not take 30 days in a row under 0 degrees.
Don’t mess with Texas…real estate.
We sold a house in Dallas in 1985. Was trolling realtor.com in 2004 and saw our old house listed for LESS than we sold it for 19 years earlier! Not a fluke; other houses in the neighborhood were going for similar prices.
In Austin, we are seeing a tremendous amount of speculator buying. Prices are moving up - but not that much (so far). As for a deal - depends on what you’re looking for. A well cared for basic starter home can be had for 120 to 130. The Austin median is 178K which gets you probalby 4 bedrooms and 3 bathrooms - a nice family place in the suburbs. In town, 178K gets you a shack. For over $250K, you can get a very nice house with lots of extras. In the central city, 300K for a 3-1 house is a good deal while 200K for a fixer-upper is normal. The best place to try for a deal is S. Austin, the prices are not as inflated and the drive times tend to be shorter.
“John and Karen Wood have been trying since February to sell their three-story home. Recently they lowered the price from $289,900 to $274,900, hoping for more inquiries.
That’s not all they’re doing. The buyer of the home will also get John’s 2001 Mazda Miata convertible. ‘The market’s kind of slow in housing,’ Wood said, ’so we decided to pitch that in there to sweeten the deal.’”
Then, later in the same story, we see:
“‘Buyers can be picky and have more choices,’ he said. ‘They’re not going to be negotiating thousands off a price, but they are in a little better bargaining position.’”
Um, didn’t the sellers mentioned previously just take “thousands off” the price, without even being negotiated down by a buyer?
When did Reamtors become such dumbasses?
- The buyer of the home will also get John’s 2001 Mazda Miata convertible. ‘The market’s kind of slow ….
What I find interesting is that they use the phrase ‘The Buyer’.
WTF! Keep your damn used piece of crap and lower the price.
It’s not neccessarily the Realtors, it’s arrogance on the sellers part. Which a lot of times has nothing to do with the market. At the core it’s inbred into the American population in general. Everyone believes they are smarter than the next guy and what they own because they personally have owned it makes it worth more.
I mean really how much is a five year old miata really worth. Maybe 3,500. Why even bother?
Makes sense to me — by throwing in the Miata, you get a depreciating asset to go with your depreciating asset.
A five year old Miata is worth 12-13k. These idiots should just keep the car and lower the damn house price.
“A five year old Miata is worth 12-13k.”
Yea, maybe in your mind.
Um, didn’t the sellers mentioned previously just take “thousands off” the price, without even being negotiated down by a buyer?
That’s what he meant - the sellers will beat the buyers to that.
“That means sellers had better make their homes ’showroom ready’ and be prepared to give a little on price, said local real estate agent Bill Gohring.”
Every house does not need to be showroom perfect. They just need to be priced according to their condition and location. People that think dumping money into improvements will add value are mistaken. Yes, perfect houses show better, but every house I’ve ever owned needed some work and I bought accordingly. I know how to fix things up and I’d rather have a kitchen the way I want it than pay extra for someone else’s idea of perfect. It’s all about the price.
Haven’t you been watching Property Ladder or Flip that House? Every home today needs to have granite countertops and marble in the bathroom. Oh yeah, don’t forget hardwood floors throughout. It doesn’t matter if the market will support it.
Everybody needs granite. When we bought our last house it would have been $3,000 to upgrade to Corian, not even granite. We didn’t need Corian. We said, “no thank you”. Last night on Flip that House they ripped out a full kitchen of Corian and acted like it was pure crap. My wife and I just shook our heads. I repeated the phrase I have now said a million times regarding the real estate madness. “They have lost their f#cking minds.”
This is an especially telling story about the boom, since it’s from WACO. WACO is nobody’s suburb. It’s 100 miles from Dallas and 100 miles from Austin. The only ‘businesses’ in town besides the usual services are Baylor University and a couple of insurance companies. It’s a conservative, sleepy town, and most of the move-ins in the last 20 years are military retirees from Ft. Hood, 50 miles to the south. It’s ‘boom’ is gonna look a lot like Bakersfield’s and others–no real reason to have moved there unless you were in construction, building your neighbor’s house.
I think when people in Waco say ‘New home sales are going out the ceiling, and that puts a lot of resells on the market,’ realtor Jim Stewart echoed.”
they are talking in a very small scale, nothing like the scale in Bakersfield. I visited Waco last month, sent my son to Baylor, I did not see any housing tract building at all.
‘They’re not going to be negotiating thousands off a price, but they are in a little better bargaining position.’”
I love this quote. Sure, wait a year and you can cut tens of thousands off.
Simmsays…Future of Cell Phones
http://www.americaninventorspot.com
275K in Waco. Someone pick me up off the floor.
You could have bought my house in Dallas for less than that. On nearly an acre of ground less than 8 miles from downtown in a very nice neighborhood.
TxChic, don’t you know? Everyone wants to live in Waco. It has a great climate, terrific scenery, and Branch Davidians.
(Nothing against Waco, but $275k?)
I remember sitting in my office in downtown Dallas and watching the helicopters bring in the krispy kritters to Parkland from Waco that day in 1993. Waco is a true armpit.
And as far as your post on SDCIA, they deleted it but people who get emails rather than a digest got it.
Just go onto anonymizer.com or another one of those things that masks your IP address and you’ll be back in bidness on SDCIA.
Thanks! I forgot about doing that. Here’s a free service, BTW.
http://www.the-cloak.com
They are very uptight over there. I guess when you are paying off loans knowing that you are losing money with each passing day, the anxiety level is high.
One of the readers got the e-mail and wonders why the post was nuked. Here’s what got me banned:
—————-
Username: LouMinatti
Message:
I think appreciation will be nonexistent for at least 5 years nationwide. The only difference is how far prices will collapse in each region. I think much of the south (Florida excepted), which continues to see an inflow of population, will contract the least. In many of these areas, appreciation only kept pace with inflation. Georgia, Alabama, the Carolinas, Tennessee, Texas, these areas will decline between 10-15%.
Prices in Bubbletopia (AZ, CA, NV), Specutopia (places like inner-city Baltimore) and Condotopia, particularly southern Florida, will get wacked 50% or more. That would bring bubblezone prices down to 2002-2003 levels.
No place will be immune. No one will be able to say “it is different here.”
Stupid Politburos.
C’mon, you got banned for that? Tell me the part where you called someone a f* idiot d*bag is missing. That is pretty benign stuff.
yes that is benign. No profanities, no lies…. good grief, someone sounds like they have the industry stuck up their a$$ and can’t handle multiple viewpoints.
Umm where is this neighborhood? : ) Looking to buy a house, but skittish here in Dallas - I have no idea what the market is going to do, despite reading here and elsewhere pretty much everyday. Most of the stuff i see in the areas I’ve looked at (far North Dallas) are two story/minimal yard types of things. I’m single and an upstairs is useless to me. I’m expanding my “want to be in area”, as I work downtown (UTSW)
If you work in the UTSW/Parkland area then you should commute. Most of the surrounding area has been taken over by illegal aliens. Try finding a place in Irving, just west of the UTSW area. The Park cities to the east are too expensive and filled with snotty WASPs.
a sprawling ranch takes more land - and hey, they aren’t making any more land! Notice how there’s tons of land out there and they are still building homes where you can spit at your neighbor’s house. Too ridiculous…
Help me out here. Last night on flip that house two girls were fixing up a house in “Pflugerville, Texas”. Where is Pflugerville. The house was on 1.2 acres. It looked like real garbage land. The realtor told them to list for $315,000. It doesn’t seem to me that a place called “Pflugerville” would support a lot of $300,000 plus homes. Thank you to anybody that can enlighten me.
Just Notrh of Austin, about 10 miles i think.
Pflugerville was a nice sleepy Hill Country town when we were at UT in the ’80s. No way anything there should cost 200K much less 300K.
“It doesn’t seem to me that a place called “Pflugerville” would support a lot of $300,000 plus homes.”
Well, it does seem to me that a place called “Flushing” would be a good name for a town, but hey. There you are.
Exactly. Contrary to what you might think, Lake Toxaway in North Carolina is not an EPA Superfund cleanup site.
There are some $1mm + homes in that place called Flushing….no joke.
South of Dell in Round Rock and North of DT Austin. OK area…$315K seems high unless the house is very large and upscale. Must be more Austin boom housing…off to the E and NE of this area is endless land….
A house in Pflugerville for 300K - pls. 150K is probably the norm. Pflugerville is a sea of subdivisions - each one looks the same.
In Austin, there is a lot of pot culture. Obviously, the RE agent was stoned out of her mind!!!!!!!
Speaking of Texas, anyone check out “Flip this House’ with the new “team” in San Antonio? I don’t even have the words to describe these douchebags.
Here is something from their website:
“CREATE A PLUS MENTALITY.
So often we focus on what we do not have that we lose site of what we are trying to accomplish.
For example: Have you found an incredible deal, but struggled with putting up the earnest money for fear that your bank account will dip below your “comfort level”? If this is happening, you are losing focus on the fact that if you put together the transaction successfully and you are working with leveraged capital, you stand to make an infinite return on your investment. If you have done your research, take comfort in the fact that you will make a profitable decision.
The next time you have a financial decision to make and you are weighing the “pro’s and con’s” ask yourself, “Are my cons truly cons or are they excuses not to do the things that make me temporarily uncomfortable, but could bring rewards that are far beyond my wildest dreams?”
If you are willing to make decisions that temporarily make you uncomfortable, the rewards that you could receive from taking a calculated risk could be far greater than you ever anticipated.
Now go out and exercise your decision making muscle!
-David Montelongo”
http://www.montelongohousebuyers.com/From_20_David.html?PHPSESSID=a37cfb376eeaad38cbb043a0ba1a31a1
Enjoy.