Out-Of-State Speculators Put Texas On “Shopping List”
My San Antonio reports from Texas. “Canyon Lake’s billboards have evolved from advertising backwoods businesses to high-end developments. And it can mean only one thing: Canyon Lake has been discovered. Lots that a few years ago were choked with cedar are being cleared, with ‘for sale’ replacing ‘no trespassing’ signs.’”
“Everywhere, there are subdivisions. What was once a quiet, rural retreat for folks looking for isolation still boasts million-dollar views, but increasingly, the views come with a price tag to match. In the last five years, the median home price has increased 25 percent from $145,000 to $180,000, according to the Canyon Lake Board of Realtors. It’s the largest percentage increase in Comal County, outpacing New Braunfels, Bulverde and Spring Branch.”
“But it’s the land itself that is seeing the biggest price increases.”
“Area real estate agents say the rapid growth and appreciation have been the result of a kind of perfect storm in real estate: developers eager to cash in on the high-dollar hunger for lake views; out-of-state investors cashing out of waning markets on the East and West coasts and desperate to find a place to park their money to avoid capital gains taxes; and San Antonio families willing to commute to find affordable housing in the area.”
“Virtually all of these new developments market themselves as upper-end communities. These new subdivisions are attracting plenty of non-Texas interest. ‘We are seeing people from California, Florida, Colorado,’ said Ed Mullins, a Canyon Lake real estate agent. ‘I even had someone in from Turkey.’”
“Anthony Faleyn, assistant sales manager for Mystic Shores agrees. Out-of-state interest in Canyon Lake used to be unusual. Now he’s amazed when a Texan walks through the door.”
“Tom and Diane Purdy sold their home on Mercer Island outside Seattle and moved to Texas in 2004. ‘We decided we wanted to live in the San Antonio area. We’d lived here and Austin before and we looked at Lakeway, but it’s gotten too expensive. So we went online and found Canyon Lake,’ said Tom.”
“The Purdys settled on the then-brand-new Ensenada Shores, building a 2,200-square-foot home with views of the Hill Country and the lake. The development is now sold out, and Ensenada Shores is releasing lots in its next phase.”
The Dallas News. “Back during the Cold War, we all worried that the communists would take over. And as it turned out we should have been watching the folks from California. It’s true: Californians are taking over the Dallas real estate market.”
“Some brokers who handle retail and apartment purchases say that more than half their sales are going to California buyers.”
“In new neighborhoods up in Collin County, investors from California are purchasing new single-family homes, hoping to flip them and get rich. Downtown and Uptown condos are also being acquired by speculators from the West Coast.”
“At some point it will all end. During the late 1970s and early 1980s, a flood of Canadian investors and builders came to town to bid up prices and acquire choice assets. Later, it was Japanese buyers who had Dallas on their shopping list.”
“With our low real estate prices and low barriers to building and investing, North Texas is a favorite for out-of-towners looking to make some property deals. Eventually the money from California will stop flowing this way, probably when it’s needed to bail out problems at home.”
“So far this year, out-of-town investors have bought billions in Dallas-area property, and they’re still shopping for deals. So how could savvy investors get it so wrong?”
“That’s what the latest report on the U.S. property market suggests. In the collaborative effort of the Urban Land Institute and PricewaterhouseCoopers LLP, researchers conclude that ‘wide-open Texas markets favor developers, but they are never good places to invest.’”
“The Emerging Trends report says that Dallas ’sits in a flat, treeless plain’ (maybe they mixed us up with Tucson). The same report says that Austin is No. 5 among the best markets. I thought they said Texas markets are never good place to invest? Maybe they forgot Austin is in the Lone Star State.”
Remember this, California speculators: 3%. That’s what county and school taxes will run you. A comparable house in Texas make cost 75% less than the house you’re leaving in OC, but I understand your temptation to sink the $600,000 you got for your crackerbox into a new McMansion. And don’t forget to plan for those May-September utility bills. I understand McMansion owners are paying close to $1,000/mo to keep the A/C on during August.
All these newfangled real estate investment geniuses won’t have to worry about summer A/C bills, because they are all going to sell in the spring when the buyers come back in droves.
Those folks from Seattle didn’t mention how they found the heat/humidity outside their 2200 sq ft home. And the salesman is surprised when he sees a Texan come in the door?
Wow, Dallas taxes are high! We are only paying a little over 1% out in the country for county and school taxes. And we have “good” schools here, supposedly.
““In new neighborhoods up in Collin County, investors from California are purchasing new single-family homes, hoping to flip them and get rich. Downtown and Uptown condos are also being acquired by speculators from the West Coast.”
I’m not going to bore you all by spewing out the myriad of reasons that this is beyond stupid.
People doing this are some of the dumbest f**ers on the planet.
I feel your pain txchick; the same sh!t happened here in Florida’s armpit. Moreover, I know of some South Floridians who are full of equity and heading your way.
Amen - the same thing is happening in here in Austin.
““The Emerging Trends report says that Dallas ’sits in a flat, treeless plain’ (maybe they mixed us up with Tucson)”
No comparison. Tucson is paradise compared to Dallas.
What part of these Californians are actually moving to Texas and what part are just buying a house (or two or more) as an “investment?” Are these the same people who “are flippers in trouble in Ca?”
If people want a change of scenery and lower living expenses, that’s one thing (but what about a job?). One the other hand, it seems idiotic to just pump up the bubble in a new place, as the result seems inevitable.
San Antonio is a nice town. Too bad the morons have “discovered” it.
You know what’s funny. Cedar Hill in SW Dallas County is quite beautiful, sort of like the San Antonio developments in that article. Beautiful cedar trees and hills on the White Rock Escarpment. And it has been developed some, by Blue Green among others. But for some reason, it just won’t take off and get the dollars in like these other places and I don’t know why (well, I sort of do). I have six lots down there I bought for less than 10K each after the Supercollider project blew up and a bunch of developments busted. It’s by a lake and a state park. Yet the idiots keep building north in places like Anna, Prosper and god knows where else.
txchick57, what do you mean by “well, I sort of do”. Why do you think Lake Ridge hasn’t taken off?
The stigma of too many “Democrats” in the area. Hey, I don’t buy it, but there it is.
That means it might actually be a nice place, rare for texas, very rare.
Josh
Interesting. If I guessed, I’d say Lake Ridge is split 50/50 Republicrat. This side of Cedar Hill (or DFW for that matter) is beautiful, and the rush hour drive is still decent: only 40 minutes from there to uptown Dallas.
“Democrats” means minorities.
Yea, I know what you meant by democrats. It still seems about 50/50. It becomes a self-fullfilling prophecy if a particular demographic will or won’t move there because of perception.
There are still a lot of empty lots in Lake Ridge…
Empty lots and growing… Lake Ridge has expanded into Ellis County, and Blue Green continues to develop more lots for sale on the south end. They are finishing a gated area on the bluff at the south end. A couple of one acre lots were there were being marketed for $300,000.
I made a really lowball offer on a very cool place in Lake Ridge a month ago. No response and they have not taken it off the market. Not many people down there willing or able to spend 700K on a house.
How many square feet for that house you made an offer on? Was it on the Dallas county side or the Ellis county side?
3800 sq. ft. Dallas County side. I’m still birddogging it.
I ask because here’s an interesting home in Lake Ridge:
http://dallas.craigslist.org/rfs/214277282.html
3000sqft living area under $400k well below $700k.
How long do you think a home like that would stay on the market at that price in that area?
A long time. That looks like a Wes Pool place (i.e., possibly junk).
The one I like is
http://www.ziprealty.com/buy_a_home/logged_in/search/my_home_detail.jsp?listing_num=10609627&property_type=SFR&mls=mls_dallas&cKey=fh3tbhrt&source=GDAR
Hmm, your zip realty link shows “property…no longer available”…it doesn’t show any property.
Wes Pool? Nah, I’ve seen this house in Lake Ridge. It’s not Wes Pool-like. I’ve also seen Wes Pool’s little subdivision about 5 miles north of Lake Ridge…it’s homes look more like townhomes all squished together on small lots.
I took it off “My Zip Realty” - maybe it’s gone now. It was a very contemporary concrete place with an infinity edge pool. Very Southern California - like. Totally unsellable in the Dallas market I would think, but ridiculously overpriced.
About five years ago I drove through Canyon Lake and wondered why on earth anyone would be building condos and townhouses up there. Now I know, and they truely ruined the area, like most of the hill country.
BTW, IMO the lake is not a reasonable drive from Sna Antonio and there is enough land to build on in Comal county to take every last spec dollar.
None of these speculators will make a dime reselling these places.
Calling them “savvy investors” was good for a bit of amusement though. Now that Danielle has left the Morning Snooze, they let that idiot Brown run amok. The local realtors love it though, although the ones I have talked to say the market is not good right now. Duh
Yeah, Brown is a perma-bull. We exchanged emails a while back. He asked me, ‘why a blog on the housing bubble?’
I sent a few emails Brown’s way, and he responded to each of them. I told him I’d be saving all the cheerleading articles to send back his way when this all comes crashing down. The condo developments alone in and around downtown, uptown, etc. are mind boggling. And every last one of them is marketed as: luxurious. Still more of these highrises are in the planning stages. This is truly going to be so much worse than the S&L meltdown of the late 80’s
Ben,
I did the same thing a few months ago and totally agree. We drove through the River Chase development and the “view” reminds me of a sanitary landfill.
Empty lot after empty lot after empty lot…….all with For Sale signs. Not a single house warranted stopping at, much less going inside.
The soil is about 6 inches of soil on top of hundreds of feet of solid limestone. Hey, if investors want to scarf up lots; have at it. On a scale of 10; that particular area is a 3. I wondered why there was little or no landscaping…..there’s little or no soil!
Taxes…..take a peek at Bastrop, TX to get an idea of where TX taxes are headed. I was sent several listings in that ISD and a couple of listings in the mid $400k range had annual tax bills from $11k to $14k.
Last comment….don’t even think the new state law limiting annual increases in property taxes as the legislature included an “out” for Districts to raise taxes WITHOUT a referendum if they feel it’s an emergency.
Nuff said……
I was sent several listings in that ISD and a couple of listings in the mid $400k range had annual tax bills from $11k to $14k.
And yet somehow one is “throwing away money” by renting!
“Virtually all of these new developments market themselves as upper-end communities. These new subdivisions are attracting plenty of non-Texas interest. ‘We are seeing people from California, Florida, Colorado,’ said Ed Mullins, a Canyon Lake real estate agent. ‘I even had someone in from Turkey.’”
The bubble will have its Alamo in Texas (with flippers on the losing side) — at least whatever vestiges of investment demand do not die of thirst out in the middle of the Arizona desert.
“In new neighborhoods up in Collin County, investors from California are purchasing new single-family homes, hoping to flip them and get rich. Downtown and Uptown condos are also being acquired by speculators from the West Coast.”
Can this really still be happening? Hasn’t anyone informed these GFs that the music has already stopped?
For some there head has no brain, therefore the music continues to echo!
The answer is no:
‘Cash-out’ refinancing is highest since 1990
“SAN JOSE, CALIF. - Spurred by higher interest rates on their adjustable mortgages and home equity loans, many homeowners are refinancing their mortgages — and taking out bigger loans in the process.
In the third quarter of 2006, more homeowners obtained so-called “cash-out” refinancing than during any quarter since 1990, mortgage financing company Freddie Mac said last week.”
http://www.chron.com/disp/story.mpl/business/4310253.html
The article doesn’t say WHERE the majority of this is occuring, but I think I can guess.
Another blogger once said they don’t know the music stopped because the cash register’s ‘chi-ching’ is still ringing in their ear.
OT but wow, congratulations to Collin County native Lance Armstrong. Amazing finish in the NY Marathon! First try!
Seven-time Tour de France champion Lance Armstrong finished his first marathon in a hair under three hours. Armstrong crossed the finish line 2:59:36, easily making his goal of finishing within an hour of the men’s winner.
OT - usually I agree with you but I don’t think you are being consistent this time. Here is a man that was accused of doping (which we can’t prove, but is easily hidden). He also walked out on his wife and kids for that tramp singer Sheryl Crowe and then promptly left her for someone else. Now being the classy, learned woman that you are, why would you laud a man who walks out on his family?
I laud his athletic achievement. Finished within an hour of the men’s winner and a half hour of the women’s winner in his first try. Whether you like the guy personally or not, he’s 35 and that’s an awesome achievement.
Its not an issue of whether I like him or not, but an issue of whether he is basically honest or not. I know that people will accuse others of cheating out of envy or because of being a sore loser, but absent an evidence one wayor the other, we have to look at the person’s life in general. This helps us determine whether they are generally honest or not. Cheating on one’s marriage vows, walking out on kids, etc. doesn’t speak of high morals. Soif he cheated in one area, in all likelihood he cheated in others. Please don’t make it sound as if I am illogical, because in any licensing field (medical, law, CPA, etc.) they look at your morals and/or any crimes you have committed before issuing and/or renewing licensing. So if morals is an issue for most professions, it should be for sports as well.
Further, it doesn’t speak well of any woman to laud a man who mistreats other women regularly. If it weren’t for general lack of morals in our society over the last 20 or so years, then this blog wouldn’t have been necessary in the first place. People here have put down most realtors and mortgage types just for being so; so we must be consistent and not let others slide for their lack of morality as well. the example Lance Armstrong sets in his personal life will most assuredly be watched and emulated by young men all over our country, unfortunately.
Just my two cents, which is probably what its worth…
Really, I was commenting solely on his athletic prowess which, as a wannabe bike racer and marathon runner, I am in complete awe.
And Lance’s neighbors are mad at him for ruining dead Man’s Hole.
DEAD MAN’S HOLE — When Lance Armstrong, the famous cancer-slayer and Tour de France champion, bought a 200-acre ranch in the Texas Hill Country several years ago, his neighbors didn’t expect any trouble.
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Despite his fame, they figured they had something in common with the star cyclist, who was drawn to this countryside about 40 miles west of Austin for the same reasons they all were: the breathtaking landscape, the privacy of the hills and, above all, a shimmering emerald pool hidden deep in the embrace of a fern-draped limestone grotto. “Armstrong was so taken with the pool, called Dead Man’s Hole, that he began his 2003 book, Every Second Counts , with descriptions of it. He writes that jumping off the 45-foot waterfall into the pool was his “own personal way of checking for vital signs” after cancer, and that facing the fear of the jump was a cleansing, clarifying experience.
But there’s nothing clear about Dead Man’s Hole now. Three years later, the water has turned from glassy green to pea soup and Armstrong is in hot water with his neighbors, who blame his dam-building project for causing a mess that he has yet to clean up. “
First of all, despite what Texans say, these trees are most definitely NOT cedars. They are all around my Waco area subdivision too. To call these scrubby juniper trees cedars is just more Texan false advertising, lest anyone think we are talking about the magnificent western red cedars from the west coast or the white cedars of Maine. What Texans call cedars are actually Juniperus Mexicana or Mexican Juniper. And they are an invasive pest species that swallow prairie and choke out native oaks.
As for San Antonio. I was down there a couple weeks ago and was absolutely astonished by how much new commercial and residential construction is going up along the 1604 outer loop freeway in north and northwest San Antonio. The amount of commercial property currently under construction is unbelievable. Looks to be growing even faster than the Plano/Frisco area and that’s saying something. It was a Friday afternoon and to avoid driving back through Austin during rush hour I decided to drive back to Waco through the hill country via US-281 and the suburban sprawl stretching north from San Antonio along this corredor is quite extensive. So much of it looks brand new.
If investors and out-of-state speculators are fueling all this growth then they are in for a world of pain. Because San Antonio simply doesn’t have the wealth or economy to sustain that sort of growth.
I was reading the WallStreet Jurnal a few days ago. The president of Catapillar said “There will be a significant correction in the housing market in 2007″. I subscribe so I will go back and see if I can pull from the sight and post on here. I think it was a very powerful statement in regards to the direction of the economy and the housing market.
OK_Land_Lord,
The builders have been issuing dire warnings for months already. Funny how they seem to be lost on everyone except for a few bloggers.
Thank you Kent! You are right. And what’s worse, the drain the soil of water ruining it for native species. Also they are high on the allergy list. Many people with no allergies (that they know of) suddenly discover them in the Austin area.
About five years ago I drove through Canyon Lake and wondered why on earth anyone would be building condos and townhouses up there. Now I know, and they truely ruined the area, like most of the hill country. BTW, IMO the lake is not a reasonable drive from Sna Antonio and there is enough land to build on in Comal county to take every last spec dollar.
Exactly. Canyon lakes is actually located almost midway between San Antonio and Austin and is not adjacent to any major highways which means a lot of 2-lane highway driving to get over to US-281 which itself is not a freeway but simply a 4-lane divided road with traffic lights all the way into San Antonio. If this area grows like they are saying then that 45 minute commute will turn into a 2 hour deathmarch in short order.
It has already grown that much. Comal co was the second fastest growing co in TX for several of the past years.
“As for San Antonio. I was down there a couple weeks ago and was absolutely astonished by how much new commercial and residential construction is going up along the 1604 outer loop freeway in north and northwest San Antonio.”
We drive that at least once a year when I take the kids to Fiesta Texas. How will the San Antonio economy float all these new homeowners? As I said, I like SA but it is a city built on tourist dollars and the military. Neither pay very well. There are some exceptions (USAA, Southwest Texas Research Institute), but these two orgs are not growing enough to provide thousands of new jobs each year. There’s also the new Toyota plant, but this is on the far south side. I doubt blue-collar workers will be commuting to places like Boerne, and while they can afford a decent house on the south side, I don’t think $17/hr will cut it for a new McMansionette.
When I was at UT I dove hunted at a classmates ranch In Boerne every weekend during the season. There was nothing in that area in the 80’s except one general store that doubled as a post office and one country kitchen. Great times!
Fortunately, there is still a lot of great hunting in Texas. Wish I could afford the King Ranch stuff.
Go to Boerne now and you’ll see trendy shopping, snobby attitudes, and houses from $300k to $1M+.
I shopped from Kerrville over to New Braunfels and never located anything that justified the cost. I know CA housing is a whole different animal but this thread demonstrates how screwed up fundamentals are; regardless of location.
I’m still pounding on the comps w/offers in a couple of markets. Haven’t been shot yet, but you never know when it comes to Texas….LOL
I interviewed with Southwest Texas Research Institute…..they don’t pay anywhere close to what they pay engineers in Austin, Plano, or here in California.
We drive that at least once a year when I take the kids to Fiesta Texas. How will the San Antonio economy float all these new homeowners? As I said, I like SA but it is a city built on tourist dollars and the military. Neither pay very well.
San Antonio is the Orlando of Texas. That’s the best way to describe it to outsiders I think. It’s a pleasant enough place but there really isn’t any THERE there.
In point of fact, I do think the San Antonio area is nicer and prettier than the DFW metroplex area. The scenery is prettier and you are only a couple hours drive to the ocean in Corpus Christi so it’s better for weekend getaways with the kids. From Dallas the only places you can get in 2 hours are Oklahoma or Waco.
There’s scenery in DFW? I’ve been there a few times and I didn’t see any. Just barren, flat wasteland. Florida without the beach. Where are they hiding the scenery?
There are parks and lakes. Some of the old neighborhoods have nice old trees. When my grandfather first showed up there in 1920, the streets were paved with a durable wood from local trees.
SW Dallas County. You’d think you were in Austin.
Yep, Midlothian is a real gem. The giant cement plants and smelters really add to the ambiance. Or is that further SW than you are talking about?
That’s east of what I’m talking about. Cedar Hill and DeSoto are a small enclave north and west of there. My husband used to always bitch about the cement kilns as a reason we couldn’t buy there even when I wanted to.
The true prairie is actually quite pretty in an understated sort of way. But you sure can’t find it many places near DFW anymore. Maybe Kansas.
But you’re right. No one moves to DFW for the scenery.
we live across from acres of beautiful undeveloped prarie land which hasn’t been overrun with trees (most trees are weeds in central Texas). When I get back in town I’ll take a photo and post a link. It’s best in the spring and summer when most of the wildflowers are in bloom, but even in the winter it’s alive and blooming while just about all of the area trees look dead.
There’s scenery in DFW?
It’s not all terrible. I remember mountain biking years ago off of I-30 near Arlington, on steep limestone hills covered with those much-maligned junipers, though lots of the open areas there now seem to be covered with development from what I see on GoogleMap satellite views.
Parts of Fort Worth near TCU were pretty nice, and I actually could ride my bike through to downtown Fort Worth. Quite remarkable for Texas, I thought. Some of my friends (richer than I was!) had some remarkably nice lakefront houses, quite pleasant outside of the 4 months of sweltering summer.
My first impressions of the area, though, were of horror. Lots of those freeways are lined with strip malls, pipe yards, and cheap hotels, so if you’re driving from DFW airport to a hotel conference room, it can look pretty awful. But venture back a bit into the neighborhoods, and it can be nice — in spots. You just have to know where to look. (Maybe you can say that about anywhere, eh?)
“San Antonio is the Orlando of Texas. That’s the best way to describe it to outsiders I think. It’s a pleasant enough place but there really isn’t any THERE there.”
Kent — great way to describe it. As an Orlandoan, I can picture it. Since our property taxes are 2% and that’s too high, I sure won’t be moving there for 3%.
txchick:
Just curious. What do you think of those upscale burbs northwest of DFW where a lot of new monster mcmansions are going in. I’m talking about places like Southlake, Keller, and Colleyville. Because my wife is on the faculty of a family practice residency program I know a number of young doctors who are moving up to those spots to establish practices and join groups. They and their young wives are almost all universally bubbly about those towns. The schools, the housing, the shopping, etc. etc. My wife and I drove through Southlake out of curiosity last month just to see what was there. And really, there didn’t seem to be any THERE there. Certainly no scenery to speak of. Lots of cul-de-sacs with huge new houses and some spiffy looking new schools. And lots of SUV congestion around the new Costco. But really no different from any other Dallas suburb when it comes down to it. I couldn’t see where the outrageous prices and attempt at exclusivity was going to be sustainable. Because once Southlake gets built out someone is just going to build a newer spiffier Southlake someplace else. Are those folks building the worlds largest collection of white elephants? Sure seems like it to me. The houses aren’t even pretty or interesting. Just massive and ornate in a generic hotel sort of way.
Around Lake Grapevine isn’t bad. If I were sentenced to live north of LBJ for the rest of my life, I’d be looking in Grapevine, Colleyville or Southlake. But that’s damning with faint praise.
I think the median house price in Southlake has passed $400 grand. They are all huge, so I don’t know what that works out in square footage. But it does seem to me like those “exclusive” burbs are seeing recent appreciation that certainly exceeds the rest of the region.
That’s what I’m talking about. Are those places especially bubbly? Because it sure seems like it to me.
I don’t know because I haven’t priced things out there. I have heard the area is popular with the equity locust crowd who actually move into their McMansions , so probably it is. Heaven help them when they want to leave and try to sell.
The Dallas Morning News has this interactive chart on their web site:
http://www.dallasnews.com/sharedcontent/dws/graphics/homesales/
According to the chart the median price for Southlake is now $495 grand ($137 sf) and the average days on market is 57. Sounds pretty bubbly to me.
In July 2006, median appraised value in Southlake was about $418k. Southlake has higher prices than Grapevine, Keller or Colleyville. There’s still some land here, horse people, folks that have been here 20-30 years when it was all farm and ranch. Some things are good, some bad. Too much money, in my opinion, and oversized houses, but a fair number of nice people and a pretty good community feel. We’ve got an older home on several acres, and I have horses and places to ride. Yep, lots of SUVs and shopping, but the schools are pretty good, and several lakes reasonably close (Lake Grapevine is 10 minutes). As for scenery, well, it is Texas, but there’s areas with lots of trees if you look for them. Bottom line is that we’ll probably stay until the last child is out of high school, then move to someplace more rural.
Yesterday, I was talking to a Pulte crew supervisor, here in Austin. He said that there was “nothing” coming in, with respect to new orders, and they were rushing to finish existing work. And he was fearing the coming layoffs.
Really - at teh City, where I work, we are permitting several new subdivisions per week. It’s been really busy lately.
What part of Austin is seeing that kind of growth?
I know nothing about permitting. Does granting of a permit require actual building out the subdivision within a specified period of time? Or is it open-ended? Just trying to reconcile how this report of slowing business with your direct observation.
Getting a permit does not actually require the person to construct. However, in order to get a subdivision permit, the developer must submit a fiscal bond or pay a (very large) cash deposit. This ensures that basic infrastructure will be built if the developer defaults or skips town. The developer cannot get a bond released or the deposit back until all infrastructure is completed to City standards. So, for all practical purposes, yes – it basically ensures the property will be developed.
We are seeing growth in the SW part of town (Circle C) in anticipation of AMD. Also, there is a lot of growth in East Austin near the Travis County Expo Center. That is the last really afforable land in Travis County. There is also a lot of growth in Near I-35 and Slaughter. Finally, don’t forget the Muller airport.
Thanks for the update. When we left two years ago, there were still no plans to develop Mueller. It’s also interesting that the east side is developing - traffic on 290 east was already pretty bad.
Did the light rail finally pass?
No - however, the last vote was very close - something like 48 to 52 percent. Cap Metro still acquired the tracks so they are probably going to pursue it in the future.
The Muller arport looks really cool. The housing is being built now and will be released next summer. Check out the stuff online - it’s really neat.
The Dallas News. “Back during the Cold War, we all worried that the communists would take over. And as it turned out we should have been watching the folks from California. It’s true: Californians are taking over the Dallas real estate market.”
Look upon my equity, ye mighty, and despair!
I think the Clownifornians are responsible for a lot of the horrendously ugly teardown and rebuild McHugeboxes in some of the older neighborhoods. I took pictures of some of them for Ben. Need to dig the camera out of the box.
I grew up in Oregon. Back in the early 70s the popular bumper sticker in Oregon was “DON’T CALIFORNICATE OREGON!” and it was in response to all the California equity refugees of that era who were developing the Oregon coast and trying to shut it off to public access. Those times seem positively quaint today.
“Back during the Cold War, we all worried that the communists would take over. And as it turned out we should have been watching the folks from California.”
That hit my funnybone — a Jeff Foxworthy type of line. Made me think of a great redneck line from a song I like, appropriate to the bust: “I ain’t broke, but I’m badly bent.”
I almost moved out to Canyon Lake in 2003 after leaving NYC and moving back to Austin. I thought that I wanted to be out in the country, and a friend suggested I drive through. I spent a couple of days and looked at a couple of places to live, and basically drove around the lake. It really didn’t impress me all that much. I ended up back in Austin. Sounds like it’s taken off since then, but … why?
Wemberly is one place that impressed me. Small and quaint, but close enough to be a bedroom community for someone who didn’t have to go to Austin every day. That’s largely what Dripping Springs is now.
I would love to own land near Johnson City or even Fredricksburg. Avg. summer temp is 10deg cooler than Austin, and close enough to get in 2-3 days a week, but not much more. Haven’t closely followed those markets, but I expect they’re up along with the rest of the state.
I have a friend with land in Leakey, which is fairly bucolic and on the other side of Lost Maples. I like those parts. I like Big Bend region as well. If I could avoid the summers, I’ve thought to look as far as Presidio. Border Town with access to US markets and Copper Canyon on MX side. Brutally hot tho. Marfa has already been “discovered”. Dunno the specifics on most of these housing markets, but I’m thinking land and remote. No hurry, and with the speculative bubble bursting, I can pick my moment over the next few years at least. Prices ain’t going up in the sticks too much, maybe we get someone looking to dump property cheaply to raise money?
Austin market is hit and miss. There is a huge amount of work being put into gentrifying the East Side that will lead to infill. New light rail system will change the flow. Closer in is safer. Economy in Austin is fairly diversified, and has room to grow. But the State as a whole booms and busts with oil, and Austin booms and busts with oil. I live with a friend who owns property north of the former airport that is being filled in with a Children’s Hospital courtesy of Michael Dell, and a lot of townhouse type buildings with retail and hotels. This neighborhood is hot, and getting hotter. 78723 Parts of it only. I’ve been trying to convince my buddy to sell for years now. He’s slowly coming round. In this sense all real estate is local. I could point a speculator to houses on the Eastside in Austin today that could double with the right touches. Perhaps not, but very unlikely to lose value. I just watch housing, and make my money speculating in stocks. Much more liquid, and shorting is where the money is to be found rsn. Ignore the dividends and short the lenders like NEW, NDE, CFC … if you believe there is a rough protracted landing set for the housing industry.
p.s. really dug the behavioral economics discussion a few threads back. I have a ba in cultural anthropology and have been fascinated by economics for the past few years. The math always turned me off. I did recently take macro econ at acc and enjoyed the experience. The reason I ended up in anthro over sociology is that I found the mathematics and statistics of sociology offputting and misguided. The narrative and behavioral ways of anthropology were more appealing.
The Fed is in a difficult bind, and the economic indicators are giving mixed signals, in no small part due to the fact that numbers are so thoroughly baked. I’m not convinced they have any real sense of what they are doing, but they realise this is thin ice they’re treading on. If the bogeyman of deflation wins out, then we should expect a hyper-inflationary cycle in which case what happens to deflating housing stock? Credit is stretched to the limit, and foreign lenders are going to cut back for sure or demand higher interest rates.
Lots of great inside info on central Texas, thanks. BTW, I worked at ACC as a tutor while studying for the CPA exam. They don’t give F’s cuz it would hurt the students self esteem.
I just watch housing, and make my money speculating in stocks. Much more liquid, and shorting is where the money is to be found rsn.
You got it. I haven’t seen a house yet that can double in a week or two but that happens all the time in the options markets.
I recently had calls in Rowan that doubled on me in a single day. First time I’ve ever had that happen. Unfortunately I only had about $800 on the line. Fortunately I sold half and removed all my initial capital. Unfortunately they went down from there, and have been down at the buy price ever since.
I moved to No Texas from California and I think the house prices are increditably low…… But the taxes will get some that don’t pay attention to how much it adds to the housing bill. I decided to rent for awhile.
There is enough land in Texas to build for the next 50 years. In fact, I think they’re still making land in Texas, so the RE agents can’t even use that line here. Good luck on flipping for a profit.
Don’t try telling the out of state geniuses, that, Jerry. They all know better than us.
Specualtion in Texas is a zero sum game since home prices never increase much at all since there is so much land. Just because it is cheaper doesn’t mean it is a good investment. And yes, the 3% tax in many Texas cities is a killer and puts a firm lid on home appreciation. I thought about buying a $690K McMansion in San Antonio and when I caluclated the tax at $20,000, plus the thought of living in 100 degree heat every day for 5 months, it made no sense. Frankly, a $900K house on 4 acres of land in the hills of Ramona, CA seems a better life.
Interesting posts about Texas. Thanks to all for their informative insights. I relocated to the Big Bend from the Bay Area a few years ago to the town of Alpine and think the region is a blessed place. The region is isolated, but gorgeous - with a sky that stretches for miles. And the people are wonderful. There’s a saying here: “If you like malls you won’t like the Big Bend.” True enough. No mall rats, but we’re beginning to see a steady trickle of outsiders from LA, NY and the big Metros who are buying up the adobes. I fear the trickle is going to become a stream, however. Movie star Daniel Day Lewis was shooting a film here this summer. David Byrne, the musician, showed up to hang out. And the adobes? Three years ago they were going for $30K in Alpine. Now they’re $70K, and they still need work. In Marfa, which has been “discovered” by the trendsetters, they’re $150K and up. It will be interesting to see how the market evolves. You can get a decent house for $150 in Alpine, though the taxes will be higher than what most “coastals” are accustomed to paying. The local realtors are beginning to push “adobe” in their sales literature, though they scratch their heads and wonder why people want them.
Alpine is a very pretty place as I remember. I visted a Ranch there, Woodward was the name. You can find Agates there.
Haven’t been to Big Bend or Marfa for that matter. Out of curiosity I Mapquested it and Marfa is 529 miles from Waco. You really are out there in the middle of nowhere. New Orleans, Little Rock, Jackson MS, Oklahoma City, even Wichita KS are all closer to the Central Texas I-35 corredor than Marfa.
Hey Bigbender, I’ve been entranced with that part of the state since I first set eyes on it. I like Alpine, from what I’ve seen. I’ve never been to Presidio but I expect you have, and Ojinaga as well. Opinion? One day I’d like to get 100 +/- acres near Presidio or maybe between Presidio and Alpine. No structures necessary, but water would be. I remember looking at those houses for $30k and thinking maybe I should buy one. Had a lot less capital then. I should probably start watching the prices out there, and biding my time.
O M G! Looks like there’s plenty of GFs still out there. We even learned that our friends who have lived in Texas for over 30 years recently bought a new “investment rental” in Arlington. That’s after their own house took a deep dive in the late 80s, and since then the appreciation has only been about 1% a year.
Amazing!
Definition of insanity - Keep doing the same thing over and over and expecting different results!
This is all very interesting. Most of you are right about property not appreciating. My parents bought a 3500 sq. ft. house in North Dallas for $250,000 in 1985. It was in Richardson Schools, and I attended one of the top ranked public high-schools by the US dept of Education. All of the other houses in the neighborhood were a similar size, or larger. They sunk $50k into renovating it, and sold it in 2003. Guess what it sold for? $250,000. Larger houses in the neighborhood can still be had for a similar cost per square foot, 20 years later. For those of you that are curious about the location, it was north of campbell road and Hillcrest. In 1985, this was definitely the burbs, but compared to what has happened in frisco and plano, it is not as far out as one might think. Houston, where I live now, is not much better. Colleyville is the home of many corporate regional VP’s that travel a lot, but don’t have much of a local office presence (Consumer Products companies).
My wife called some builders in North Austin / Cedar Park area. The salesman told her to go ahead and take 10% off the spec home prices listed on the web.
Anyone can go to either the Williamson or Travis county assessor’s web page and look at housing prices for the past 5 years or so. Pretty much prices stayed near flat from 2001 - 2005. Now the 2006 assessments are much higher. I realize the local Austin economy has recovered well AMD’s and Samsung’s recent successes, but it’s obvious the equity locusts have moved in.
Craigslist even has a call for people in Austin who want to be on the tv show “Flip that House” …a definite sign that you don’t want to buy.
The scary thing about people investing in middle of nowhere Texas is that this is not the only place this is happening.I am from Knoxville, TN, which is a small southern city near the Smokey Mountains. Anyhow, I’ve been gone from there for almost a decade and moved to California, and have been accustomed to housing being overpriced here but never associated Knoxville or most of that region with anything close to a bubble.
This last month I took a trip to see the family. In more recent years there has been quiet a bit of speculative fever going on in the dowtown Knoxville area. Lofts, fancy restaurants, art galleries, and brick sidewalks have been showing their ugly faces in an area that has never had anything like this before. Knoxville has been a primarily working man’s, middle class city.
We ate at an Italian joint that had a full wine list, dishes that features things like exotic cheeses, pine nuts, rissotto, and other items you would have never seen in a establishment in town before. The waiter was from Brooklyn. The woman who seated us was from Denver.
Everywhere there was people driving cars with out of state license plates: California, Florida, South Carolina, New York… Basically most of the bubble states. I can easily see what’s going on. People that are either fed up, fortified with cash-out money, or people that have heard how “cheap” it is in the South are moving in.
This is a problem because when you get people from states where prices are 4-5 times higher than it is in say Knoxville TN, then they’ll be in the mindset that ” hey- that whole house is only 250k!” - when in fact, if you compare that house to what the average area income is, it is actually very high. When people from other states who are accustomed to the idea of spending 90% of their income on a mortgage come in and gladly do exactly that, they drive up the prices for everyone and could potentially throw the entire region into economic turmoil.
So what am I doing to prevent this? The best I know how to do is simply badmouth the entire Southern region to perhaps scare these Californians, Coloradoites, and other strongly Liberal areas from considering it. But I fear it might be too late. A swift correction in the bubble area RE prices will surely cause these people to back down from the idea.