“A Significant Shift” In Texas
The Star Telegram reports from Texas. “New-home starts and sales fell sharply in North Texas in the fourth quarter, as builders adjusted to the slowing market. Builders are cutting back building new homes and selling land they have stockpiled, analysts said.”
“‘We have the most new-home builder inventory that we have ever seen in the market, and we have ample existing-home supply, and we have foreclosures,’ said Ted Wilson, principal at a Dallas-based housing-tracking service.”
“Wilson said the cancellation rate has risen as well. The percentage of failed contracts has jumped to 35 percent from 25 percent, Wilson said. He cited three factors: credit problems, investor walkaways and the inability of potential buyers to sell their existing homes.”
“Home buyers should continue to see lots of incentives as they shop for new homes, Wilson said. ‘It’s tough right now. A lot of builders are not making a lot of money,’”
The Dallas Morning News. “Local homebuilders have gotten the message about the housing slowdown, sharply cutting construction during the final months of 2006. Single-family home starts in the Dallas-Fort Worth area dropped more than 17 percent during the fourth quarter.”
“With 9,629 units, it was the weakest quarter for housing starts in two years. Sales of new homes in the fourth quarter also dropped about 4 percent compared with a year earlier. With almost 12,000 unsold new houses on the market in North Texas, don’t be surprised to see further declines in construction, said Ted Wilson.”
“‘The builders have continued to back off starts,’ Mr. Wilson said. ‘Everybody is taking a good, hard look at the business.’”
“Don’t be surprised if housing starts in the D-FW area are more restrained this year. That’s because builders overdid it early in 2006. The problem is even worse on the West Coast and in Florida.”
“‘A lot of big builders are having severe problems in other parts of the country,’ Mr. Wilson said. ‘On a weekly basis, I’m hearing about layoffs around town in the industry.’”
“‘It’s definitely an adjustment that any prudent builder is going to make for the market conditions,’ said T.W. Bailey, president of the Home Builders Association of Greater Dallas.”
“Some buyers are bailing out of purchases, Mr. Bailey said. ‘We are seeing some cancellation orders from people who made a commitment and see a change in their income and future,’ he said.”
“The fourth-quarter decline in new home sales mirrors the fall-off in sales of preowned homes in North Texas. Earlier this week, the North Texas Real Estate Information System reported that preowned home sales in December were down 5 percent from a year earlier.”
“December was the seventh consecutive month of lower pre-owned home sales in North Texas. It was the fourth consecutive month that home prices were down from the previous year. Some of the largest sales declines in 2006 were centered in homes priced under $150,000, where buyers were affected more by higher mortgage rates.”
“Industry analysts say it’s too early to tell whether 2007 will be a better year for the housing market. ‘January and February will probably still have some decline – normal cyclicality,’ said Jim Gaines, an economist with Texas A&M University. ‘By March and April, expect an uptick. If not, Dallas may have a rough 2007.’”
“At the end of December, 41,598 pre-owned single-family homes were on the market in North Texas, 9 percent more than a year earlier.”
The Austin Business Journal. “Ken Simonson, chief economist with the Associated General Contractors of America, warns that in Austin, which is still in the throes of a condo project boom, some of the for-sale units being built will eventually end up being offered as rental units. ‘I do expect some increase in rental construction and conversion,’ he says.”
“Nationwide, Simonson says there has been a falloff in investor interest in single-family homes and condo units. ‘Those buyers have all but disappeared to a great extent and a lot of projects are hanging out there unsold,’ he says.”
The Express News. “San Antonio real estate had a jaw-dropping year in 2006, with San Antonio builders starting more homes than there are residents in Alamo Heights, Boerne, Castroville and Lytle combined. Builders started 19,092 new single-family homes, 15 percent more than in 2005, according to Metrostudy.”
“It marked the sixth consecutive year of record-breaking building. The exuberant building pace and shocking statistics are unlikely to make repeat appearances this year, however. San Antonio housing has seen a significant shift, and the market for new and existing homes isn’t as strong as it was at this time last year, said Jack Inselmann, a new-housing analyst with Metrostudy.”
“Home-buyer traffic has slowed in new neighborhoods and builders are having a harder time closing sales, a change many builders started noticing during the summer. ‘The housing bubble has burst, right?’ Inselmann said. ‘All is lost, right? Absolutely not.’”
“Out-of-town investors created an artificial market when they made down payments on homes and then canceled their contracts when they figured out they would be able to flip a property for a double-digit gain. ‘It’s probably the worst thing that affected our market this year,’ Inselmann said. ‘I think we’ve gotten most of those people out of here.’”
“San Antonio real estate has been on an upward trend since 1990, when builders started just 2,000 homes. ‘This market is on a 17-year run,’ Inselmann said. ‘Ladies and gentlemen, it can’t go on forever. We came close to making an error in our housing market.’”
‘In Dallas County, foreclosure postings are up 24 percent. In Tarrant County, they are up 17 percent. Denton County came up 15 percent and in Collin County they are up 61 percent over this time last year. Foreclosure postings list more than 3,500 Dallas/Fort Worth area houses this month.’
‘If payments have just gone up recently due to taxes or adjustable rate mortgages, they have no way out,’ said Bankruptcy attorney William E. Sallows. Sallows also blames overbuilding by developers, which make existing homes in new subdivisions harder to sell.’
‘Real estate experts said home building in 2007 will drop 10-15% from 2006. They said it is a result of San Antonio being highly-rated as a housing market. ‘It brought all these investors in trying to buy up houses, and run up prices buying houses, try to flip them after completion,’ Jack Inselmann with Metro Study said.’
‘Inselmann said getting the investors out of the market should help it get back in line with reality. But, the home appreciation rates are expected to go down, Inselmann said. Two years ago, homeowners saw a rate of 10%.;
I swear just a year ago, they were telling us Texas was different. Certainly two years ago, they were telling us Texas was very different. Obviously, when you have a huge boom/bust history, it behooves you to come up with new fanciful reasons why it won’t happen again.
That’s why TEXAS is no different than other markets. The whole structure is imploding.
SUBPRIME LENDERS GONE TOO FAR
A Time Bomb Waiting to Explode
by Michael Dawson
TheTimeAndMoneyGroup.com
January 12, 2007
Remember when a 20% down payment was expected when purchasing a house. Sometimes with stellar credit and maybe a special situation, like a first-time home buyer, you could get in with a 10% down payment. I recall a few weeks after my wife and I purchased our first home - both cars broke down. Saving for your first home is one of the few times, from a financial perspective, that both husband and wife are clearly on the same page. Everything takes a back seat to saving for that down payment - shoe shopping, night out with the boys, everything. That’s exactly why both of our cars broke down. We had neglected maintaining the cars and everything else while saving for our down payment.
Obviously once a homeowner, whatever is necessary to keep the house - like making timely mortgage payments will be a priority. After all, significant sacrifices were made and no one would want to lose the home foolishly. So, the bankers have us where they want us. Committed customers who pay their obligations for the most part on time.
Well the greedy little bankers knew that they were missing out on a large opportunity with such tight restrictions. There is a large pool of people who do not have good credit, a secure job or money for a down payment. The bank’s bottom line could be significantly increased by loosen their lending requirements. After all, real estate is an appreciating asset. So, even if the number of foreclosures increase the bank would would still make good by selling the house.
Does the above sound like an exaggeration? It is and it isn’t. Banks have always loaned to people without pristine credit histories. However the marketing of such loans, known as subprime loans, increased significantly around in the mid-90s. According to the Mortgage Bankers Association, subprime loans represented 14% of the total mortgage market by 2003. In the period 1994 to 2003, subprime loan growth significantly outpaced prime loan growth with a 25% rate of growth according to a report in USA Today (Subprime loan market grows despite troubles, December, 2004). These loans helped drive US home ownership to its all-time peak in the fourth quarter of 2004.
Well guess what - the chickens are coming home to roost. By late in 2006, the rate of subprime loan delinquencies of over 60 days was up to nearly 8% according to UBS. The Center for Responsible Lending (CRL) projects that nearly 20% of subprime loans made in the period 2005 to 2006 will fail. The New York Times stated that “about 2.2 million borrowers who took out sub-prime loans from 1998 to 2006 are likely to lose their homes”. One of my favorite commentators, Peter Schiff, believes the the NY Times estimate are too optimistic. He says:
“The secondary effects of the “1 out of 5” sub-prime default rate will be a chain reaction of rising interest rates and falling home prices engendering still more defaults, with the added foreclosures causing the cycle to repeat. In my opinion, when the cycle is fully played out we are more likely to see an 80% default rate rather than 20%”.
I knew that there were some crazy loan products available, but check this out:
“The sub-prime market was designed with a built-in time bomb. In testimony to the Senate Banking Committee in September, Michael Calhoun, the President of the Center for Responsible Lending (CRL), showed an example of the most typical sub-prime loan, known as a 2/28, with an “exploding ARM” (adjustable rate mortgage). Buyers can qualify for this type of loan if the original (”teaser”) monthly payment is not higher than 61% of their after-tax income. At the end of two years, even without a rise in interest rates, the payment will typically rise to 96% of the purchaser’s monthly income. No wonder then, that the study conservatively forecasts that one-third of families who received a sub-prime loan in 2005 and 2006 will ultimately lose their homes!”
What a joke - 96% of your income will go to servicing your mortgage. I hope that Johnny doesn’t need a new pair of shoes. These mortgages were designed to be refinanced assuming that homes continued appreciating. That ain’t happening now.
So, what does this mean to the average homeowner? I will let Mr. Schiff explain, “failures in the sub-prime loan market will put greater downward pressure on housing by increasing inventory and lowering prices.” In other words, the value of your house is going down and its not stopping for awhile.
To prevent this article form being a complete downer think of it this way. Your home is your domain your castle - it was not purchased as an investment. It was purchased for shelter and enjoyment. Any appreciation gained from selling it is an added bonus. Hey, I tried to end it on an upbeat
Look at this clown’s price cuts:
http://tinyurl.com/y2yjm7
If the link doesn’t work correctly, look up MLS 10401053 on ziprealty to see the 7 price reductions and 2 price increases since Nov 2005. All that to come down a whopping $5K. I love the $100 price reductions. LOL
?“Home buyers should continue to see lots of incentives as they shop for new homes, Wilson said. ‘It’s tough right now. A lot of builders are not making a lot of money,’
Read that line VERY carefully. Uh, sure they are not making a LOT of money. And we are supposed to feel sorry for them? Not!
(I’m REALLY looking forward to TXchick’s posts on this topic.
Let ‘er rip T-chick!)
BayQT~
“San Antonio real estate had a jaw-dropping year in 2006, with San Antonio builders starting more homes than there are residents in Alamo Heights, Boerne, Castroville and Lytle combined. Builders started 19,092 new single-family homes, 15 percent more than in 2005, according to Metrostudy.”
I’m still debating: Should I buy that “fire sale” home in San Antonio when it crashes completely or, wait for Austin/Round Rock to catch up. Oh decisions, decisions!
BTW TxChick the TX state legislature all of a sudden says that they WON’T be able to cut property taxes as planned. Why am I not shocked?
got an update on Portland ?
hoganhomesinc.com
trying to stall an inlaw that’s hot to buy
The only update I have is that prices in Corpus/Portland are stagnant or dropping. Dropping slowly but dropping nonetheless.
As for Hogan Homes they are shoddy builders and have poor, poor customer service. My buddy’s house was 5 months late closing, the bulding supervisor was an ex-Navy pilot without a day of building experience and the fixes after the close took over 6 months. BTW, his yard still floods when it rains even though it was “fixed” 4 times and the walls of his house are “bowed” out. All this for only $223K. The shame is he’d be lucky to get $200K for it now.
whoa- thank you
they have a $ 500 deposit
I told her to play along till the spring and only accept a finished home- so far they’re offering upgrade but no price cuts….
Tell her to wait. If they’re renting and it’s not killing them then, why buy now?
Hey, my new slogan in response to the NAR’s new slogan is: WHY BUY NOW? ™
WHY BUY NOW? ™
As Daffy Duck once said: “Mine, mine, all mine!”
Hogan makes some FUGLY homes. They have ~20 floorplans but it’s all the same house — garage with attached home.
The TX legislature is caught between a rock and a hard place. In the meantime, people like me who pay no property taxes and make big ticket purchases online w/out of state retailers, thus also avoiding TX sales taxes come out ahead.
So I’m not the only one doing this!
I’m buying a car out of state very shortly. I’d rather pay another state’s sales taxes than give those thieving clowns in Austin a dime of my money.
You mean to say you don’t get hit with TX tax upon registering the car in TX? Do you have some way to register the car out-of-state? In most places I’ve lived car sales tax is computed based on where the car is registered. In some cases this goes down to the county/local level when there is local sales tax.
That happened to someone I know with a watercraft. Bought it in Oklahoma and got a sales tax bill in Texas about six months after registering it.
Yep, I’ll register it out of state.
Dallas County hits you with a property tax on your car. Since 1989, I’ve maintained a PO box in a county south of Dallas to avoid that.
If you have a TX driver’s license I hope you have your story all made up in case you get in an accident or pulled over.
I do. I did this in California too. No problem.
It used to be very common for people to drive in Texas using out of state plates, especially if the thing wouldn’t pass inspection. About the only way it can be stopped is if the other state cracks down, like Colorado did. It’s tricky holding two drivers lic’s, but it can be done.
That’s why I get all of my sh*t registered on the Moon. The taxes and inspection requirements are very low there.
Regarding Colorado, the other attraction is it doesn’t count out-of-state speeding tickets. Neither does PA, in case this matters to you.
I keep my ticket lawyer very busy
All of us are suspicious of the state and local govts where we live. My business is indeed in AZ, and that’s my major income source, but how many weeks a year do I spend in my so-called primary residence (a trailer near Phoenix)? Not too d**n many.
My car is registered in AZ, and I try to make sure that my time in any calendar year is split up w/ fewer than 180 days in CA and fewer than 180 days in Maine. AZ income tax is not ZERO like TX, but a far sight less obnoxious than ME or CA.
As soon as pressboardbox tells me how to register extraterrestrially, I’ll register on Mars, which is slightly more terraformable than the Moon.
This gives me an idea. There are tax havens… what we need are “car havens”. Some Carribean or South Pacific island nation needs to get into this business.
Yes but the commute is terrable.
NR
I drove with expired Michigan plates in Texas for almost 3 years when I was going to college.
whenever i try to save money with shortcuts…i lose more in the long run. i just pay it.
Property taxes go up pretty much every year in Texas. There are multiple entities wanting their cut.
These guys have been building like mad in central Texas for well over a decade. And be aware of the poor soil where there isn’t bedrock. Lots of foundation lawsuits.
“And be aware of the poor soil where there isn’t bedrock. Lots of foundation lawsuits.”
I think portions of the central valley will see these lawsuits as well. Expanive soils. When I see how sloppy the exterior work is on these bubble homes, I have little faith that the foundations are much better.
Soil is NOT a problem in River Chase; just north of SA. When I was touring the area last summer I went by new construction going in the development. They had a HUGE jackhammer beating a hole in the rock to install a septic system. I couldn’t resist so…peeking in the hole, it’s all limestone covered by an inch of something they call topsoil.
It’s a shame how patches of grass ruin the bare rock yard…..
What a disappoint that development was……NO CC&R’s, lousy topography, and more “flip lots” than houses.
On the topic of taxes….
I’ve gotten into it with a few relitters who push the new tax cap in TX. That is NOT true. While Austin did give some relief from spiraling rates, they slid a loophole in place where local agencies can raise their rates, WITHOUT a referendum, to meet budget needs. The Dallas paper had one headline about the “relief” and another about a Fort Worth School District taking advantage of the opportunity. So much for reform. Property taxes average about 3% per year so a $300k house will hit the wallet for about $9k.
My two cents worth…
I i had a choice of paying $ to government or setting it on fire I would set it on fire every time.
Govt only uses the money to get more money out of you also there is just way way to much of this so called $ out there - destroying it would help a lot of things.
And that’s what will happen.
This kindas reminds me when I lived near Chicago about ten years ago. The City of Chicago computers was issuing parking tickets to Cook County registered vehicles randomly. When the “delinquent citation holders” didn’t pay up or show up in court then they would get Denver booted, and the municipal judges would then assess punishing late fees and interest. Finally, (after many years) the MSM started reporting that cars that where known to be in body shops or mechanics shops during these “infractions” proved that the COC was using the municipal courts for bogus “revenue enhancement.”
Look for more of these big cities to be generating bogus “revenue enhancements” as they lower their tax assessments on houses.
“San Antonio real estate had a jaw-dropping year in 2006, with San Antonio builders starting more homes than there are residents in Alamo Heights, Boerne, Castroville and Lytle combined. Builders started 19,092 new single-family homes, 15 percent more than in 2005, according to Metrostudy.”
What builder needs residential buyers when he has flippers buying ten homes apiece?
They are going to compete with the resale market.
More like the REO market
Here is what looks to be shaping up in the San Antonio area. Many speculators specifically sought new homes, so there wouldn’t be high maintenance. Only problem is, your crazy to buy new homes to rent, IMO, and I doubt the rents will cover the loan, taxes, etc. We’ve already heard that rents are falling due to the oversupply.
So in a year or two after purchase, these folks will realize that the homes are depreciating, not the other way around, and that taxes can be as high as 3%, they will put these places on the market. Only there won’t be any GF specuvestors left. Uh-ohh…….
I contend that the builders knew that a huge % of their sales would be to investors with the help of builder realtionships with their special sub-prime lenders ,( otherwise we would not have ghost town tracts with 4sale signs everywhere ).
Now that the market changed and investors are competition to the builders and they have to undercut them .
Remember the Alamo.
“Out-of-town investors created an artificial market when they made down payments on homes and then canceled their contracts when they figured out they would be able to flip a property for a double-digit gain. ‘It’s probably the worst thing that affected our market this year,’ Inselmann said. ‘I think we’ve gotten most of those people out of here.’”
The worst thing, how about the only thing. And yes you did get most of those people out of there, they were called buyers.
Yep, that’s good you got most of them out already so you can keep your artificially high prices stable for the spring offensive.
Geez. Must be a great time to buy! First 200 idiots get a free 42″ Plasma!
“Out-of-town investors created an artificial market…”
Good thing Texas is the only state suffering from this. LOL.
Blah blah blah. All been said dozens of time already.
I had a call from an acquaintance yesterday wondering if I was interested in “helping” with his bankruptcy caseload. It apparently is overwhelming. Why am I not suprised.
Yeah, after vowing on this board that I was no longer in the lending business, I agreed this morning to make a loan. It’s not connected with a transaction, though. Some people wholly own a lot and small mobile in an RV park that has a nice pool, library, ballroom, laundromat etc. Likely asking price $80000, likely selling price $55000. This borrower is in deep doodoo with credit cards. I said I’d lend $40K to solve the problem. Yawn, I apologize for prolonging the credit bubble, but at least I am not really propping up the home prices.
Please accept. I look forward to the stories.
maybe we should lock up the texas legislators and florida legislators in a room until they come out with a logical plan…
feed them only granola bars and water until they do so…
One thing I do on the side for a friend who is running for office is legislative research and analysis (Texas). If you could read some of the crap bills that get introduced down there, you’d LOL. I used to wonder why the really smart people who might be able to make a difference never run for office and we keep getting the same old retreads. I no longer wonder after spending a few months working on the campaign which also included some city of Dallas stuff. I wouldn’t run for office for any money. You’d go mad dealing with the special interests.
Answer? Term limits. Not enough time to build fiefdoms. No fiefdoms, no extended power. No extended power, not much value to “special interests”.
LOL, you should sit in on a Dallas School Board meeting sometime. You’d come out ready to shoot the first person you encountered.
my limited experience with “public service” led me to the same conclusion, I still feel guily though, we should all pay more attention to the local legislators because it is the feeder for state/national, but it is so hard to keep with them. my own cynical view is that anyone who actually wants to get anything done gives up dealing with those guys.
The good news out today is that Rep. Ron Paul of Tx is throwing his hat in the ring for president. Not that a libertarian has a chance but it is nice to see someone run who believes we should comply with the constitution.
I’ll never understand the slavish worship of that guy. I remember him back in the bad old days in Houston.
I don’t know him from the Houston days. I only know what he writes and says. I can’t say I know what he does.
Nonetheless, he says that inflation is a result of the increase in the stock of money, either fiat money, credit money, or money substitutes. I agree.
He states that our current banking system is unconstitutional, and wants to return to the principles written in the constitution. I agree.
He states that inflation is extremely dangerous, and confiscates wealth for many in a stealth tax. I agree.
There are many other issues when it comes to politics, but without inflation, this blog wouldn’t exist. Education of the masses on how our financial system works is a critical step in returning to principles that foster liberty. He may have many other fallacious thoughts on other issues, but he is correct on this critically important one, subjectively speaking of course.
Kinky is the answer…….
http://www.kinkyfriedman.com/
Unless they changed things since I lived in Houston, the Legislature only meets for 90 days every other year. Seems like it might be a good thing, but as a member of a special interest group that did business there, you only needed to kill the bill for 90 days and it was gone for 2 years (absent a special session).
Seems that many of the legislators in Texas who are law school graduates have attended stellar institutions such as St. Mary’s, South Texas school of law and Thurgood Marshall. So the fact that they averaged 147 on the LSAT may have something to do with their law making prowess.
LOL. Believe it or not, the highest bar exam scores year after year come not from UT Law school but Baylor. South TX law school isn’t that bad, probably better than U of Houston. You’ve got a big dropoff though after UT.
The highest pass rate (lately) is Texas Tech but if I was going to law school, I’d kill to get into UT just because of the cache (and the cash).
51 South Texas Col. of Law
3.03 3.49 151 156 30.7% N/A N/A 81.6% TX 72.9% 80% -7.1%
52 Southern Methodist Univ.
3.32 3.84 156 164 15.3% 15.7 N/A 93.5% TX 90.7% 80% +10.7%
53 St. Mary’s University
2.78 3.4 152 156 31.6% N/A N/A 74.5% TX 71.4% 80% -8.6%
54 Texas Southern University
2.66 3.23 142 147 24.4% N/A N/A 86.1% TX 48.9% 80% -31.1%
55 Texas Tech University
3.33 3.78 150 157 32.5% N/A 85.8% 92.6% TX 85.5% 80% +5.5%
56 Texas Wesleyan University
2.88 3.43 151 157 31.9% N/A 29.1% 83.6% TX 76.4% 80% -3.6%
60 U. of Houston
3.3 3.7 158 161 22.7% 23.3 78.3% 94.3% TX 87.7% 80% +7.7%
62 U. of Texas-Austin
3.4 3.79 162 167 15.7% 17.1 94.5% 99.2% TX 92.6% 80%
78 Baylor University
3.51 3.92 161 165 21.3% 16.9 67.4% 97.8% TX 91.4% 79% +12.4%
‘This market is on a 17-year run,’ Inselmann said. ‘Ladies and gentlemen, it can’t go on forever. We came close to making an error in our housing market.’
What are the chances that a dispersed group of builders are going to stop just in time after a 17 year run, especially when it was capped off with a two year+ boom of California specu-dollars?
They’ll stop if the banks jerk the reins in. They’re undercapitalized.
Wait, a Texas bank behaving prudently. I don’t think its in the bylaws.
No. It was only the savings and loans. Banks NEVER do such imprudent things, especially in Texas!
Hmmmm, that’s how long the secular bull market in US stocks lasted, 1982-99.
“…then canceled their contracts when they figured out they would be able to flip a property for a double-digit gain.”
I presume that’s a misprint. Why cancel if you’re going to make a double-digit gain?
pretty sure they meant “figured out they would NOT be able to flip”
Double digit gains in Texas? LOL
Don’t they know that we are still making land here? Millions of acres of farms and ranches are ready to be turned into millions of stucco boxes. Why would anyone pay more money for an old house when they can buy a brand new one for 25% less?
No bubble in Dallas. Just slavish worship in the Morning Snooze this a.m. for a 500K (per DCAD tax records) new build by a 28 year old and 30 year old. Nice place but get real.
http://www.dallasnews.com/sharedcontent/dws/fea/lifetravel/stories/DN-nhg_jackson_0112liv.ART.State.Edition1.2350388.html
BTW, I’d tell that couple to stay away from Mt. Hood. The last couple whose house was worshiped in this manner in the Morning Snooze was that of Kelly James, one of the Mt. Hood climbers who died.
You know, I have a little free time every day. I think I’ll screw that up and install a stainless steel backsplash like these idiots did. Amazing what else this couple found they “cannot live without” - overindulgent overprivileded mindset that I CAN live without.
“But he warns that even in Austin, which is still in the throes of a condo project boom, some of the for-sale units being built will eventually end up being offered as rental units.”
It’s amazing right now in Austin, there are condos going up everywhere in the central area. I swear we are beginning to look like Miami. One place I know about is asking $250K for a studio. You can buy a 4-bdrm nice house for that. The developers are also building on previously undesirable lots willing to put all kinds of money into grading, waterlines, etc…. just to get he project done. I can’t imagine that these projects would be profitable based on the construction costs - but hey what do I know.
Right now, Austin is the late comer to this party. I guess we’ll hit hangover stage in 2008.
Austin is a like a small cap stock with all the big cap money jumping in because some analyst on CNBC recommended it when they announced a new plan involving internet/fuel cell/terrorism/defense/social web/mobile web/anthrax/ethanol/bird flu/stint/cancer drug/impotence pill
so you’re saying it’s the Vivus (NASD: VVUS) of Texas RE? ;0
My friend sold his 2/1 condo in the Railyard on 4th for $300K in ‘04. Bought it for $89K in ‘99.
There are tons of condos being built waaaaay out in the burbs…specifically on Brodie around Slaughter. Why would you buy a condo there when you can get a nice 2500 sq ft on a 1/2 acre lot for the same price?
Mayor Will Wynn spoke at a lunch at my office 6 months ago. He said his goal was 25K living downtown. I asked him if he had plans for 25K new jobs downtown or would we just have reverse commuting. He said “bring in the residents and the jobs will come to them”. Almost laughed out loud.
Downtown? The place is a ghost town after dark. The Riverwalk is ok if you like cheesy places to eat/drink.
I lived in the Railyard for a summer once back in the day. It was fun but would get old in a hurry I would think.
My ex-gf lived there. She would constantly get woken up at 2:00 am when the drunks came home. The walls to the outside were extremely thin.
Well it’s the same thing in Montréal.
It’s…… ?
WORLDWIDE CONDOMANIA.
At least the population will decrease.
Looks like the developers in Austin are getting good and ready for a massive IPO (Initial Public Offering) of condors condos in the central area soon.
They might find the sale of these things to be somewhat “fleeting.”
condorsHow come I do not read many reports on Texas realty here?
Anyone who can share insights about El Paso real estate market.
Is there a part of el paso that is not a barrio? whata crazy place.
El Paso and the 500 sq miles surrounding it was parceled off into specuvestor pieces with questionable access and no services or districts then sold on ebay and in classified ads to the greatest and dumbest of fools. Since no developer would EVER be able to cobble together the land for major building. El Paso will remain nothing forever. Or until Mexico annexes and declares null and void all land claims. I exaggerate. But not much.
Racist “barrio” comments aside, El Paso RE is increasing in value. I don’t know how long this will last. Here are the pros and cons.
Prices are driven by military growth, immigration and a booming economy. The military is transfering 40k troops from the southeast. However, several thousand are being moved out to Arizona, I think. So the total number should not be as high. Having said that, any large military increase brings people with ready-made salaries to the area who needs services. They demand services without taking existing jobs. So even a small increase is good.
Fortunately, or unfortunately, there are many retired Californians moving here. They see this area as a cheap sunbelt city. Again, they bring income without taking jobs. Also, wealthier mexican citizens who have dual nationality are preferring to live on the American side because crossing the bridge to the US takes too long. They are buying on the West side generally. Particularly because Juarez RE is more expensive than that in El Paso.
The economy is booming. You can see that buy the ubiquitous hiring signs. Also Nafta is bringing a lot of American factories to Juarez. Electrolux just moved, etc.. Many of their execs work in Juarez, but want their families raised in America, so they buy in El Paso.
There is pressure on property prices. However, it’s hard to say that prices will boom like in Tucson, or other bubble areas. The primary boom is due to military personnel who cannot afford exhorbitant prices. And, although jobs are booming, it is primarily in the low wage area. So massive price increases without liar loans are unlikely.
My take on El Paso is that it is still a good investment market is you want to buy and rent. However, if you want to flip it’s a big gamble. If you want to hold off and buy cheap, you might have to wait a while as well.
Prices have really not boomed here. There was an increase in late 2005, but it was about 20% from extremely low home prices. As long as the economy remains strong, and judging by the amount of American companies exporting jobs to Mexico, it is likely to remain so, I’d say prices should increase slightly then plateau.
However, if interest rates spike, all bets are off. The good thing is that RE never really boomed in El Paso so the crash should not be too hard. I hope this helps.
So you’re saying its different in El Paso. Got it.
Hey, If you’d like to debate this, say when!
debate what?
That’s what I thought; all mouth an no teeth. The problem with some people on this blog is that if you don’t tow the party line you wrong by default. The housing bubble didn’t affect every single town and city in this country, belive it or not. So do your homework before you open your mouth.
How come I do not read many reports on Texas realty here?
Anyone who can share insights about El Paso real estate market.
How come I do not read many reports on Texas realty here?
Anyone who can share insights about El Paso real estate market.
Jerry, Is it true you do not read many reports on Texas?
Attention Mr. Yang: Put down the Red Bull(s) and step away from the keyboard! -
OT: I hope this link works for you. A big Sacramento project is running into trouble. Should come as no surprise to people here, but very interesting.
http://www.sacbee.com/245/story/106755.html
Last time I was in El Paso I loved the houses I saw on the other side of the river. The walls were stacked used tires filled with dirt, the roofs were tiled with old car hoods. It seemed like the newer houses with the 60s Chevy Impala hood roof would seal better than the older houses with the 50s more rounded hoods. No sewers but the Rio Grande was right there. AND no fence or wall, as a local said” we need our workers to be able to get to work”
I will bet these houses will out last the junk they are making today
Ciudad Juarez is filled with 4 million peasants crapping into the Rio Grande and slaving in the sweatshops. At least El Paso has an endless supply of cheap janitors and maids.
I’m always amazed at the amount of racists on this blog. I guess anonymity steels your hearts. You brave fellows.
Ben: do you remember the M Streets area, between Mockingbird and Ross Avenue?
Here’s an example of the housing bubble gone mad. This place is a spec home built on Belmont Ave., which is that shitty little street full of junky old houses which bisects Skillman and Abrams and runs alongside the Whole Foods on Greenville. For eternity, nothing in that area EVER sold or tried to sell for more than about 350K on the very high end. Now, these clowns tear down the junky houses and expect people to pay 700K plus in that area, on Belmont, just mindboggling.
http://dallasmls.mcknight.com/featured.php?listnum=10676034&proptype=res
and the last word. It’s all good in Dallas . . . .
http://dallas.craigslist.org/rfs/261618166.html
Hey…..we can’t get to the ad before they yank it…..can you cut and paste to your comment so we don’t miss all the good stuff?
“2006 PRAIRIE STYLE HOME ON OVERSIZED LOT.”
“Lot Size: Less Than .5 Acre (not Zero)”
It is always good to know the oversized lot is “not zero”.
BUILT FOR TODAYS LIFESTYLE WITH A PRAIRIEBOX-AMERICAN FOUR-SQUARE FLAVOR.
Square box flavors making a comeback! 3600 sq ft, 60 feet on each side.
Thank you for some insights (though depressing) about El Paso. Really, any expert insights about El Paso housing. I got a permanent job here at El Paso, so I will stick around a couple of years. Want to buy a house, but the appreciation of last few years is about 50%. Should I wait till the housing market goes down?
I’ve heard these comments that El Paso RE has appreciated 50% over the last couple of years, but I don’t believe it. It is true that prices are higher and there are stats to show the increase is 50%.
However, almost all new construction is for housing in the 150-250k range. Most exisiting homes are in the 70-90k range. The massive new construction gives the impression that houses are appreciating more than they are. The overall market average has risen more than the individual home prices because more expensive homes are being built.
Just my two cents.
thank you for the insights, not racist remarks.