“The Air Is Coming Out Of The Bubble” In Texas
The Dallas News reports from Texas. “Homebuilders hit the brakes in the first quarter, cutting Dallas-Fort Worth starts almost 35 percent. Local housing production totaled less than 8,000 single-family units, the lowest quarterly total since 2001, according to a report released Monday by Metrostudy Inc.”
“And sales of both new and pre-owned homes fell in the quarter. Pre-owned home sales dropped 5 percent, while purchases of new houses were down 7 percent from a year ago.”
“Inventories of homes for sale have been rising, forcing builders to cut prices and curtail starts. Because of the cutback in building, the number of homes in the production pipeline, both under construction and completed, fell to 26,466 units, according to Metrostudy.”
“That’s down from a recent high of 30,117 homes at midyear 2006. Builders sold 9,917 homes in the first three months of 2007.”
“‘We’ve seen demand for new homes slow down a bit,’ Metrostudies David Brown said. ‘We’ve seen less investor activity, and with the subprime loan market tightening up, we’ve had some purchase cancellations.’”
“There were 11 percent more pre-owned homes on the market in March than a year earlier, with more than 47,000 houses listed for sale in North Texas. That works out to about a 7 ½ -month supply.”
“Dallas appraiser Chuck Dannis said that the pullback in builder starts was a couple of quarters late and that home inventories are high. Near-record foreclosures have added to a glut of homes in some areas. ‘The market needs the rest of 2007 to digest the foreclosures caused by loans that probably should not have been made in the first place,’ Mr. Dannis said.”
“The owners of an Oak Lawn high-rise condominium have decided to auction off more than a dozen of the luxury residential units.”
“The rental units were converted into condominiums and have sold for more than $500,000 to almost $3 million. Five of the units will be sold without a minimum bid. The auctioneer is suggesting that opening bids for the high- rise properties start between $250,000 and $500,000 for the condominiums, which range from 1,362 square feet to 5,164 square feet.”
“‘We want to sell the building out,’ said Steve Levin, president of Centennial Real Estate.”
“Dallas housing analyst Mike Puls said the planned auction is a sign that the high-rise condo market has softened. ‘The air is coming out the bubble,’ Mr. Puls said.”
“Foreclosure signs are popping up in front of thousands of Dallas-Fort Worth homes for sale this spring.”
“‘I’m finding more of them when I look at the listings in a neighborhood for comparable prices,’ said Carrollton real estate agent Wendy Hulkowich. ‘The foreclosure market is definitely affecting our listing price comps.’”
“It’s no wonder that home foreclosures in North Texas are starting to weigh on the entire housing market. Dallas-Fort Worth has one of the highest home foreclosure volumes of any area of the country. Last year, lenders foreclosed on more than 18,000 homes in the D-FW area, according to research by Foreclosure Listing Service Inc.”
“During the same period, about 38,000 single-family homes were listed for sale in the MLS. Currently, about 6 percent of the MLS listings in North Texas are identified as former foreclosures. But those numbers don’t include nearly all of the repossessed properties, agents say.”
“‘I think the price impact will start showing up this year,’ said James Gaines, an economist with Texas A&M University. ‘In subdivisions where foreclosures may run as high as 20 percent or more, we can anticipate not just a slowdown in price increases, but price declines and perhaps significant, greater than 5 percent, price declines.’”
“‘They are cutting prices, but so far not a lot,’ said Connie Zetterlund, a Dallas residential agent who specializes in sales of foreclosed homes. ‘But because of what is in the pipeline, I think we will be seeing some price cuts. When a neighborhood has so many foreclosures, they have to do something to sell the properties.’”
“‘They are hanging onto the properties longer,’” said Ms. Hulkowich. ‘They are overpriced.’”
“She estimates that the foreclosed homes she sees on the market have been discounted from 11 percent to 14 percent to start. But many of the houses need expensive repairs, Ms. Hulkowich said.”
The American Stateman from Texas. “The softening housing market around the country may be taking a toll on Central Texas. The number of home starts in the first quarter of 2007 dropped 28 percent compared with the same period a year ago.”
“Builders have become wary of starting homes in part because it’s more difficult for some buyers to qualify for mortgages, said Mark Sprague, (with) Residential Strategies’ Austin office. The tighter credit requirements are related to the shakeout in the so-called subprime market, he said.”
“And that shakeout has trickled into Austin, with more stringent lending rules, he said, especially among subprime lenders.”
“‘These challenges are primarily impacting builders in the first-time market, homes generally priced below $200,000,’ said Eldon Rude, director of the Austin office of real estate research firm Metrostudy.”
“The latest figures illustrate his point. Home starts in the $111,000-to-$150,000 range plummeted 51 percent in the first quarter, compared to a year ago. And starts for homes priced from $151,000 to $200,000 were down 35 percent.”
“With the subprime situation having the greatest impact on first-time buyers, many builders are putting lots back on the market, mainly in lower-priced subdivisions, said Dick Rathgeber, an Austin developer with residential projects in all price ranges.”
“But Rathgeber said national builders are ‘overreacting in Austin.’”
Now, Ben, you know there is no bubble in Dallas. Property is dirt cheap and the locals are rubes who are just ripe for the picking by the more erudite “investors” from California and New York. Enough of this blasphemy.
Tx why is it that homes built in Texas have such a reputation for being so poorly constructed? From what I understand and this is not meant to attack in any way the state of Texas, but from what I understand the homes built in Texas are much, much worse than those constructed in Florida.
Is there any truth to that or was I mislead and if true, why do you think that is the case? Thanks in advance
Hahahah. You’re setting me up, right?
Cause the market for newer houses in TX is for size, not quality. People here care only about the outward appearance of something; i.e., if you can’t see it, it’s not there (until it breaks that is).
They build some of the most incredible spit and baling wire garbage on the planet in Texas suburbs and if these junkers are big enough, they charge a hell of lot for them.
Here’s the typical NY or Californian’s mental picture of Texans (on the left):
http://dallas.craigslist.org/com/309408476.html
Thank you Tx, I was just surprised when I heard about how Texas construction was much worse than in Florida because frankly Florida is not known for its quality construction. Yes there are codes to follow for hurricanes, but again we are not known for our quality construction. It is too bad that is the case in Texas, buyers must go through hell with warranty problems and the aftermath of poor quality construction.
Only if the empty hand was holding a beer.
When I lived in Irving 2000-2005 I was amazed at what looked like huge houses with particle board siding. A colleague mine had a spouse in the construction business — the storied she told me scared me out of the housing market right quick (I did look briefly around 2002).
Another problem was the fact that my job takes me away from home for long stretches in the summer. You cannot do that in Dallas; with these new homes you have to “water” your house regularly. If you don’t, your foundation will crack. I wonder how many out-of-state investors have taken care of that little detail.
Particle board siding? You are way behind the times. These days you use plywood for the corners and foam core for the rest. The siding is then placed right on top of the foam. Don’t tell the thieves that all they need to break into most of this crap is a utility knife.
Do you really mean particle board? Not OSB (Oriented Strand Board)? A house with particle board siding would collapse in a 4.0 earthquake or if it rained before they put stucco on. Plus you would collapse from formaldehyde exposure from living in it….
Foundations are simply slabs of concrete, poured without any thicker “footers” around the perimeter. The only thing that holds the house in place on the lot is the plumbing pipes coming up through the slab. Also the “mexican brick” they use is not fully fired and will actually absorb water, as demonstrated by a kid’s science fair project I saw while we were living there.
If construction is that flimsy, I would imagine Air Conditioning costs in the summer, and heating costs in the winter would be astronomical(?)
“but from what I understand the homes built in Texas are much, much worse than those constructed in Florida.”
All of Florida is subject to hurricanes which clean out the worse constructed homes, most of Texas has to wait for the much smaller tornadoes to do that job.
Texas soil is also horrible for the foundation. Expect foundation problems even if water it in the summer. Anything built since the 1990’s has been horrible. The houses built before then are holding up better.
True, except for the bubble part.
Txchick, question for you.
I have a former co-worker who recently moved to Dallas and bought a house. She wanted a house more than anything else, and knew that she could swing it on a government salary in Dallas and couln’t in Northern VA.
She said she bought an ugly 2 bedroom (no curb appeal) with an added family room in an area/street that is in between two “good” neighborhoods. She also said that most people buying in her area are doing tear downs and building huge houses. She sees the neighborhood as being in an upswing so the house (I guess really the land under the house) will increase in value.
Want to venture an analysis of her analysis? Any idea of the area she is talking about? The office is downtown, so I assume she picked an area with a fairly easy commute.
I’d love to hear your take on it….
that’s gotta be somewhere in East Dallas/Lakewood area. If you could give me a street name or zip code, I could comment, but I’m sure it’s either that or some part of Oak Cliff.
txchick57,
My point all along is that the housing in DFW did not enjoy a run up over the past few years when compared with other parts of the country. (at least in Collin County) The Collin County schools are excellent and the job market strong, that coupled with the lack of run up in prices will mean that DFW will not be affected as severely as CA. Two years ago we paid $82 a square foot for our DFW home with a pool and a 3 car garage. We sold our home in CA for $272 a square foot with a pool and a 2 car garage.
The basic entry level homes will be pressed this year due to the large amount of inventory that the builders have put into the market over the past 2 years. But we are glad to be here and not in Southern California.
Now if you think that the parts inside of the 635 or the Parks section north of Downtown Dallas have had a large run up – well that is different then saying all of DFW is in a bubble state. You have to have an increase in price to produce a bubble.
Again, the loans my company have funded are about 85% full doc, the same as 2 years ago (DFW)
In CA we were running 50% full doc two years ago.
You weren’t here in 1990. Collin County was a toxic waste dump. If there is a sufficient recession, it will be again. Appreciation there is a pipe dream and the banrkuptcies per capita are among the highest in the country, because people there care only about appearances, all hat and no cattle.
I’m glad you like it there. Good luck trying to get your money out if you ever need to. And as far as those good schools go, google “Plano, high school, heroin, suicide” and get back to me.
txchick57,
Well the house we paid 30% less then the what the orginal owners paid in 1999 - that was during the last run up in Central Collin County. We are not counting on appreciation. I would not mind seeing them stay flat.
I know someone who graduated from high school in Plano whom I would consider functionally illiterate. She knows absolutely nothing about anything other than her occupation, which is a moderately-skilled service occupation. So much for the “wonderful schools” there.
FWIW, in just about any high school a kid can cruise and do basically nothing and get a diploma. In some schools, if a kid is willing to work they can learn, but in some schools its impossible.
OK, Even if you have one of the greatest high schools ever - and unmotivated kid is not going excel. - That is up to the parents to motivate them. The schools job is to provide the opportunity for the child to excel if the child puts in the effort.
Again I am comparing the Schools in a community north of Plano in Collin County vs. the schools we left in Vista CA – no comparison. The schools here are head and shoulders above the CA schools we were dealing with…..
Hahaha. I am a product of a Plano school…30 years ago! Got out in 3rd grade…to move to Houston. DOH!
Austin got hit hard during the semiconductor massacre of 2001-2003. There were thousands of homes available. Now, there’s a housing bubble bursting such a short time afterwards. The first time it was the natives who got hurt now, it’s the specuvestor’s turn.
“The first time it was the natives who got hurt now, it’s the specuvestor’s turn. “
I wonder how many of the specuvestors were locals who got out of the “semiconductor massacre of 2001-2003” and jumped into a “safe” investment in Real Estate?
“But Rathgeber said national builders are ‘overreacting in Austin”
Here we go again…yet another person who thinks that the housing market in their town is unsinkable. I really like Austin, but folks like Rathberger need realize just how vulnerable Austin is right now to all the problems with the tech industry, similar to how Michigan and Ohio have been hard hit by the problems in the auto industry…I mean, Austin does not have a very diverse job market, and if tech bell-weather companies like Dell and AMD and Free Scale, etal start to see their sales slow, then things could turn really ugly.
Round Rock, Leander, Georgetown and north rims of Austin will feel the most hurt. In-town central Austin I believe has less techies because the commute up to Dell and the high-tech campuses has become longer and longer.
[Riding in a car for the first time]
Chance the Gardener: This is just like television, only you can see much further.
Doctor Allenby: This won’t hurt a bit.
[Sticks Chance with a needle]
Chance the Gardener: It did hurt.
DL: Growth (in sales) will return in the spring.
I can tell you first hand that builders who were starting to gain what little sales traction they could this spring, which was small, has more than been over run by the sales cancellations from sub-prime borrowers who can’t get approved any longer for mortgages.
Look out below!
I should have clarified that sales cancellations have been running extremely high again in percentage terms because of the tightening in lending. I do not work in the building industry, but know folks still employed at majors in the sector.
I’m surprised that the builders could even get a 1k deposit out of some of these buyers .
I won’t get into specifics, but the waves of cancellations in the pipeline hitting now and later (there is more to come) is I think overwhelming for morale at these builders when they have been struggling of late. The sales force puts together some sales of a period of a month and then it is all wiped out by cancellations.
This is going to be really ugly for prices in the very near future, expect more big markdowns from the builders in terms of pricing in their various communities where sub-primes have been active. I have to take off for the rest of the day, have fun everyone and if anyone has anymore front line info please share I will catch up later
It’s funny how many of these dopey experts now warn of all the foreclosures. Where were these putzes 2-3 years ago. F”"”" losers.
“With the subprime situation having the greatest impact on first-time buyers, many builders are putting lots back on the market, mainly in lower-priced subdivisions, said Dick Rathgeber, an Austin developer with residential projects in all price ranges.”
With debt dealers cutting back on these junky loans maybe a few first time buyers will save for a down payment. Bunch of losers derserve to be tossed out in the streets and rent at a homeless shelter.
What would really kill Austin is seeing a tightening in the zero down / zero move in loans. These loans, know as 80/20 loans are the bread and butter of the low end subdivisions. About 1/3 of our buyers pay less than 5% down.
There was an article a few days ago that indicated Citibank is limiting these loans to people with credit scores above 650. I expect other banks to follow. If these loans are tightened - then it’s really going to hurt. I am not sure if these people can be redirected to the FHA gift programs. But it would hurt either way.
“Bunch of losers derserve to be tossed out in the streets and rent at a homeless shelter.”
Hey, I am mad about the run up too, but I wish no evil upon anyone.
What you are doing is such bad Karma, it may well come back at you yet.
SKB
I know this is off topic, but if anyone wants to get a sense as to what today’s buyers/sellers are thinking (hint: they’re not) go to the Buying A Home board on thenest.com. This is a newlywed community website that is a spinoff of theknot.com.
What you will find is the absolute stupidity of this bubble. People with no money to put down having no problem accepting full asking price so long as the seller pays the closing cost. 24 year olds who are tired of renting and don’t want to wait to save a downpayment because they are afraid they will be priced out of the hot new area (yeah, they are still falling for that one). A realtor actually saying an 80/20 is “good.” Sellers getting “insulted” by offers at more than 5% off their wishing price. Other sellers sharing their tales of woe but insisting it is the market or the impoverished, deadbeat buyers and never their price.
Reading the posts there makes me want to vomit. It’s not just the prices that are out of whack in real estate, it’s the brain function of the market’s participants. UGGGHHHH.
Ten years ago, I could have read that crap. Not today.
“People think it must be fun to be a super genius, but they don’t realize how hard it is to put up with all the idiots in the world.”
Calvin & Hobbes
I’ve always said I wish I were ignorant, because I hear its bliss!
editorial content on “acquiring your first nest” at thenest.com:
Buying a home can be as scary (and, ultimately, almost as rewarding) as the day you said, “I do.”
Airsick bag, please.
What if your partner doesn’t want to buy? No problem:
…as with many hurdles in marriage, sometimes there’s no better way to inspire a reluctant partner than with a little role-playing.
What if your partner wants a smaller house than you do? No problem:
…see what you can really afford. If the bigger house is still an option, it’s probably the best investment — although it might mean eating out less or shrinking your shoe budget.
That is sooo 2005.
“Buying a home can be as scary (and, ultimately, almost as rewarding) as the day you said, “I do.”
If your spouse turns out to be a meth addict, I agree.
This is a newlywed community website…
…populated by little bride-girls, no doubt.
mad_tiger, I second your “Airsick bag, please”. Gag.
24 year olds who are tired of renting
This isn’t the first time I’ve heard the “tired of renting” phrase when used regarding 20-somethings. My friend’s daughter, a 20-something, is “tired of renting” and was looking for a house. I overheard a young woman on a cashier line stating she and BF were looking for a house because they were “tired of renting”. (Her occupation: she showed jewelry at craft fairs.)
When I was in my early 20s I was a renter. It never made me tired. It’s not like I was dead lifting 150 lbs then running a four minute mile or anything. Add to the Housing Bubble Lexicon:
“tired of renting”: a state induced by an extreme inferiority complex and feeling of failure at being a Bitter Renter. Often followed by the state of F@cked Buyerhood, which doesn’t last long before the Tired Renter-turned-F@cked Buyer enters the ranks of the Suddenly Foreclosed.
Yeah, but when all your 24-year-old friends and co-workers own a house, you get “tired of renting” pretty fast.
I have a guy I work with, he’s 24, computer tech support guy. He’s actually a pretty sharp guy. No degree, but spent 4 years in the Navy. Got out, he’s doing the Montgomery GI bill and working full time (GI bill gives you $1,000 a month if you’re going to school full-time). So, he’s got his act together.
He bought a house about a year or so ago, and he’s fixing it up (Older home, maybe $60k). About eight months ago, he tells me “in four or five years I want to buy my dream house”. I’m thinking — he’s going to be what? 28 or 29, and he’s talking about buying his “dream house”? WTF? He should be happy he’s not renting right now….
Well, things have taken a bit of a turn for him. He met a 19-year old girl with no marketable skills, got her pregnant, and she’s living in his house now. So I’m thinking the “dream house” may be on hold for a while….
I tried to read that site, but became nauseous and had to click away. Nothing like making what should be your most important financial decision based purely on emotion.
From thenest.com:
“Couple #1: Erica and Daniel”
“Location: Bakersfield, CA
Goal: To live in a 2-bedroom, 2-bathroom home in Bakersfield.
Typical cost: $375,000
5% down payment: $18,750
Monthly mortgage: $2370
Price to rent a similar home: $1,500 to $2,500 a month
Verdict: They bought a 2150-square foot home in Bakersfield!”
“Reasons Why:
Time Plan: Erica and Daniel plan to be in Bakersfield for at least 5 to 10 years if not longer. If they were only going to be there for a year or two renting would be a better a option because the costs of brokers, closing, moving and all of the other little things that add up would be more of a burden than a profit.”
“Location: They know the marketplace well, and know that there is a pretty stable employment base in their community. Bakersfield is 2 hours north of Los Angeles and is ranked the 10th fastest growing city in the nation. Sounds like a town where value will spike, not plummet. In fact their house has already appreciated about $50K!”
Next stop: foreclosure.com
Gawd, that site makes me wanna puke. Looks like the womens’ lib movement has offically reversed itself—we’re a nation of spa-visiting, vacuous “desperate” housewives who will spend their husbands into eternal debtorship.
If the woman is goodlooking enough, most men don’t mind. Many men don’t mind living with a beautiful pig. After a while, all the squaling wares thin. But debtorship is ok when it comes to necessity.
Looks go quickly, usually after the first kid.
I think this site is a hoot.
http://www.nomarriage.com
That site is HILARIOUS!
And to think that my father was attracted to my mother’s frugality. She was also attracted to his. (And, yes, I’ve inherited their frugal genes.)
That’s why you’re slim, not spending too much on food! (?)
OT - Speaking of spas, I noticed several spas suddenly sprouting up in the Chandler/Tempe/Mesa area of Phoenix since the beginning of the year. These are in addition to the various Massage-Envy franchises, and several Asian nail/waxing places. What is going on?
I mean, who can afford to pay $75 + tip for a massage? Or the spa facials, botox injections, manicures/pedicures, hair treatments, body waxing treatments? They are all a luxury item, in my opinion. A massage treatment can cost $75.00 – $120.00 depending on the duration. A facial can cost $125.00-$150.00. Hair treatment (coloring, shampooing, cutting, styling) can cost anywhere from $50.00-$200.00. Plus the use of all kinds of pressure tactics / lies used to get the client to purchase the Salon beauty products being offered for sale.
I happened to try one of these spas for the first time a couple of years ago based on a friend’s recommendation, and the whole experience shook me up. There was a note handed to me when I checked in for my appointment that said. “As in all service-related businesses, it is common practice to tip the person who has done a good job to the satisfaction of the customer. The rule of thumb in day spas is 15% or more of the cost of the treatment. Envelopes will be available at the front desk when you check out if you would like to place the gratuity into one with the therapist’s name. You do not have to carry money around with you while enjoying the spa facilities. Tipping is always left to the discretion of our clients.”
I tried hard to remember when was the last time I got a 15-20% bonus/raise for a job well done. Never. That may be because I am an engineer! I really feel for the therapists because they are paid 50% or less of the treatment cost. The spa / franchise owner keeps the rest. Just like the real-estate broker and his agent. Or some are paid $25.00-$30.00 / hour for their work no matter what treatment they provide, with no benefits and part-time hours only. And the job itself is physically demanding from what the therapist told me.
I get hit up for a tip every time I get my hair cut at Chez Snooty in Dallas (which ain’t very often). I have no problem passing on the “opportunity.” With the ridiculous prices they already charge, if they aren’t paying the help enough, that’s a matter between the parties and I’ll be damned if I’ll tip after paying $40 for a freaking haircut.
$40.00 for a hair-cut? Wow! I used to go to Super-cuts - about 10.00-12.00, but the results were awful. Then I tried a couple of nicer salons - but the hair-dressers decided they knew what was best for my hair with no regard to my opinion or what I wanted them to do. Three times I said to different dressers cut my hair only an inch, I lost more like 4 inches. One cut my hair such that I would have spend 30 minutes each morning styling my hair with hair-gel and other goo before I went to work. No thanks!
Now I let my hair grow long. I take care of it and trim the edges every couple of weeks myself - and tie it up with a rubber band, or a hair-pin when I go out. End of story.
Me too. Mine’s long but every 4-5 months the ends start to look like hay so I go to Chez Snooty for a cut & conditioner.
I ignore how long my hair is until it’s past my a@@ then I put it in a pigtail, cut it off and send it to the ppl who make wigs for cancer kids.
I hate it the minute it’s short and start growing it again.
Chez snooty in the DC suburbs would go a lot more than $40, but I have found a way that I can live with.
Go to local cheapo chain store. Find an older immigrant woman with OK english skills but a heavy accent. It is very likely she knows what she is doing, but can’t get a job at a snootier salon because of the accent. Pay the $14 for the cut and tip her in the vicinity of 50%.
She always remembers me, does exactly what I tell her to do and looks forward to my visits. And I don’t pay for posh surroundings that don’t get me a better haircut.
Heh. I live in DC and do the same thing.
“Foreclosure signs are popping up in front of thousands of Dallas-Fort Worth homes for sale this spring.”
I love the spring flowers popping up in front of houses. I hope the signs are colorful. Soon the signs will out number the dandelions.
That’s big news around here when they have to auction Oak Lawn highrises. I predict the final prices will be less than desirable. There is still a lot of building going on around there and unsold very VERY expensive condos in downtown (Arts place starting at about 600K for instance) and others. Can’t wait to see what happens there.
Funny, in the early 80’s I bought a nice one-bedroom condo in Oak Lawn/Dallas for the same price as a larger Mercedes. I had wanted to find something in the classy streets with French names like “Versailles” or “Arcady” but ended up with a condo on “Bowser.” A few months later I found the old apt. sign (pre-conversion) in the garden supplies room. The complex had been called “Le Bowser,” so I guess I got some French snooty anyway.
Foreclosure signs are also numerous here in Austin, TX
Houses normally sit on the market for a long time now sits even longer. Central TX has to be the most difficult market to sell houses
Is this in the surburbs or in the City? In my neighborhood, places go in a matter of days - usually to property flippers whom install new cabinents and hardwood floors then jack the resale price by $50K.
Foreclosure signs are also numerous here in Austin, TX
Houses normally sit on the market for a long time now sits even longer. Central TX has to be the most difficult market to sell houses
“People with no money to put down having no problem accepting full asking price so long as the seller pays the closing cost.”
it reminds me of when we had “secondary finance” customers come into the car dealership to get a car, and complain about the numbers:
“I can swing the $550 car payment, it’s the $500 down that is killing me…”
It was always amusing.
Just got a flyer card in the mail:
(Front side):
BUY Bank Foreclosure
Up to 50% below market value
(This was on a white add on sticker that was placed over the original words):
Forget the Down payment
Own a home today.
(Back Side):
Get into a home with no money down
With today’s prices, saving enough for a down payment can be daunting, to say the least. Many buyers don’t know that it’s an obstacle that can be easily overcome. With a 100% financing loan you can get into a house with no money down.
(In large font RED letters):
It has never been a better time than NOW to buy your dream home at bargin prices.
;-) ;-0
Sellers pay up to $25,000 for your closing costs. Only $3,000 moves you into a home you can call your own.
Excuse me for bargin’ into this thread, but I think that flyer card has a typo. Shouldn’t those prices be bargains?
My typo…never realized that bar & gin were so related in a word:
Bar…g ins
“My typo…never realized that bar & gin were so related in a word:”
Dang you. I’m at work and you have given me a powerful thirst for martini….
Sorry AKRon,
What’s your favorite pub…give me the number and I ‘ll pay for the first Martini of your choice…really.
A minor rant inspired by wife’s job loss due to “restructuring” and watching some union people protest low wages and union busting today
People make money on houses
People drain money out of houses (HELOC)
People make money off the process
People make money off the spending of people who HELOC’ed
People in my area go 6x salary for housing
Jobs go away except for jobs supported by above
Can’t sell house – No Money
Upside down – No Money
People still make money on process but less and less
Retail sales drop
Jobs go away
No jobs available
Debt load is huge
People get stressed
Marriages get stressed
Kids get stressed
People lose house
Fake middle class gets crushed
Real middle class gets squeezed
An event
Fade to black
Is there a “real middle class”?
I thought it vanished when the laptop
collated and presented the salesmen’s reports
to the CEOs desk
eliminating the “middlemen”.
If this is a repeat of an earlier post, I apoligize.
http://www.wfaa.com/video/wfaageneral-index.html?nvid=133491&shu=1
a little off topic, but too funny not to post:
http://www.realestatelink.net/
These are three of the biggest tools I’ve ever seen—promoting their “rea-estate investor’s education” site.
I wouldn’t even want these tards salting my fies.
ummm..fries
Their still building houses in the Mtns of Colorado. The past week or so has been warm enough to finally thaw the dirt and today the backhoes are hard at work.
Despite the falling prices and huge inventory, they’re doing the same here in nothern VA as well. Incredible. Not just finishing existing houses, or even building out half-finished neighborhoods, but starting new neighborhoods. It’s *really* sad to see huge areas of trees being ripped out knowing that the homes to follow will sit empty, or not even be built for years.
Bear in mind that the mountain houses are targetting a different demographic. Doesn’t mean they won’t tank, just that they aren’t targetting working Joes.
Funny thing is that all my neighbors drive pickups, “own” their homes and consider themselves “working Joes”. One’s a CPA, another is an electrician, another a builder and another a finish carpenter. Several friends have new mortgages - refied out of option arms just this past month, another just bought new digs for $700k with as toxic a loan as you can get and fully expects values to climb fast enough to keep him out of trouble.
It’s different here, is all I hear whenever the bubble collapse comes up in conversation.
The majority living here full time are employed in some way by the REIC. It better be different here or else.
By “mountain houses” I mean the fancy stuff in Vail and Aspen, not the houses in the lower I 70 valley where the working stiffs actually work. I do agree that anything along the corridor is insanely priced, especially considering the lack of employment opportunities. Even Glenwood Springs is getting expensive. I can see the bubble popping in the valley, but not in the neighborhoods where Oprah and her peers own their multi million dollar vacation homes.
I know that “ordinary” houses can also command a ridiculous premium in the resort towns. I think that price drops in those areas will come more slowly than in the valley.
Agreed. And everyone believes there locale is the next Vail or Aspen, Telluride or Breck.
The question I ask is how high do you honestly think YOUR house will go, 1 million, 2 million, 3? Some of my neighbors will tell you straight out they think there is no limit. Heck, a house in Aspen no better than theirs sells for 5 million so it’s just a matter of time before theirs will sell for that too.
Backhoes?
Watch your language. Don’t forget what happened to Don Imus.
i live in ma. recently we made an offer . the house is priced at 700k, and the town assessed value is 600k . he is ready to accept my 500k offer. what should i do? should i wait some more time? what is the right prirce for this house. the seller purchased this house for 450 in 2001. built 1998. please advise?
Offer him 400K, see if he counters. I think you should offer no more than $425K, irrespective of what he paid or what he wants now or the assessed value. What if the prices go even lower than that?
Check out http://www.bostonbubble.com and the discussion boards there.
How does the price per sq. ft. compute at the 500k price?
How about renting the property vs. your cost of owning at 500k?
The seller is willing to accept about 65% off his initial price. That’s not just a trim, that’s a full-on buzz. I agree with Left CA in ‘04′s post above insofar as checking the boston bubble blog. Do that as well as the math on the two metrics I mentioned. Without knowing your particular market, financing situation, or the specs on the house, it doesn’t sound like a terrible deal.
its 2550 sqft clnl, .5 acre lot in a nice matured sub-division. actually the seller is relocated. right now relocarion agency is handling sale. zestimate is 610k. i sold my prev house in last june and renting an appartment for $1600/m. i am thinking of 475 for this house.
The houses I track in Boston are off 25%, easy. Decent house down the street from me has been on the market over a year, down 100k to 460. Won’t get it.
Believe it or not, I’d say your paying the going, current market, rate at 500k. I think we’ve got at least 10 to 20% to go before things bottom (over the next year or so). But, once they totally bottom the prices probably won’t increase for another five years after that. So, if you don’t mind, possibly, paying an extra 50 to 100k with little hope of recapturing it for ten years, by all means, buy it.
Prices rising and declining in San Diego (part of a whole section CNBC.com has on the Real Estate market):
In fact, any further drops can differ by neighborhood within the same city or region, brokers say.
For instance, in parts of San Diego, namely coastal areas and more established neighborhoods with limited inventory , prices have started to rise again, said Scott Voak, a broker with Century 21 in Rancho Bernardo, Calif. But other pockets of San Diego County, namely in newer developments, may see a jump in foreclosures in coming months, he adds. In these areas, many buyers used exotic mortgages to get into properties with small down payments — and made minimum payments that did not cover their monthly interest, causing their principal to rise beyond the value of their home. As the interest rates adjust on their loans, owners may find they cannot meet the new payment and have no equity left to refinance with. If such a scenario plays out, foreclosures will rise and prices will fall.
http://www.cnbc.com/id/17870639
Regarding the upstream discussion about why Texas construction is so shoddy. I worked in construction for part of my life in the Northwest and followed my wife’s career here 4 years ago and so have some opinions.
First, unlike nowhere else I’ve ever lived, Texans treat real estate as a disposible consumer good. This isn’t just true of residential but commercial real estate. Around every Texas city except perhaps Austin you see concentric rings of development rolling outwards like shockwaves. The Wal-Marts, multi-plex cinemas and strip malls closer in are abandoned for new construction further out at the next interchange. Same thing for housing.
There is a very real bias in Texas for new housing. To hear people around here talk, you’d think there is something scuzzy and odd about buying a USED house. Sort of like buying used underwear. The idea that people would actually PREFER to purchase older construction in established neighborhoods with mature trees, landscaping, and parks just does not compute. It confuses people. And they especially think it odd because few if any older houses in established neighborhoods can compete with all the modern flash they put into new construction with their fancy master baths and other glitz.
Finally, there is very little geographic exclusivity here in Texas. Pretty much any spot of prairie looks like any other. So the only way people know you have arrived is through the facade of your house and the size of the other houses on your street. In other normal cities that I’ve lived in (Portland, Seattle, San Francisco, Washington DC) there are clear geographic boundaries that define neighborhoods and class. In Portland, Seattle, and San Francisco it is views and shoreline. There are only so many places in Seattle where you can buy a house with views of Puget Sound, the downtown skyline, and Mount Rainier. And every single lot with those characteristics is highly prized and has probably held a beautiful house of some sort since at least the 1920s. Geography defines exclusivity.
In Texas there are very few such naturally exclusive places. So builders are free to build anywhere and the only way to define exclusivity is to build it.
That doesn’t exactly explain why construction is so shoddy, but it’s part of the same mentality.
I am in the ring built during the last boom in Houston. This was the far suburbs then, now it is just outside the beltway on the west side. Lou lives waaay further out than me.
This is an established neighborhood with mature trees. It is still desirable because of the horrendous commutes we put up with here. I am noticing a few extra for sale signs, nothing out of the ordinary for the spring selling season.
But Kent from Waco is right. New is always better here. We are constantly building/expanding freeways to reach those new subdivisions. I figure we will finish the Katy expansion [8 lanes each way] just about the time gas hits 5 bucks a gal.
Inner loop stuff is comparable to what txchick posts about the near downtown areas of Dallas. Huge loft/condo projects, tear downs and giant townhouses. You can fall asleep at night to the sound of gunfire.
same thing in Houston in the Herman Hospital, Rice Village, even River Oaks area.
Hey, we have fancy lofts in Waco too. Some Houston developer wants to put in a bunch right between downtown and Baylor in some old industrial buildings. I can’t see people here clamoring to live in lofts in old industrial neighborhoods, but what do I know.
http://www.llsamslofts.com/
http://www.osholdings.com/Behrens_Lofts.asp
Great post Ken - I think you hit the nail on head.
I would also add in that there is a lot of economic racism in Texas. It seems that the poor are not only situated in the city centers anymore, but have dispersed into the suburbs. As the poor move in, the not-so poor feel compelled to move onward.
skrook: I would also add in that there is a lot of economic racism in Texas. It seems that the poor are not only situated in the city centers anymore, but have dispersed into the suburbs. As the poor move in, the not-so poor feel compelled to move onward.
I suspect it’s an aversion to getting mugged and perhaps having their kids beaten or mugged in (public) school. Not to mention losing tens or hundreds of thousands on real estate as the neighborhood spirals downwards. I suspect this phenomenon will end the day some politician comes up with a way to insure them against higher crime rates and big drops in property prices. Or certain minority groups stop committing the vast majority of serious crimes. Until then, people will move when the neighborhood’s complexion changes.
KW: There is a very real bias in Texas for new housing. To hear people around here talk, you’d think there is something scuzzy and odd about buying a USED house. Sort of like buying used underwear.
This isn’t unique to Texas. Out in the Far East, used property sells at a discount to new. I’ve discovered that China, where private property was recently legalized, is no exception to this rule.
Wow it looks like I may have gotten out right in time. I sold my townhouse in Oak Lawn in December before moving out of DFW. I’m familiar with the condos going up for auction. Its actually a nice building and if they don’t set the minimum bids too high then you may be able to get a bargain. Check the HOA first though because they can be expensive.
In response to some of the questions above - The property taxes and insurance in Texas are high. I paid $9k in taxes for my townhouse valued at $375k. We also paid $2k in insurance. That comes to nearly $1k per month before you even touch your mortgage. I didn’t have an HOA, but many condos have HOA fees in the $250 - $350 range with the luxury condos having HOA fees in the $500 - $800 range. This keeps the sales prices artifically low, but the actual costs are similar in many ways.
The other question on qualilty of construction is somewhat correct. They do focus a lot on price per square foot and outside appearances so you may find some cheaper materials, etc. However I think this is happening all over and I see the same construction trends in California as well. One thing that Texas does have is foundation problems, especially in DFW. The soil is prone to shifting and you’ll see a lot of foundation cracks. People even have to water their foundations like they would plants the first few years after construction.
I pay 2K for a 350K house in Colorado. Insurance is 800 per year.
Just the idea of paying 1000 per month in taxes and insurance sounds insane. Sure you don’t have a state income tax, but still.
Why don’t they use post-tension foundations? Most newer homes built on expansive soils in San Diego use this method. My home was built by Centex in 96′ with post-tension.
Why don’t they?
Because they don’t have to, and it’s cheaper not to.
Homeowners don’t know any better - it the looks that count in the house you know. Thats why they give a 5 year warranty.
My whole subdivision built in 1981 in Houston did use post-tension. We watered the foundation.