An Unwelcome Houseguest In Texas
The Dallas Morning News reports from Texas. “More than 30 of the 45 residential areas The Dallas Morning News tracks have had declines in home sales this year. The biggest declines have been in Coppell and Westlake, which has almost an eight-month supply of houses on the market. Many buyers who relied on subprime loans are now out of the market. ‘It has lowered our sales some, and some of the people can’t get in,’ said Al Herron of Century 21 Galloway-Herron Realtors.”
“‘But it’s going to be good for the housing market in the long run,’ Herron said.”
“‘There is plenty of mortgage money available, but not under the ridiculously easy standards of the past several years,’ Dr. James Gaines of Texas A&M University’s Real Estate Center said.”
“The number of North Texas homes set to be auctioned in foreclosure next month is the highest since 1989, according to Foreclosure Listing Service.”
“Next month’s foreclosure auctions have 4,303 postings in the five-county area, up 7 percent from the same period last year, when 4,009 were listed.”
“Year to date, foreclosure postings are up 10 percent to 38,880 for the region, excluding Rockwall County. In Dallas County, they are up 8 percent to 18,326.”
“‘It’s very, very difficult to explain the postings for this month because there’s been no real material change in the economic conditions,’ said George Roddy, president of Foreclosure Listing Service Inc.”
“Economist Jim Gaines attributes the spike to delays in proposed plans to help mortgage-holders. He said lenders had held off on foreclosures because they thought that aid was on its way but had decided they couldn’t wait any longer.”
“He said the lenders are now saying: ‘We can’t really afford to carry this anymore. The meter’s running … need to shut the meter off.’”
The Star Telegram. “For the Nov. 6 foreclosure auction, 4,220 homes are on the block for Dallas, Tarrant, Collin, Denton, Rockwall, Ellis, Johnson, Grayson, Parker and Kaufman counties. The last record monthly number of 4,056 homes was posted in February, the research firm said.”
“That compares with 1,221 listed in November 2000, the firm said. It was in 2001 that postings began to rise, and they have accelerated every year since.”
“The new level is unwelcome news, said Roddy. ‘About the only one that can see a silver lining in this news is the real estate investor who is in a position to buy homes at this time,’ Roddy said.”
“Housing starts in North Texas slowed in the third quarter to the lowest annualized rate since early 2001, as home buyers became more cautious and lenders pulled back mortgage offerings. New home closings fell 19 percent during the quarter. Sales of existing homes have also declined.”
The Express News. “Bexar County foreclosure postings have hit the highest monthly total in more than 17 years, reaching a level not seen since the oil bust and real estate slump of the late 1980s and early 1990s.”
“November’s foreclosure auction will see 936 homes sold off to the highest bidder. And this is no one-month aberration.”
“Thanks to easy lending standards that gave no-money-down loans to people with questionable credit histories, higher foreclosures likely will be an unwelcome houseguest in Texas for a few years.”
“With so many homes headed for auction on the courthouse steps next month, Bexar County is on track to have more than 9,100 foreclosures this year — more than at any time since 1990. ‘The next wave has hit,” said Gaines, research economist.”
“Bexar County foreclosure postings slowed in the 1990s, but started rising dramatically by 2001. ‘This is the most we’ve had since the savings and loan crisis,’ said Gregg Stanley, owner of a San Antonio-based foreclosure tracking service.”
“More than 26 percent of the Bexar County properties going into foreclosure in November have adjustable-rate mortgages, according to a foreclosure data analysis by his company. And the loans going into foreclosure are fairly recent — just 4.5 years old on average.”
“‘These November foreclosures started about six months ago,’ Stanley said. ‘If you recall, that’s when a lot of the bad news was coming out about the national real estate market. Some people here just walked away from their mortgage.’”
“Gaines agrees, and believes the higher foreclosure numbers are here to stay, at least for a few years until the real estate industry works its way through the series of risky mortgage loans made in 2004 and 2005.”
“Texas foreclosures actually dropped in the first part of the year, but Gaines thinks that just was the luck of timing. He suspects banks and lenders may have held off from foreclosing for a short time, either in hopes a government bailout might come or in an effort to try to work out a deal with a homeowner.”
“When neither of those things happened, the foreclosure filings increased.”
“Meanwhile, San Antonio already has a rising inventory of pre-owned homes for sale and new-home builders are working to sell off a slight oversupply of homes. ‘I don’t think the builders are going to see relief for two to three years,’ Gaines said. ‘The inventory has to clear the market.’”
“One thing that should be different this time around with foreclosures, Gaines said, is that plenty of investors are willing to purchase distressed properties. With the little-to-no-money-down loans so popular in recent years, there’s been little financial incentive to try to stay in a home once someone falls behind on mortgage payments, Gaines said.”
“Mark Dotzour, chief economist for the Real Estate Center at Texas A&M University, told a group of San Antonio business leaders Thursday that between unsolved problems in the lending market, politicians in Washington, D.C., devising rescue plans and volatility in the stock market, the economic outlook for 2008 remains uncertain.”
“The best possibility for Texas: We slip past the national economic woes without notice. ‘It’s possible we could have a national recession, and Texas could choose not to participate,’ Dotzour said.”
“Dotzour said most of the problems in the national economy stem from lenders giving 100 percent mortgage loans to people who never would have qualified for a mortgage in the past. That’s over now. ‘Silly residential mortgage lending is over for this decade,’ Dotzour said.”
The Facts. “Heightened interest in Brazoria County property is leading to greater sales of tax foreclosure land, county officials say. Although it might sound like a good deal to buy land below market value, that’s not always the case.”
“‘It’s buyer beware,’ Tax Assessor-Collector Ro’Vin Garrett said. ‘A lot of people make offers on multiple tracts, sight unseen.’”
“‘Some of it is definitely a good value,’ said Precinct 1 Commissioner Donald Payne. ‘We have people who research this land and buy it, sometimes on speculation. We’re willing to take half the value to get it back on the tax rolls.’”
The Houston Chronicle. “The local housing market got slammed last month, posting its biggest drop in sales in more than a decade. Single-family home sales in the Houston area fell 15 percent in September as the real estate slump spread to higher-priced homes, the Houston Association of Realtors reported.”
“The slowdown is now affecting sales of more expensive properties dependent on move-up buyers selling their lower-priced homes. ‘There is a delay in terms of folks moving here that have a home to sell,’ said Tim Welbes, co-president of The Woodlands Development Co.”
“Jim Glaser and his wife have had their 104-year-old, completely restored Victorian/Craftsman home in Woodland Heights on the market for more than two months. But Glaser, who is retired and moving to Colorado, doesn’t have to sell the 3,200-square-foot, four-bedroom house by a certain date, and he won’t consider dropping the $779,000 asking price because he’s confident about the local market.”
“‘We just had a big open house on Sunday, and it was jam-packed,’ Glaser said of the Victorian. ‘This is a historic house, and it’s got to be the right kind of buyer.’”
“While September is traditionally slow for sales, tougher credit requirements stemming from a rash of subprime loan defaults continue to make it difficult for some buyers to qualify for loans.”
“‘By the end of the year, I think you’ll see more decreases in price,’ said Shad Bogany, of the realty firm ERA Bogany Properties.”
The Caller Times. “Sure, home sales and building permits aren’t where they were last year, but Corpus Christi’s economy still is strong and healthy, according to the chief economist for a nationwide title company.”
“Ted C. Jones, chief economist for Stewart Title, acknowledged existing home sales in Corpus Christi were down 8.9 percent from last year, he predicts that by end of the year home sales will have the second-best year on record.”
“‘Although sales are off from an unsustainable peak in 2005, there is a historically high level of home sales taking place this year — a lot of people are, in fact, buying homes,’ said Lawrence Yun, National Association of Realtors senior economist.”
“Cheri Sperling, owner of Coastline Properties Inc. on Padre Island, said business had been slower for real estate agents but things are looking brighter.”
“Jones said real estate markets are local and no two markets are the same. ‘While at one time Florida and California were at the top of the market, they are no longer there,’ Jones said. ‘Corpus Christi and Texas as a whole are stronger than most markets.’”
From Action 4 News. “Here in the Valley, one city is struggling with home foreclosures. If you stop by ‘El Valle Grande’ subdivision in Brownsville, for example, and knock on some doors, you will find no answer at many homes.”
“Instead, doors are secured with special locks to avoid vandals from entering. That’s because many of the empty houses have been repossessed- because the owners couldn’t make their monthly payments.”
“The 2500 block of Frankfurt St. in Brownsville has four homes on sale, most of which went through foreclosures last year.”
“The country as a whole, has seen a record number of foreclosures but 15 percent of those are in the Valley, with most of them in Brownsville. Realtor Linda Villareal, of One Stop Realty, who’s currently handling the sale of nearly 50 foreclosed homes tells Action 4 News, a big part of the problem are the builders.”
“‘The national builders came down and anybody ‘with a pulse’ was able to buy a house,’ she said. ‘There’s a lot of lenders that are making it easy but are just there to take the money.’”
The El Paso Times. “Esteban Zubia of El Paso was used to helping other people. He never dreamed he would fall victim to the nation’s housing crisis and need assistance to keep from losing his home.”
“‘I had fallen behind on my mortgage because the humongous increases in interest rates were not explained to me,’ Zubia said.”
“More then 156,000 Texans experienced foreclosure in 2006, a 14-percent increase over the previous year, according to ACORN. In El Paso there were 2,700 foreclosure filings in 2006.”
“An adjustable-rate mortgage is what led to Zubia’s troubles. He wanted lower payments on the Lower Valley home he has lived in for 25 years, so he said he decided to refinance. In about 21/2 years, his monthly payments ballooned from about $550 to more than $900.”
“The college-educated Zubia found himself needing a helping hand.’I never thought I would find myself in a situation like this,’ he said.”
‘The national builders came down and anybody ‘with a pulse’ was able to buy a house’
‘he predicts that by end of the year home sales will have the second-best year on record’
‘There is plenty of mortgage money available, but not under the ridiculously easy standards of the past several years’
‘The number of North Texas homes set to be auctioned in foreclosure next month is the highest since 1989′
‘Bexar County foreclosure postings have hit the highest monthly total in more than 17 years, reaching a level not seen since the oil bust and real estate slump of the late 1980s and early 1990s.’
Attention main stream media: the ‘all real estate is local, there is no national bubble’ thing is ringing pretty hollow now.
If they’re going to try and sell this crap, they really need to get some new material.
‘There is plenty of mortgage money available, but not under the ridiculously easy standards of the past several years’
Plenty of money available…but most can’t qualify to borrow any of it.
The good news: There is still plenty of mortgage money available.
The bad news: Lenders don’t want to loan it out any more unless there is a reasonable chance the borrower will be able to pay it back.
Here in Canyon Lake (Stratville) they just paved new roads to freshly cleared lots (formerly full of trees). Near Canyon Lake Golf Club. New construction still alive.
I never heard of Stratville, which side of the lake is that on?
Sorry, meant Startzville. Not sure exactly what side of the lake you call this, I just live here (renting)
New Braunfels side, or? Proximity to the dam?
Neither. I guess looking at the map, south side of the dam?
http://maps.google.com/maps?q=Startzville,+TX,+USA&sa=X&oi=map
there are several loop roads here, basically dead end roads. Been renting here for about 7 months now; haven’t had any trouble, decent neighbors on my street. Get 15 deer sleeping overnight in the front yard about twice a week.
Local phone/cable co-op just upgraded us to 10Mbps download, 1Mbps fiber!
Starting to look at empty lots and older houses for sale, as haven’t really found anything I dislike about the area. (Except high property taxes, offset by lack of income tax) Especially since I work at home (software developer) and don’t commute.
Wordpress ate my post, must not like the offsite link.
Go to Google Maps and search “Startzville, TX” - it is in there.
I guess you would say the south side of the lake? Basically just two intersections… one with a bar, 6 restaurants (Dairy Queen, taco shack, pizza place, local dinner) and an Exxon… next one has a full grown grocery store, McD, Post Office, Subway, Hardware store, another gas stations (boaters need it!).
We were renting in Austin for $1300/month and got sick of waiting for prices to drop… so moved out here for $850/month. Rent prices don’t seem to be going down yet here, just cheaper given the more rural location (despite the proximity to lake).
Been here 6 months, like it on our dead-end street. I work at home office (software developer), local cable/phone co-op upgraded internet to 10Mbps download, 1 Mbps upload for same price as DSL.
Like I said, new construction still going on. I am watching it 3 blocks from my house, plus across the narrows of the lake about 1 mile away. Lots of trees cleared, I’m expecting McMansions on undersize lots. Will see.
I’m starting to look at houses / lots here. No hurry, but getting familiar. Keeping power dry as they say.
OK, thanks for the link. There used to be almost nothing over there. It makes sense that you telecomute. As I recall, not many good jobs out there and drive time is crazy. Good luck.
Does anyone want to mail this reporter and tell him what kind of genius he is?
http://tinyurl.com/35xqkr
“An adjustable-rate mortgage is what led to Zubia’s troubles. He wanted lower payments on the Lower Valley home he has lived in for 25 years, so he said he decided to refinance. In about 21/2 years, his monthly payments ballooned from about $550 to more than $900.”
“The college-educated Zubia found himself needing a helping hand.’I never thought I would find myself in a situation like this,’ he said.”
Okay, where do we start? A supposed college educated person has their monthly mortgage go from $550 to $900 per month and they’re in danger of losing their house? Could this person not get a PT job to cover the $350/month?
Some college…
Maybe a community college? I worked PT at one in Austin while studying for the CPA exam. I asked an accounting teacher what percentage failed her Advanced Accounting class. She said zero; it is bad for their self-esteem.
Don’t get me STARTED on of all that self esteem garbage the education PhD geniuses have been peddling over the last 15 years or so. It’s unlikely those students’ employers will care as much about their self esteem as their teacher seems to.
Forget the college aspect. The guy owned the home for 25 years and was able to make the payment, why would he need it lowered from $500/month for the last 5 years - I’m betting he refied and got his equity out. What is he a victim of? Every time I read one of these slob stories, I email the authors and ask why they aren’t fact checking before the interview so they can ask appropriate questions and point out the OBVIOUS reasons these folks are not victims. What is with the herd mentality of journalism these days? I guess when we went from news being a public service to being part of entertainment they stopped doing any real investigating, picked up the party line so they can compete, and now all write the same stories.
Plus the idiot lived in his house for 25 years and it’s not close to being paid off, so he had to refi to lower his payments. Evidently his major was not business, accounting or finance.
self esteem why, of course. at a comm college. cant have the students unable to make the 4 year college get demeaned any further.
why, they might get a chance to make the accounting big leagues, like hmmm I dunno . . . Arthur Andersen!
Not a big chance really. The big five (how many are left?) wouldn’t even interview a CC grad. BTW, CCs are common in south Texas.
My first job out of college was at Peat Marwick as an auditor (widget counter). I had a secretary who made a lot more than I did.
yeah ben, I was riffing on the CC system. I totally grok the accounting hierarchy food chain. In fact, I temped at Arthur Andersen’s Sarasota location on Fruitville Rd many years ago as an office supply clerk. handed out the 100 year anniv thick glossy catalog edition to all worker bees that year. many of the so called “accountants” would chat w/me, and wanted to sponser me as an intern. they jokingly said the system used was all computerized anyway & a chimp could as easily enter the data!
had too much fun as a lifeguard to accept any desk job back then, but it was an eye opener fer sure. (lots o’ tanned babes in those cubicles also, as I recall)
DH&S here. worst 2 years of my life
“‘It’s very, very difficult to explain the postings for this month because there’s been no real material change in the economic conditions,’ said George Roddy, president of Foreclosure Listing Service Inc.”
Hey, Idiot! The mortgages are RE-SETTING. It’s time to pay the piper. But guess what, nobody ever really could afford the bill. They just signed up for the free equity.
Game over, you fool!!
ironic in-our-face advertising banner from a homebuilder at the top of the comments blog!
like someone once said years ago; we will soon reach the point of Starbucks opening up a Starbucks in the lobby of a Starbucks.
same with housing & advertising.
“The new level is unwelcome news, said Roddy. ‘About the only one that can see a silver lining in this news is the real estate investor who is in a position to buy homes at this time,’ Roddy said.”
Hey buddy the infestors skipped town a long time ago. Think of it like this they asked you to get out of the car to check the brake lights then drove away and left you standing there.
Pension funds demand that the Board of Directors get rid of Countrywide CEO Angelo Mozillo. They want him out!
http://www.chron.com/disp/story.mpl/business/5230302.html
Why? He played this beautifully, just check his bank account. Oh? You mean from the standpoint of an investor? What planet are you (pension funds) from that you would believe any of these asshat CEO’s give a sh*t about investors or the best interests of the company?
If they kick him out now they’ll have to pay him another few hundred million as severance.
–
“The college-educated Zubia found himself needing a helping hand.’I never thought I would find myself in a situation like this,’ he said.”
An accountess, who works in my son’s office, needed help in figuring out what was her real cost, even total payments, when she bought a $670K condo in 2005 with her $50K salary. Financial illiteracy is rampant among the so-called “college educated.”
Jas
Jas:
Lack of communication skills is rampant among the 20 somethings. Most can’t answer a telephone or e-mail properly yet they are put in charge of Human Resources.
I face this stupidity every day. My fate is in some clueless Paris Hilton fluff bunny’s hand, will my resume get passed on to her boss? Will she have any relevant experience to pick out the real skills needed for the job from my resume?
Do delusional tendencies and complete disregard of the facts run rampant in TX? I thought it was just a W thing.
“The best possibility for Texas: We slip past the national economic woes without notice. ‘It’s possible we could have a national recession, and Texas could choose not to participate,’ Dotzour said.”
What? I can only gather from that statement that TX is not part of the nation and it has a choice of whether it wants to participate in a recession.
“‘It’s very, very difficult to explain the postings for this month because there’s been no real material change in the economic conditions,’ said George Roddy, president of Foreclosure Listing Service Inc.”
How about lenders being less inclined to hand over money to subprimes, the end of 0% down, needing financial documentation for a loan, the end of flipping, no longer being able to use homes as ATMs, rising unemployment, $3 gas, $3 milk. I am not an economist, but that seems to be at least a little change in economic conditions.
Is there something in TX water (besides chemical pollution) that makes people think this way? I shouldn’t pick on TX since this can be said of most places when it comes to housing, but what comes from the mouths of these “professional” economists is amazing.
The only economist in Texas who has called this remotely right is that guy in Houston. Barton, I think.
It’s part of the Texas culture. Always say something PAH-SI-TIVE even if it’s not true.
Is it? The image I have of Texas is derived from Ann Richards and Molly Ivins. Both people that didn’t mince words, dress things up unnecessarily positive. Brutally honest and bitingly sarcastic at times. They were the exception, then?
Their passing was a great loss to TX and to those who appreciate biting wit and honesty. There is also Ron Paul, Willie Nelson and Ross Perot, but the likes of Gramm, Delay, Rove and Bush are, unfortunately, the ones that come to mind first for me.
What? I can only gather from that statement that TX is not part of the nation and it has a choice of whether it wants to participate in a recession.
Texas has always thought it was a separate country.
–
“The number of North Texas homes set to be auctioned in foreclosure next month is the highest since 1989, according to Foreclosure Listing Service.”
Foreclosures are the single best indicator of the fact that the prices have been falling in that area.
Jas
“‘We just had a big open house on Sunday, and it was jam-packed,’ [Jim] Glaser said of the Victorian.”
Bahahaha! BFD, Jim. That doesn’t mean any of those people “jam-packing” your house intend to buy it. In fact, most of them are probably like me and my wife, who occasionally attend open houses of over-priced POSs just for the humor value of viewing the gaudy furniture and electronics that the FBs have spent all their equity on.
By the way, do me a favor, Jim, and don’t move to Loveland when you get to Colorado. That is, unless you’d like to make a killer offer on my house.
don’t move to Longmont either, its really cold all the time
except for two days in summer when its 100
All those people probably came to the open house just out of curiosity to see inside a historic house, or maybe to case it for antiques they could steal later.
If you believe in this dude “Jim Glaser” you can sell your cow for a million dollars. Woodland, TX is nice but it is also on lowland. Every time it rained in Houston, you will hear some story about some boat rescue to some poor soul that does not know how to swim in Woodland. I would not live there if the house is $150K. I just don’t want to feel dreaded every time there is a hard rain pouring down the North I-45. That place Woodland is a flood plain. Your home insurance cost is probably $5000 a year not counting flood insurance which is a total separate entity from the home insurance. A $779K home in Houston, TX. Oh, please !. This guy is trying to retire with the easy way out. I will bet you a dollar to a donut that he will not be able to sell his house for the next 3 years or maybe forever until the price gets cut in half at least. What a croc !
–
“…the economic outlook for 2008 remains uncertain.”
When an economist uses the term “uncertain,” translation is recession, or worse. Tejas is either already in recession or will soon join the growing number of states in recession led by FL and CA.
Jas
I made a short sale offer of 240K to a guy with a nice house in Cedar Hill who has been trying to sell it for a year at 340. He accepted my price pending bank approval of the sale. I doubt they’ll take the deal.
It’s a really nice place in a high end neighborhood with many builder foreclosures around it. He doesn’t have a prayer of getting anywhere near what he was asking as the market there is completely frozen and nothing has sold in months.
–
Chick, what do you think such a house would have cost in 1996, 2000?
Jas
400K is what it sold for. That was the year it was built.
i gotta get off my butt and start window shopping.. see what’s out there.
It was an easy sell to this guy. He got a job in Houston and of course bought a house there before selling this one. Tried to rent it out and got some deadbeats who didn’t pay and he had to evict. He either short sells it to me or it goes to foreclosure. He can’t pay both mortgages, he can’t cover his mortgage with what rent he could get if he even found someone and I showed this the BS about IRS forgiving the income on a short sale. Done.
sounds good.. just a matter of waiting for the bank to crunch numbers and decide if they want another REO… or not.
Why not make outrages offers on soon to be bank owned property. Never know when someone will be sleeping at the wheel.
Wall Street remains bullish despite “doctored” data.
http://biz.yahoo.com/ap/071020/wall_main.html
“Instead, doors are secured with special locks to avoid vandals from entering. That’s because many of the empty houses have been repossessed- because the owners COULDN’T make their monthly payments.”
Here’s another one I hear all the time. They don’t know whether they Could make the payment or not.
What the writer knows is that they DIDN’T make their payments.
Big difference.
“He wanted lower payments on the Lower Valley home he has lived in for 25 years, so he said he decided to refinance.”
Clearly another “likely story”. The house should have been PAID OFF. if he had been paying more than $550 to begin with, then the house should be worth a small fortune, if he’s had it for 25 years.
This is clearly a CASH OUT re-fi, and he thought the money was free.
“‘We just had a big open house on Sunday, and it was jam-packed,’ Glaser said.”
A naked Paris Hilton would probably pack the house, too, but that doesn’t mean you’d want to marry her!
An accountess, who works in my son’s office, needed help in figuring out what was her real cost, even total payments, when she bought a $670K condo in 2005 with her $50K salary. Financial illiteracy is rampant among the so-called “college educated.”
Let’s see. I will teach Ms. Accountess.
Ms: $670K
Me: How much do you make per year?
Ms: $50K
Me: Now divide 50 into 670, what is that?
Ms: About 11.
Me: Do you think that the people loaning the money want interest?
Ms: Yes
Me: How much do you think it is?
Ms: I don’t know
Me: At least double what you are borrow. So what is 11 x 2?
Ms: 22
Me: Do you think you can go 22 years without food, clothes, a car, entertainment, that important cell phone, trips to XXX resort so you can pay for that condo? Do you think you can live 22 years without eating?
Ms: No, I want and am entitled to all of those because I make $50K.
Me: You aren’t if you buy that $670K condo?
Ms: I’m not?
Me: And what happens if you lose your job and can’t make your payment?
Ms: I don’t know?
Me: They kick you out and you are on the street
Ms: They would really do that?
Me: Faster than you can eat that jelly donut.
Ms: Maybe I better reconsider.
Me: Good idea.
Me: How much is the condo?
The math is very simple. But most people are complete idiots!
Consider people that over-borrowed to get into a $600K home that, during the bubble was “worth” $1M. They HELOC’d out 400K.
They’d think of themselves as MILLIONAIRES, even though they’d have to pay between $2 and $3 million dollars to have the title to this “million dollar asset” if they paid the payments at the prevailing interest rate.
And no amount of convincing would make them think they weren’t “millionaires” because they have the “million dollar home”!
Me: Do you think you can go 22 years without food, clothes, a car, entertainment, that important cell phone, trips to XXX resort so you can pay for that condo?
Wow, I’ve lived a sheltered life. I’ve never been to a XXX resort, so going 22 years more wouldn’t bother me. I’m guessing they ban clothing there.
Got popcorn?
Neil
Um… about 13, no? I hope for your sake you were trying to make her sound foolish.
I live in the metroplex and they are still building tons of houses. Builders just cant stop. It truly is amazing. Houses are not investments in Texas. They are used by the local and state government to raise revenues.
One of my friends is a mortgage broker and we were talking about the housing situation. He is amazed at the number of people with good paying jobs with terrible credit history. There was one couple he was trying to get a loan who made over $160,000 combined. They have a very successful plumbing business. Instead of saving their money, the couple spent it on new cars. According to my friend, neither one of them has any money in retirement accounts. The level of financial incompetence is astounding.
‘They are used by the local and state government to raise revenues.’
Very true. I once owned some land south of Austin. Out of curiosity I went to the dept of transportation to ask what they might do if I subdivided it. They said they would put in the entrance and a road all the way to the back, making it a cul-de-sac. This road would have probably cost them three times what I paid for the land.
Credit quality is off the charts bad in DFW.
It’s the greed factor. The more they make, the more they want to buy. Their spending goes up in line with their raises.
OT…. Lucky Buys Yucky
http://www.grabmotivatedsellers.com/
Did you get that email too? Some spammer has harvested from this blog obviously.
“Buyers are emerging.” If these statements by the realtorwhore shills like Lawrence Yun of the NAR, are to be taken at face value (very dangerous practise where realtors and brokers are concerned) property sales in some areas are picking up.
If true why is that? Simple and predictable. We are in a massive deflating bubble which is still in the early stages. This bubble is possibly the most financially destructive bubble of any bubble ever seen. As in ALL bubble scenarios, the unwary think the bottom is near. However, any chart from past “bubbles” will tell you that IF people are buying before capitulation, they are usually financially unaware GF’s who beleive people with “hidden agendas” like David Learah and Lawrence Yun or even their local realtor.
If you look at the charts of previous bubbles AND THEY ALWAYS FOLLOW THE SAME ROUTE, there are several levels (support and resistance) where the deflating bubble pauses as GF’s rush in to catch a falling knife - usually because they are scared of missing the bottom -and in a few months realize they have sustained a nasty cut from the falling knife when no more buyers emerge to support the (weak) buying trend and sellers are forced to lower their prices again. Thus, the bubble continues on it’s merry way - downwards.
Never trust any statements from those who have a financial interest in the eventual outcome. I never trust the words of people like Paulson or Bernanke or Bush or Cheney or Clinton who yada-yada on with their sales pitch, with the sole purpose of trying to convince me they are right. Example: We are going into a recession but according to the “experts” the chances of a recession are slim and less than 50/50. Wrong. I put it at 80/20. When that happens that will NOT help the FB’s so comforting words (b.s) coming from people like one of the Financial Gangsters Of Wall Street’s Godfather’s (Paulson) or Bernanke who, along with Greenspan, have turned the US dollar into confetti, are nothing but tainted b.s. Conclusion: If the dollar is strong as these shills tell us, then why the fook is it losing value every day! Duh.
Once again. We are in the early stages of this bubble. When all the re-sets have happened, when the coming recession is over, when much of the incredible, massive, mind blowing, monster size inventory has gone, when a few big builders have gone bust, THEN it might be a time to buy. The old saying is one to stick on the computer just above the screen: “When there is blood on the streets - Then it’s time to buy.” So far, we have only seen a paper cut where this bubble is concerned.
Most of the people on this blog have been right and the David Learah’s, Greenspan’s, Bernanke’s, Krudlow’s, Cramer’s and hordes of other pompous “experts” on The CNBC Comedy Business Show have been WRONG concerning real estate. Take your pick.
Interesting comment from somebody who claims the former Ryland president told him the bubble is much worse than anybody realizes (in Florida)
http://reggiemiddleton.typepad.com/reggie_middletons_perpetu/
“The new level is unwelcome news, said Roddy. ‘About the only one that can see a silver lining in this news is the real estate investor who is in a position to buy homes at this time,’ Roddy said.”
I guess the days are over when people bought houses TO LIVE IN, if someone in the real estate industry doesn’t even recognize them as a type of homebuyer.
Pulte sold 9 of its DFW subdivisions to various local builders and is having some sort of sale this weekend. A former PHM salesman who went with one of the acquiring builders told me they needed to sell to raise cash, in part because they spent too much for the land for the Del Webb Frisco project.
Two conflicting reports from Sherman. First, property manager tells me all real estate there is sucking wind, including the rental market. Apparently, there have been layoffs and the economy is soft. The DFW property manager, by contrast, tells me the rental market in DFW is firming as a result of the mortgage situation because former owners are now renters. Second, former PHM salesguy in Sherman tells me he has sold 5 houses since the new builder took over and a big part of the reason is that the builder offers custom options that PHM would not offer. This does not make a lot of sense to me.
‘It’s possible we could have a national recession, and Texas could choose not to participate,’ Dotzour said.”
Man, I wish I had know I had a choice not to to participate in the past few recessions I’ve been through !
Man, I wish I had know I had a choice not to to participate in the past few recessions I’ve been through !
Bluto: [thrusting six-pack into Flounder's hands] My advice to you is to start drinking heavily.
Got popcorn?
Neil
Ha…make fun of Lubbock now, all you ‘other’ Texans. We have had a slight dropoff in home sales, have more listings than usual, but overall, the economy is booming here. Very low cost of living, lots of jobs, clean fresh air and a small town atmosphere for a city of 220,000. Moved here in 1978 and truthfully, hated it at first (came from Phoenix). Last 10 years or so, couldn’t be happier in this quiet, forgotten part of Texas.
Y’all stay away…ya here
There’s a college in Lubbock right? Tech or Texas something or other……