A Psychological Issue In Texas
The Dallas Morning News reports from Texas. “Almost 43,000 Dallas-Fort Worth area home foreclosure postings were recorded for 2007 – up 10 percent from last year and near a record. Home foreclosures in the D-FW area have grown by about 50 percent in the last five years, due in large part to lax lending standards, analysts say. The number of homes facing foreclosure for December’s sale is up 14 percent from the same month of last year, Foreclosure Listing Service reported Thursday.”
“This biggest jump is in Collin County, where the number of houses threatened with foreclosure next month is up by almost a third. Foreclosures are also up 23 percent in Denton County.”
“‘I think it is safe to say that the postings for the Dallas-Fort Worth area are at all-time highs,’ said George Roddy, president of Foreclosure Listing Service.”
“‘The problem loans that were made between 2003 and 2006 are coming back to bite us,’ Mr. Roddy said. ‘Bad, or better said, ill-conceived loans are going to be a thorn in the side of the D-FW economy for years to come.’”
“Much of Middle America – including most Texas cities – will dodge the worst of the housing downturn, the top Realtor economist predicts. Many areas of the country, including North Texas, are holding up well, Lawrence Yun, chief economist with the National Association of Realtors, said.”
“Sales in the Dallas-Fort Worth area are running about 7 percent below the year-ago pace.”
“‘The first thing you have to look at in your marketplace is what is the change in new listings,’ said housing analyst John Tuccillo. ‘The market will not recover until the new listings in your market begin to fall.’”
“Through the first 10 months of the year, new listings are down 1 percent from the same period of 2006, according to the North Texas Real Estate Information System. However, the time it takes to sell a house in the Dallas-Fort Worth area has crept higher.”
“‘The days on market must begin to fall’ before the market can recover, Mr. Tuccillo said.”
“Realtor executives (meeting this week in Las Vegas) did their best to blame media reports for much of the market’s woes. But the real estate agents themselves aren’t blameless for the excesses that now plague the home market.”
“‘Realtors and mortgage brokers make the deal, get their check and walk away,’ Mr. Tuccillo said. ‘The system is set up so that in times of excess, the front end automatically makes bad decisions.’”
“Mr. Yun said many housing markets stretching ‘from the Rocky Mountain states to Appalachia’ have undervalued home prices and won’t be clobbered by dramatic price declines. ‘In Salt Lake City and Austin, Texas, for instance, we are seeing double-digit price appreciation.’”
The American Statesman. “The Monarch won’t emerge as condos after all. First planned as apartments and then changed to condominiums, the 305-unit residential tower that is under construction in downtown Austin has been switched back to apartments.”
“ZOM Texas Inc. said the decision was based on timing rather than demand, with uncertainty in the mortgage markets a factor in slowing buyers’ decisions. ‘The buyers are there, just not at the pace we needed by early 2008,’ when the project opens, said Steve Buck, chief operating officer of ZOM Cos.”
“Prospective buyers had put 20 percent of the units under contract in the past two months, said Kevin Burns, a broker (who) had been marketing the units. But John Faulk, development manager for ZOM Texas, said the volume of sales had slowed to such a point that ZOM didn’t think it could meet its internal goal of selling 70 percent of the units by April, when the 29-story building on West Fifth Street is scheduled to open.”
“‘The demand was clearly there,’ Faulk said. ‘We just got caught in this time crunch.’”
“The sales goal was roughly the amount needed to pay off the project’s construction loan, Faulk said.”
“ZOM will refund earnest-money down payments of 10 percent on the units, which were priced from $229,000 to $1.75 million. ZOM will start leasing the units as apartments in February; monthly rents will start at $1,650.”
“‘We have had a little pessimism in the marketplace,’ Burns said. ‘People are dotting their i’s and crossing their t’s before making a decision to purchase. This is a psychological issue right now. This is not a bellwether of our market.’”
From KXAN. “Attorney General Greg Abbott said the rate of foreclosures in Texas is a crisis. He also warned that some lenders are contributing to the problem.”
“‘In part, because a lot of these homeowners were misled into entering into these loans to begin with, that we’ve been involved in bringing legal actions against some of these sub prime mortgage lenders, such as Ameriquest,’ Abbott said.”
“KXAN Austin News spoke with two realtors Monday, who said that the foreclosure rate in Travis County is actually down 15 percent, compared to this time last year. Carl Shurr, a real-estate professional, said that foreclosure rates could be about to increase.”
“The fallout from the sub prime debacle, which had new homeowners with lower credit scores buying, has yet to make its impact. The problem with the market is that many new homebuyers are purchasing adjustable-rate mortgages.”
“‘If inflation continues and rates keep increasing, adjustable rate mortgages are going to go right with that. Even though foreclosures are down 7 percent since last year, they’re up 112 percent since 2001,’ said Shurr.”
The Herald Tribune. “Waco Town Square has been tweaked to include 164 loft-style residences called the Austin Avenue Flats, spread over 150,000 square feet — more than twice the housing space developers first considered. They say they’re only responding to demand.”
“‘Our studies show people want to live downtown,’ said Michael Wray, of Waco, who will oversee development of the lofts.”
“The group now says it will build nearly 150,000 square feet of lofts, compared with the 60,000 square feet it once considered.”
“Meanwhile, proposed office space has dropped from 68,680 square feet to about 10,000, while restaurant/retail space has fallen from 61,880 square feet to about 34,000.”
“‘From my standpoint, the more people downtown, the better,’ said City Manager Larry Groth. ‘If we can create developments that put bodies here 24/7, that goes a long way toward overcoming the perception of a crime problem downtown, and it really is only perception. People also drive demand for other services, and they use public spaces.’”
From KFOX News. “El Pasoans have begun to see the national foreclosure problems hit along the Borderland. Because of all the recent foreclosures, mortgage companies have decided to tighten up, giving fewer people loans, and as a result, fewer people are buying homes.”
“KFOX met up with one Far East El Paso family that has decided to move out of their own home, but not by choice. They’ve been forced out by foreclosure.”
“‘Time went by and all of a sudden, just I don’t know, $8,000 into the hole, and the next thing I hear is foreclosure, so now I got to take care of the whole situation,’ said Jorge Pina who owns the home.”
“Pina rented out his home to a family that got behind on payments on a high interest loan they received from a mortgage company.”
“‘It was pretty much a 10 percent loan, pretty much this whole deal was rushed in there. It could have been done at a lower percentage, but since the tenant was kind of urging to get it fast, get it quick, then that’s what caused the original problem,’ said Pina.”
“‘Mortgage companies are having hard times qualifying people, they are asking for more prerequisites to qualify buyers,’ said Rosalinda Medina with Success Realty.”
“What may only compound the problem is homes are selling for significantly less than what they’re worth, and what the homeowners originally paid for.”
“‘Houses used to sell like this one, used to sell for like 195, now it’s only like, 175, 180. It’s like $10,000 or $15,000 less than last year,’ said Medina.”
Ben, you’ve got to stop posting this stuff while I’m having lunch. Thank goodness I’m alone!
People want to live in downtown Waco????? Oh. lord help me, I’ve heard it all now.
Aw, why not? At night they can ride that big paddlewheel boat.
Ben, just in case you were wondering if anyone noticed, I especially like those posts where you link to a quote from Yun, claiming that the market in such-and-such a place remains strong and unbubbly, then immediately follow that quote with a link to a local publication, describing how awful that market truly is….
This is clearly the new NAR strategy. THere may be a national housing bubble, but note in your town, neighborhood, etc… The “real estate is local” tag line.
San Francisco, Seattle, Miami, Utah, the entire midwest, etc… And I’m betting that even in places like So. Florida and San Diego they are saying this or that enclave is “different” and not impacted by national developments.
Everytime a Realtor tells me that Pullman is “unique” or “special” my standard response is that: “Real estate is local, but credit is global.”
I’ve been to downtown Waco, interviewed at Baylor a few years back, and have to say it looked like a war zone. Schools are awful. The hotel where I stayed just off the Baylor campus hired off duty police to patrol the grounds and halls at night.
Needless to say, I didn’t feel very safe.
–
Californicators who can no longer afford to move to Austin will head for Waco. Waco has a great future for cheapskates running from high-cost areas.
America was built by optimists and not chicken littles.
Jas
BWAHAHAHAHA!!!
(Bell County native)
Dear Californicators and other “investors”:
Speculate in northern Central Texas at your own risk. “They’re not making any more land” might be true, but finding empty land to put up crappy subdivisions has never been an issue in Waco-Killeen-Temple (there’s plenty of empty space along all sides and in the middle of this triangle).
I am confused about DFW though … from reading this blog all the time I know better than to believe the NAR tripe about the bubble missing this town, but it does still seem cheaper and less inflated (of course my frame of reference is bubble-manic D.C.). So was there a bubble here or not? If I’m looking to buy late summer or fall 2008 can I expect prices to be down somewhat? Just hard to tell how long to wait on this market since prices didn’t seem as inflated, even if days on market is creeping up now. Looks like foreclosures concentrated in a few of the farthest-out areas.
Yes, there was a massive credit bubble. People bought far more house than they could afford. It only differes from other bubble areas in the amount of debt people are on the hook for.
I see what the OP is confused about. Even now, if you look at craigslist Dallas/Fort Worth, there are still an awful lot of homes that are listed at well below 100k, which by national urban areas is still well within the realm of affordability. So I think the question would be was there a bubble? I think Dallas might not be one of those speculative cities. Sure- I’ll bet a ton of Californians invested in it since it was ” undervalued”, but this was pretty late in the game.
People simply bought bigger more expensive homes, but there wasn’t the all-out lack of affordable housing like there was in SF, Seattle, NYC, etc etc. There’s a big difference there. As for me, I could easily buy a house for cash in Dallas right this very minute unlike here in the Bay Area, SF where a ’starter’ home is still around 600k.
Thanks - yes, that’s what I meant. I’ve been saving for a down payment and can easily make 20% at DFW prices right now, and really am only waiting until I’ve been in town awhile to get to know the areas I might like to buy in. But since the prices seem so low to me already, was just wondering if they should come down at all over the next year. Given the credit crunch, once listings flood the market in the spring it might be a better time to gauge.
It is kind of a quandary. I’m from the Southeast originally, living in California, and I too have a similar observation as well as some concerns if I were to move back. As you’re seeing, housing is still quiet affordable there as well as the areas I’m looking at. The difference is that yes, there are tons of new Mcmansion subdivisions that were built during the boom and are way out of whack with local prices. These were strictly for out of state investors and relo’s from more expensive places. This is why there are foreclosures.
On the other hand, small, older, rancher style homes- while usually kind of ugly- are still in the 100-150k range in most of the areas I’m looking. Here’s the thing I worry about. The Northeast: Phucked. The West Coast: Phucked. Florida: Phucked. The rust belt-aka-Michigan: Phucked. Canada: Phucked….. The Southeast: Still actually affordable to an extent. On top of all that, Most of the old folks in this country live in those previously mentioned “phucked” zones and want cheap real estate and cheap places to retire.
So while the rest of the country goes to hell in a handbasket, I’m a bit concerned that people are simply going to cut and run to anywhere they can possibly afford- aka- the South.
Therefor my biggest desire is to see the national housing market crash enough to dump prices in these phucked zones so that people will actually be able to afford it and hence- stay versus flooding my home region- as nasty as that sounds.
Well I’m from Arkansas and what I saw was that people that had no business in a home say 15k a year salaries where buying 100-150k houses this when all the way up. Basically everyone was buying at 5-10 times income same as California. Your not taking into account price/income.
I live in DFW area as well; if I were you I would watch out for the new developments, as they seem to be more overpriced than existing homes, as some have mentioned. And, even around where I am, there are huge unfinished developments that have seemed to stall in the last year. So if you are looking new, I would expect prices to fall as the builders get desperate… maybe 15%?
Older homes probably aren’t too overpriced, maybe 10%. I would recommend just comparing price-rent wherever you are looking. In many places, you can find homes for 120x rent, and at that level I think it’s not worth it to wait if you have the 20%. All kinds of homes are less than 150k. But remember, whenever you buy, they’ll get you with the property taxes! And your energy bill will eat you up as well, so it’s not quite as “cheap” as it looks.
i believe there will be many serious consequences to falling prices.. kinda obvious to say that.. But, it’s impossible at this point to say what businesses will survive and which will go bust.. meaning no job.
So if i had perhaps (only) 30 or 40K saved (for a down payment) i don’t think i’d risk it right now. A person might have a home, but cash could be very hard to come by due to unforeseen circumstances.
A quick rule of thumb to figure out your monthly house payment in Texas is that it will be very close to 1% of your house. e.g. - if you buy a $300k house, you will pay very close to $3k per month.
People shouldn’t move to the south. It’s filled with hicks and rednecks and other horrible things. Incest is rampant and I am my own grandpa.
Just stay were you are.
yeah.. well dont come to calif either.. were fruits and nuts and gangbangers and its overcrowded as hell.. and earthquakes. and everything is overpriced.
And if your already here, leave.
I see the same thing in Columbus OH; a kind of selective bubble. New housing is ~25% bubble-overpriced — and it’s the no-yard McCrap&Condo spec to boot. Existing decent housing is coattailing at about 10-15% overpriced. If you want to live in a semi-hood, houses are priced okay.
I’m not going to beat this nag to death again.
Anywhere in DFW where you can buy a house under about 250K, you would put a bullet in your head after a week.
What? I thought you like that Lake Ridge area by Joe Pool Lake?
There are bubbly enclaves everywhere, and lots of subprime and foreclosures as per the article.
I drive through Southlake, TX to work now (high priced area west of Dallas). Lots of acreage mansions, builder fancy stone copper roofed spec houses, empty lots, and existing houses for sale on my 3 mile drive. Not to mention a former NFL sportscaster’s estate off my route. An associate got pretty much the last house in the city available under $200K, and that was back in 2001.
I think these are Dallas area NAR numbers from 2001..2005 (Haven’t gathered the recent ones, since it became clear that using those in any way to estimate my homes potential sales price is pretty silly
Year Med k$ percent Growth
2000 122.6
2001 129.9 6.0
2002 134.7 3.7
2003 138.2 2.6
2004 137.9 -0.2
2005 149.1 8.1
Compared to the really bubbly areas, not so much.
Devildog,
I was thinking along similar lines. If I take a person with an 850 FICO and immaculate credit and offer him a home w/zero down and ridiculously low payments (based on his fine credit history of course)… I just turned him into a dirtbag now didn’t I?
I evidently didn’t really “sell” him on it b/c he doesn’t really have any skin in the game! So he figures, “Sure, o.k let’s see where this takes me?
I mean, that IS… the message here, right? “Why have you been so damned up-tight all your life? Buying no more than you could afford to pay! And look, where has it gotten you? Sure, you’ve got this enviable c/r and all but take a gander at how “the other half lives!”
Now… did you want yours with 40’s and chrome rims or hootchie girls by the pool? Sheesh. It was a freakin’ Bling Factory. A dirtbag factory.
As a bitter renter, I love reading your posts, DinOR.
“So was there a bubble here or not?”
I sold my mother’s little 1911 bungalow in the Fairmont District of South Fort Worth for $44K in 2003. The house was literally falling down, and the crack den around the corner was regularly featured on “Cops”, so this seemed like a fair price to me. Sold to a contractor who fixed it up beautifully and resold it in 2004 for $88K, which also seemed fair. There were two more sales after that, and the Zestimate peaked in January ‘07 at $171K, so, yes, I would say there is a bubble!
I hope all those sheeple from Bakersfield who were doing deals in San Antonio get their heads blown off - “you know, they have a new Toyota plant…” - LMAO!!!
I noticed on one of the comment threads for a SD UT article a guy bragging about selling his home in SoCal in 2005 and making a $300,000 profit, and by the way, those of us who still live here (happily by the way) are losers. He was such a jerk about it; hope he bought a McMansion in El Paso with the dough so he can paddle up the Rio Grande.
Very few of those types will hang onto those gains. From all I have read, they either sunk it back into real estate, or are in the process of frittering it away-not growing it. They’ll end up with no money and no house, or a house with zero equity, never to be heard from again.
“in the process of frittering it away-not growing it”
Sometimes unknowingly - like keeping it in US $. When it loses much of its value in a few years, the homeowner may have the last laugh.
i was in our local winco store last month and i overheard a sheeple talking about how she owns 9 spec. houses in different parts of the country that she cant sell (ha! ha!) and she was bitching about how there were too many specuvestors in the neighborhoods where she bought and that was the reason for her failure. what a moron. that was the first time i heard an “investor” complaining that to many people “invested”. LOL!!!
Isn’t that ripe!? The hypocrisy is astounding.
chuckle.
What the problem is everyone bought… now everyone wants to sell.
Nine homes?!? Obviously raising the conforming limit to $1 Million is going to save this market! Bwaaa haaa ha!
Oops… gotta keep that in.
Got popcorn?
Neil
““What may only compound the problem is homes are selling for significantly less than what they’re worth…””
What nonsense.
“Much of Middle America – including most Texas cities – will dodge the worst of the housing downturn, the top Realtor economist predicts. Many areas of the country, including North Texas, are holding up well, Lawrence Yun, chief economist with the National Association of Realtors, said.”
i wish someone would stuff a dirty sock in this guys mouth!!! maybe that might get him to quit spewing the “there’s no bubble here” crap!!
Translation:
Not everyone needs to worry about the bubble popping. Look at these areas, the bubbles still growing. Thus overall, everything is a wash, and there is no need to panic.
My earlier post didn’t seem to make it through (so sorry if a double post!)
I am having a hard time figuring out the DFW market — obviously it didn’t escape the bubble like NAR claims, but it still seems cheap compared to bubble-mania in D.C. and didn’t seem to have as much of a run up in prices. I see quite a few nice-looking houses on MLS in the $65-90psf range. Is this overvalued for Dallas or is it just there’s a lot of $150-200 psf stuff out there that hasn’t come down yet? Should I expect more drops if I’m looking to buy late summer or fall 2008?
Yes, the DFW housing prices will plummet. Don’t buy in too soon. The main reasons for the low $/sqft is illegal labor and high property taxes. In mid 80s in Houston condo prices fell 90% and could only be purchased with cash (hence why they fell so much - no one had much cash). SFH easily took 50% haircutts at that time. Not saying that DFW will play out exactly like that, but be prepared. Don’t buy too soon, you can’t buy too late - the bottom will last years, you won’t be able to miss it.
Yup, adjusted for inflation, Houston prices have never recovered the 80’s numbers.
We lived in Houston…twice. Anyway, the second time my parents moved to Houston (Missouri City) in 1985 they bought a 4/2 brick ranch, nice neighboorhood for 82K. We moved away 2 years later in 1987. The company for which my father worked sold the house at 76K. This year I look up the same house one block away… listed 110K. OK, keeping up with inflation, right? Well, I ask my father about the 2nd Houston house and he says to me “When we bought the house in 1985, the Realtor said it sold for 100K when it was new in 1978.” YIKES!
Another thing - you don’t want to be one of the first people to “get a deal” in a community. As foreclosures continue to skyrocket over the next several years neighborhoods will change drastically. What may start out as a cozy community may easily wind up as crack row. Try to hit the back end of the bottom, or even wait for prices to inch up a little. Knowing you’re not stuck in a slum for life should be worth a small premium.
Yeah, now that Yun has said the relatively same areas are safe, I’m scared. We have about 40 houses in our cul-de-sac development. 2 for sale signs in sight of our house. Hasn’t been much activity until last month.
One of the houses has had a huge moving van outside for 2 days now. Are the moving industry people busy, or depressed?
Ain’t that the truth. I’m so sick of reading that BS, it isn’t even comment worthy anymore.
“‘Mortgage companies are having hard times qualifying people, they are asking for more prerequisites to qualify buyers,’ said Rosalinda Medina with Success Realty.”
“What may only compound the problem is homes are selling for significantly less than what they’re worth, and what the homeowners originally paid for.”
Gak! Hey, Rosalinda! Two things for you to think about:
1. The mortgage companies having “hard times”? I think they’re just asking for what they should have been asking for all along. You know, stuff like income verification, down payments, etc. That stuff.
2. Houses “selling for significantly less than what they’ll worth”? How about houses selling for what people can actually afford (and with a loan that they can actually afford based on all the new stuff mortgage companies are demanding) in the long term….the way you use”worth” is…well, worthless.
“What may only compound the problem is homes are selling for significantly less than what they’re worth, and what the homeowners originally paid for.”
I purchased a Beanie Baby for $700, now I can only sell it for $50. What is the real worth of it then?
“‘Houses used to sell like this one, used to sell for like 195, now it’s only like, 175, 180. It’s like $10,000 or $15,000 less than last year,’ said Medina.”
That’s all that some prices are down there? Here is Cali. you can easily find a loss of equity that could allow someone to purchase TWO homes in less bubbly areas.
it sounds like her Success Realty isent such a success after all!!!
Many areas of the country, including North Texas, are holding up well, Lawrence Yun, chief economist with the National Association of Realtors, said.
This is the same dumbass who was quoted yesterday as saying that San Francisco and Silicon Valley hadn’t even participated in the real estate boom. Why journalists don’t apply even the slightest skepticism when parroting his outright lies is impossible to understand.
Foot, meet gun. Those NAR dumbasses are going down. They continue to just make stuff up…it’s incredible. I noted yesterday that they (as an organization that is supposed to be advocating for their dues paying members) probably SHOULD be figuring out how to make hay out of the REAL situation, but they continue to try to party like it’s 5 years ago.
But Las Vegas’ economy is based on people partying like it was five years ago. Ever been to the Strip?
“Why journalists don’t apply even the slightest skepticism when parroting his outright lies is impossible to understand.”
Not impossible. Just follow the money trail….
“‘Our studies show people want to live downtown,’ said Michael Wray, of Waco, who will oversee development of the lofts.”
This is a remarkable perspective. I visited Waco in 2002 and its downtown, on an ordinary workday, was eerily silent, as though a bomb had gone off. It is hard to know who would want to live there.
Of course they do. They want to be close to work, shopping, and their local Millenialist cult.
Waco has a downtown?
Now that is a good one.
Sure it does.
It’s between Baylor University and the Sonic on old Hwy 35.
There’a a DPS (highway patrol) station in a strip center.
don’t forget the texas rangers museum …heh
I visited the Dr. Pepper Museum while I was there, and then my friend and I spent about 30 minutes wandering around downtown Waco trying to find a living soul who might tell us how to find the Branch Davidian complex. Finally we asked someone behind the counter at the (Hyatt? Hilton?) and after pretending for a few minutes not to know the answer, she reached under the counter and handed us a photocopied map instructing us how to get there. Score! Waco knows which side of their bread gets the butter.
“‘The first thing you have to look at in your marketplace is what is the change in new listings,’ said housing analyst John Tuccillo. ‘The market will not recover until the new listings in your market begin to fall.’”
“‘The days on market must begin to fall’ before the market can recover, Mr. Tuccillo said.”
- Well, which is it? days on market or change in new listings?
I have heard that everything is ‘bigger’ in texas, I guess that includes lying.
“‘Time went by and all of a sudden, just I don’t know, $8,000 into the hole, and the next thing I hear is foreclosure, so now I got to take care of the whole situation,’ said Jorge Pina who owns the home.”
“Pina rented out his home to a family that got behind on payments on a high interest loan they received from a mortgage company.”
“‘It was pretty much a 10 percent loan, pretty much this whole deal was rushed in there. It could have been done at a lower percentage, but since the tenant was kind of urging to get it fast, get it quick, then that’s what caused the original problem,’ said Pina.”
Am I the only one who doesn’t understand what the hades this jamoke is talking about? What, he bought a house because a tenant wanted to rent it and the tenant hurried him into a high rate loan? Someone help me out here, because this story makes no sense to me.
OK, still trying to figure this one out. Pina has a home. He rented his home to some folks who were foreclosed because they had too high of a mortgage payment and rushed into it. Now his home that he’s renting out is being foreclosed, too?
new scam?
http://www.sacbuyers4u.com/
Yeesh! The site design all but screams “scam.”
No kidding - the kicker being that you could do the lease option yourself so why would you need them - big time scam!
“what the hades this jamoke is talking about? ”
It’s been a long day and I now have coffee all over the screen.
Thanks, Palmy. Only an old Yankee would call this class A fool Pina a jamoke. Just warms my heart.
And attention Citi, Merrill and Barclays…this is the kind of fool you gave a mortgage. Bwahahahaha.
LOL. Not to threadjack Texas, but I just had to laugh.
http://tampa.craigslist.org/rfs/479819069.html
I hate to break it to the guy, but if that’s a junky old condo appraised at $165K a year or so ago, and there are issues with the residents or problems with the maintenance, he’s overcharging at $85K.
Increases in fees and rapidly growing obsolescence has already put the fair market value of a lot of this stuff at 0, rounding to the nearest $100K.
No, it’s a single family older Florida concrete block box. Port Richey, New Port Richey and Holiday are full of them, when I moved over here you could get one for $50,000. It’s exactly the sort of place I want to buy, except you can’t get there from here, and it’s flood and sinkhole prone and has to be evacuated at the drop of a hat. I give it another three years at the outside before the entire area is covered by the Gulf.
And that’s the problem. A lot of these great little homes, if they’re cheap, are in areas I don’t want to be in. We have little concrete block shacks like that around here, except people want $150,000 for them and prices in this area haven’t come down just yet. But soon we’ll be hearing “stop the pain” here, too.
Palmetto: same stuff around here: Jax Beach/Ponte Vedra off the beach 250-300, decent sections of Jacksonville with some land, where I’m interested (e.g., Lakewood/San Marco) 140-180, junky areas 75-100. Off 10-20%, and off most in junky areas.
“Much of Middle America – including most Texas cities – will dodge the worst of the housing downturn, the top Realtor economist predicts. Many areas of the country, including North Texas, are holding up well, Lawrence Yun, chief economist with the National Association of Realtors, said.”
So they dodge the motorcycle only to be hit by a bus. Like some of the books I’ve read about the Great Depression. “We were so poor we never noticed the difference.”. The midwest is kind of like that, they’ve had it so hard for so long that the housing “bubble” is just another dip in the road. It’s not like they won’t notice, it’s just that they have worse things to deal with. At least if someone in CA gets thrown out of their house they can afford rent. A lot of the folks in the Midwest don’t have a job or any hope of one, it’s not the difference between owning and “gasp” renting, but rather the difference between being self sufficient or going back with parents or on welfare.
At least if someone in CA gets thrown out of their house they can afford rent.
Actually, my home (SW Indiana) would rent for more than my PITI… It was cheaper for me to buy than rent.
This is a psychological issue right now.
As opposed to objective facts like “Buy now or be priced out forever,” and “Everybody wants to live the urban lifestyle in a condo in downtown Sheboygan/Binghamton/Pahrump/Caspar/Odessa/[insert podumk city here].”
And the sweet irony is that the physical is always so much easier to deal with than the psychological. Since it is a psychological problem (and was on the way up too) it will be nearly impossible to fix it. If nothing else it will take time and lots of it.
A funky cold Medina, of a market…
“‘Houses used to sell like this one, used to sell for like 195, now it’s only like, 175, 180. It’s like $10,000 or $15,000 less than last year,’ said Medina.”
“Much of Middle America – including most Texas cities – will dodge the worst of the housing downturn, the top Realtor economist predicts. Many areas of the country, including North Texas, are holding up well, Lawrence Yun, chief economist with the National Association of Realtors, said.”
Baghdad Larry goes to flyover card, prediction-wise.
FYI - The people whom own the Monarch plan (hope for dear mercy) to rent the one bedrooms out for $1600/month. Average Austin rent: $739/month. Good luck guys!
LOL. You can get nice 1 bedrooms in Marina Del Rey, CA, a few blocks from the beach, for close to that.
Yeah, I wondered about that. You could get a 2 or 3 br house in a nice area for that when I lived there. Plus, I still maintain that the real market for downtown Austin condos is mostly barflys.
There is actually some demand. Law firms and lobbyists have bought some of the upscale places for clients / corporate homes. It does make sense since we are the state capitol and have both a federal court and the state supreme court here. However, after a few sold, the developers went nuts and started to build by the thousands. Now we have over 3500 downtown units in construction and another 3000 in the permit system. If everything gets built, we’ll have a lot of empty buildings.
The sad thing is, we could have used the downtown area for office buildings which would have supplied a resource for an employment base. Now, all we will have is half empty condo buildings.
I’m going to be in downtown Austin on Monday for the first time in years. I’m sure I’ll be horrified. What the hell, I’ll swing through downtown Waco on the way back and pick me up a condo!
Our new luxury condo development next to the Washington State University campus has sold 2 of twelve units so far (one year on the market), and both (small 3/2) are listed for rent at $2500/mo.
Problem: In Pullman, you can rent an entire 2000 sq ft house with a yard in a great neighborhood for $1500/mo. Student rentals run $900-$1000/mo for nice 3/2 apartments. Who the heck is doing the math on these luxury condo “investments”?
$1650.are they smoking dope? i pay $1150 in queens and i had a view of the WTC..on 9/11
From Today’s Austin Business Journal:
Thursday, November 15, 2007 - 11:20 AM CST
Austin foreclosures up 12 percent in past quarterAustin Business Journal
The foreclosure rate in Austin climbed more than 12 percent in the last quarter, making this one of the many U.S. markets where foreclosures are rising amid the ongoing credit crunch.
There were a total of 3,063 foreclosures filed in the third quarter in the Austin/Round Rock area, or one filing for every 193 households, ranking this 44th out of the top 100 U.S. markets in terms of activity. The number of foreclosures rose 12.2 percent over the second quarter, according to a report from RealtyTrac.
The picture is a bit worse in the other Texas markets. In Dallas, ranked 22nd on the list, one out of every 102 homes is in foreclosure. San Antonio ranks 35th and Houston 36th. Foreclosures are up 17.9 percent in Dallas, 29.6 percent in San Antonio and 59.1 percent in Houston.
Someone please help me with this, it can’t be right. Does this mean in Dallas, one out of every 102 homes with a mortgage is in foreclosure, or one out of every 102 homes? I’m from Dallas, my parents are in Austin, and I’m living in DC right now, counting the days (probably at least three years) until I can get back. What happened over there?
‘What happened over there?’
Well you see, there’s this housing bubble, and it’s in a lot of places nobody suspected
Everywhere is going to return to sanity. Most places will overshoot their historical medians. Where this market is going is rather scary. But as a renter I can relax and ask:
Got popcorn?
Neil
I flew into DFW recently. The amount of home building was astounding. Houses are not good investment in Texas. Dont be fooled by the relative cheap prices in Texas. Housing prices went up in this area, just not as much as the rest of the country. That does not mean prices will not go down.
Yah, but the specufestors will be talking about how they ‘only’ lost 50k in Dallas and will be viewed as geniuses by other financial lobotomites.
The issue with building in Texas is there is plenty (and I mean plenty) of cheap land on the outskirts of any city. Texas love to build roads so, transportation is not an issue nor is water availability. Finally, urban planning in many suburbs is considered an outright menace so there are few if any regulations. A builder can literally throw up boxes in record time, get first time buyers in on cheap financing and move on to the next farm field. The only problem is when too many builders pile in - but that has not happened since the mid 1980’s.
Within 6-7 miles of downtown, prices are up as much as any California bubble city.
I was kinda wondering about that - I work in downtown, so buying something further out (where it’s actually affordable) would be painful. The traffic on the toll road has gone nuckin futs. I looked at stuff inside the loop, and for an area that you might actually want to live in, the prices are ridiculous - as in sold for lot value = 450K.
I guess I either need to find another job, or put up with the commute.
Buried where you have to go looking for it:
Bay Area home sales dropped 36 percent in October
http://www.mercurynews.com/columns/ci_7471922?nclick_check=1
yup. Just read the DQ reports. Sales are down all around. But unfortunately, the area that I live in is just flat as far as depreciation goes. Irritating. Same damned story every time because as well all know, EVERYONE in the BA is loaded and rich…
The part about the bubble missing the Midwest seems pretty true here in Northeast Ohio. You can still get a 4-bdrm in a middle class neighborhood for $150 - 175k. Just like you could 3 years ago. Prices haven’t come down, but never went up much in the first place.
“Mr. Yun said many housing markets stretching ‘from the Rocky Mountain states to Appalachia’ have undervalued home prices and won’t be clobbered by dramatic price declines. ‘In Salt Lake City and Austin, Texas, for instance, we are seeing double-digit price appreciation.’”
Yun is wrong again! The double digit gains will soon be wiped out with double digit declines. Rapid appreciation outside of the normal appreciation fundamentals will soon be met with severe downward preasure on the gains as the end user refuses to purchase these overvalued properties.