Speculators Drop Their ‘Fortunes’ In Houston
The NAR has this press release with details on the speculator numbers. “Most investment home buyers are in the South, 38 percent of the total. Buyers in the Midwest and Western regions each purchased 24 percent of investment property, and the Northeast, 15 percent.”
The Houston Chronicle reports on that trend. “Drive almost any direction from the city center, and one thing remains constant: home building, and lots of it. While new-home sales are dipping nationally, builders are putting up, and madly selling, thousands of homes around Houston.”
“Charlotte Gilpin, a real estate agent, said builders trying to unload their unsold inventory are offering plenty of extras. One company is letting buyers choose between a swimming pool or $15,000 off the home’s price, she said.”
“Houston’s lower new-home prices are enticing to a wide range of buyers. This year, Gilpin has seen an increase in buyers from out of state looking for investment properties. She’s already sold five homes to Californians who bought new homes here with the fortunes they made selling their West Coast properties.”
“‘They’re just blown away at the square footage and the kinds of houses they can get,’ she said.”
“Builders use a variety of techniques to turn a profit in this tough market. Trendmaker avoids shrinking profit margins by building higher-end homes. The majority of the new construction has been in the entry-level market. ‘That’s where there’s more of a blood bath in the margins,’ Holder said. ‘We’re not doing anything below $200,000.’”
“Rising costs for land and materials are shrinking profit margins in Houston’s booming housing market, where competition limits price increases, and a couple of builders are leaving to focus on other cities.”
“‘Lack of barriers to entry in this market leads to high competition, which in turn drives a high use of incentives,’ Richmond American Homes said in an e-mail responding to questions about its exit. ‘Consequently, margins are low, thus driving the need for high volume in the market.’”
It is unlikely these Californians have all decided to move to Houston, so they are probably betting on appreciation. But if the builders are having a hard time making a profit because of the ‘Lack of barriers to entry’, buying a new house to rent is a ‘no-brainer.’
Make a profit? Don’t make me laugh. The only question is how much money they’ll lose. And I am sure you’re right that none of them are moving to Houston. After a couple of days of fleas, roaches, rednecks and unbelieveable heat and humidity, that 900 square foot casa in Watts would look pretty sweet again
Houston sold a lot of houses last year, yet the for-sale inventory only went down from 45,000 to 40,000. Good luck unloading the rent house in that standing glut.
Plus the elephant in the living room is the absolutely abysmal quality of the cheap homebuilders down there. I’m telling you, you could blow most of that junk over in a stiff breeze. It’s cardboard, glue and bailing wire and that’s about all. If they can sell a 3000 square foot “house” for 180-200K and make money on it given the cost of building materials today, what does that tell you?
I don’t think you can make blanket statements like that. The home quality in the Houston area is objectively outstanding, and when compared to the junk Toll Brothers puts out, magnificent.
Builders down there such as David Powers build well-designed, well-built, and architecturally stunning homes. Here’s their website:
http://www.davidpowershomes.com
I certainly can. I lived there for 17 years.
When was the last time you’ve been back? My assessment is from this year. I don’t know about the quality at the $100K price level, but all the homes I looked at priced above $250K were high quality, and homes priced $350K and above were simply amazing.
And I should know how to evaluate quality, as I’m a former high-end remodeler.
Architecturally stunning? I went to that web site. Looks like every other tract house piece of crap out there.
To each his own, I guess. Big “luxury” builders such as Toll Brothers produce homes that are about 10% as nice as what David Powers builds.
What other builder produces nicer a home for $350K?
please do not feed the trolls.
“Crapboxes” is putting it nicely. All show and no quality.
“Roachboxes?” Or how about “Roach Hotels?”
Are we allowed to feed roaches to the trolls?
I dunno, but they look pretty nice to me. Far nicer than the equivalent Toll Brother’s house in NoVA (5000sqft scaled-up colonial giant box, fake brick on front, sagging vinyl siding on the sides).
Does not matter what the builders do, the quality of the materials have dropped over the past decade. Well installed
paperboard siding is better than poorly installed paperboard siding , but its still junk.
I need to agree with UnRealtor. I guess it depends on what/where you are trying to compare, but the Houston homes (&Austin, San Antonio, etc.) are so much better built and finished than anything comparable in the Phonex market and especially Florida.
and the roaches fly…and are the size o’ Texas
Oh, Jeezuz, you just brought back one of my worst childhood memories. I was a cheerleader in high school and one evening, one of those monsters dropped off the bleachers and down the front of my outfit. I screamed so loud they nearly called the police. To this day I am absolutely terrified at the mere sight of one of them.
lol…and you know that those buggers hate light so when i would come home late at night, flick on the outside light while fumbling for my keys and SWARMS would fly all over me!
Ah, the memories….
let’s get back to the roaches. they’re the big man-eaters.
do any of them fly?
or i could just read txchick’s prior post about the flying thing……
gawd that’s creepy, huge flying roaches
—you could hear them crunch under your feet when you walked outside at night.
Listen Missy…you should welcome these transplants. They’ll add to the local economy better than an unoccupied house. Video and liquor stores will flourish. A warm, fuzzy welcome from you would be nice.
And another thing, everyone knows houses in Watts are over 1100 SF when you included the converted garage/ master bedroom. duh
unpermitted, of course
The Houston market is different, as there’s virtually no appreciation.
However, you can buy a brand new 4,000 square foot house, all brick, arched windows all around, Sub Zero appliances, 3-car garage, great neighborhood, great schools, and a 45 minute commute into the city, for about $350,000.
We flew down there to buy (and live), but the job market is less robust than in the NY City area, so we didn’t make the move. One place we looked at was in a gated community, overlooking a golf course, fully loaded house, and was $370K. That would be 2-3 million in the Northeast.
What you can buy there — TODAY — is stunning, and there’s no need to wait many years for this crazy bubble fully unravel.
Yeah, let’s talk after you’ve spent 6 months in that hellhole.
And that builder’s site which you linked - no thanks.
And Sub Zero refrigerators are crap. If you don’t believe me, go onto egullet.com (a forum for professional chefs) and ask a few of them.
“Yeah, let’s talk after you’ve spent 6 months in that hellhole”
Hahaha, yeah, you hit hit the nail on the head! Personally I wouldn’t give it one month in August.
lol…you are right, I lived there for 15 yrs…got spoiled visiting my relatives in SoCal during summers so I moved out here…
You are also right about Sub-Zero fridges…my buddy’s sister bought one and the damn compressor went out one day (only 3-4 yrs old) so they had to put all the foodstuffs in the 15 yr old Amana (still runs like a champ) in the garage!
I’m sure a builder will gladly replace the $4,000 Sub Zero fridge with a $400 Amana fridge, upon request.
I had a friend who had a 20 year old Sub Zero in a condo she owned. It died as she was trying to sell the condo. Because it was built into the kitchen, she couldn’t replace it with a $400 new Amana or Frigidaire, and had to pay $1200 to fix the 20 year year old fridge.
I had a friend who had a 20 year old Sub Zero in a condo she owned. It died as she was trying to sell the condo. Because it was built into the kitchen, she couldn’t replace it with a $400 new Amana or Frigidaire, and had to pay $1200 to fix the 20 year year old fridge. I will never buy a house with a refrigerator that costs more to repair than to replace.
Fair points, but most kitchens with a built-in Sub Zero would look ridiculous after replacing with a ‘normal’ Sears fridge.
Sub Zeros are not value products, they’re design products that perform good (when they work) and look spectacular.
Stainless steel fridge is just a regular fridge with a $10.00 sheet of Stainless on the outside, same plastic interior, same motor compressor
Trust me…they won’t make it until August.
You seem a very angry, bitter woman.
We were invaded by a lot of civilians this past winter, we have never never never had nicer weather, a lot of “them” bought houses while “visiting”.
They are in for a big surprise.
I ran in to a nice lady from O.C. last week, she bought a 5700sq foot house, we spoke for a while, one thing:
she rather go through an earthquake than have to evacuate again, when she moves back to California I will beg her to take me with her.
TXchick57,
Pay no attention UnR….
After reading your series of posts-…I want to propose!!!!!
LMAO!!!!!!!!!!!
I just laugh at him. He’s obviously a salesman for that junk builder.
LOL, angry, bitter, and paranoid.
Someone who disagrees, and who cites an example of a top-notch builder is a “salesman”?
Or am I a Sub Zero salesman too?
Lighten up, life is short, no need to be angry and bitter all the time.
If life is so short, then why on Earth do you want to sell “Roach Hotels” for a living?
He’d be angry and bitter too if he were an architecture buff and was instructed to look at these “architecturally stunning” homes, only to find the love children of Faux Tudor and Terrible Tuscany on that page. My god, could those be any uglier? Of course, that is what sells to the great unwashed who want to build a monument to their [debt financed] majesty. And by GAWD, you gotta have that Sub Zero even though it’s a total piece of junk and those big arched window openings which contain the cheapest Home Depot windows they can find! It reminds me of that line Steve Martin says in, “L.A. Story” (a truly underappreciated movie) - “you’re not anyone in LA. unless you have a REALLY big door.”
I actually moved from San Diego to Houston in 2002 and lived there for about 3 years. I guess it takes a certain person to really enjoy it, but I did. If you like a relatively low cost of living, big city amenities and don’t mind the heat/humidity (usually the main issue) you’ll be fine….hell I enjoyed running in August (not the distance I would in SD of course). As far as the quality of construction I’m far from an expert, but I doubt there is a big difference in quality just b/c it’s H-town, costs cut into profit regardless of the locale. I live in a 60 year old house in Denver now….and the quality of the structure I doubt is even remotely matched by the new construction in areas like Lowry and Stapleton. When I’ve had work done on the house the workers have commented on how these jobs are a bit more work b/c in places like Stapleton they can just drill thru exterior walls like nothing. I will admit though, if I moved back to Houston I would probably try to find an older place in West U. or the like for both construction and location reasons…the same reason we live in Park Hill in Denver.
At 4000 sq ft be prepared for one whopper of an airconditioning bill and also be prepared to have to replace that crap airconditioner the builder installed in about a year, right after the waranty runs out………………
All the builder units I saw were either Carrier or Lennox.
Two zone minimum, sometimes three.
From speaking to someone who in the last few years who has moved to Texas air conditioning although a big concern is the least of your problems moving there he mentioned something about swarms of bugs and that was enough for me to know Texas is a no-no
I’ve never heard of anyone complaining about air conditioners or the quality thereof (they’re usually pretty high quality units)….I have heard complaints of the $650/month a/c bill though. We had a 3000 sf place (single floor…big difference) that ran about $300/mo. from June to September (utilities ran about $80/month on avg. the rest of the year) but know of folks with 4000 sf/2 story places that reach into the $650/month range thru the summer.
I am not familiary with Houston, but your observation is true of Dallas. What costs 500k to $1M here would easily go for $2M - $5M in many other parts of the country.
My family lived in the Houston area during the early 1990s. We lived in a 3800 square foot home in a beautiful planned community. The house was unbelievable for the money. However, the property taxes, insurance and home maintenance costs were prohibitive. People moved often to a new home so that someone else would have to pay the deferred maintenance. Houses in the 7 to 15 year age bracket needed thousands of dollars in repairs. This accounts for the fact that there is no appreciation in home values. However, we found that life was good in Houston-good people, schools, entertainment etc. Just don’t buy more house than you need.
Slightly OT, but I spoke with a Beazer sales guy selling North of Dallas who claimed to have sold 43 homes in February, most to out of state investors from Utah. I had heard about out of state investors buying in DFW from lots of places, but not from Utah. Beazer, by the way, was offering fairly significant incentives (8k to 20k) and a realtor bonus of 3k on top of a 3% commission. Even with the incentives, commissions, and bonuses, there is nothing worth buying; i.e., nothing that will yield a monthly rent for anywhere close to 1% of the purchase price.
Pulte, the builder I usually deal with, apparently is managing their inventory better as the raised prices 3k as of April 1 and are not offering any incentives.
A stuck Utah flipper ownes the house next to me. He is pouring a few thousand into a paint job, but it’s too late in N AZ.
I think many people see the cheap home prices in Texas and don’t realize that the property taxes there are realtively high (Texas has no state income tax). When I lived in Austin propery taxes were 2.6% of the home’s value, and the appraiser is not conservative.
I left SoCal last summer and had several acquantancies who were playing the RE speculator/flipper game. The amazing thing is that most of these people, despite their education, are plain out stupid regarding RE investing. They literally have been blinded by the Housing bubble in the West and just assume that it will occur in all the other markets as the bubble “shifts” to the next market. They salivate as they look for the next “hot” area to speculate in and make the riculous assumption that they are onto something clever when they “discover” what they feel are underpriced homes to “invest” i.e. gamble on. I also am amazed that they will buy these homes without even bothering to make the trip to check out the area. I guess plane tickets, hotel, and rental car cost “real” money, whereas they can speculate in real estate with 100% financing and are sure to double their money in a year as everyone finds out Texas is a good deal and drive the prices up!…right? Boy, wait until they get their first Houston prop tax bill (about 3.5%) and they add that to their neg cash flow rental.
OT! I need your opinions as I am at a cross-road. Found a ranch-style home that has been on the market for over 90 days. Started out at $1.25M and recently reduced to $1M. It was over-priced from the beginning by about $150k. I came across this house just by chance last weekend from the abundant open houses. I usually just grabbed a flier just to check the market. This particular house I came in to look at because of the huge price drop. I reallty like the house and am thinking of putting in an offer at $750k. Should I submit an offer?
Location, location, location?
If you’re not embarassed when you submit your offer, you’re offering too much.
I will not be embarassed at all. The worst that can happen is that seller ignores the offer. My agent is ready to submit the offer for me. Hell, if anyone that should be embarassed, it would be him and not me.
This property is in suburbs of LA. I am not playing around with teaser rate. I just don’t know how much lower it’s going to get. If we roll back the price to 2000, then this property would fetch about $400k. Do you guys really think we will ever return to those prices again?
The only risk is the realtor telling some sucker “we’ve already got an offer so you’ve got to do better.”
“The suburbs of LA.” is a tad vague. IMO there ain’t nothing in Riverside or San Bernardino counties that are worth the risk you present. I don’t think there are any properties in OC or VenCo that are price reduced this much. Nice parts of the Valley, stable parts of the Westside this might be a good idea.
Go talk your local honest, ethical appraiser…He can help answer your question. Cost ya maybe a couple c-notes.
Might save you thousands.
I suppose if you can afford that kind of money, go for it. If you aren’t playing russian roulette with an I/O ARM or something, have at it.
But for that kind of bread, I think I’d rather have a custom home built, or sit on some savings and retire earlier, etc.
zipost-
Absolutely DO NOT make an OFFER. I doubt its going to get snatched up soon. Why would you buy in a declining market and commit financial suicide? Offering anything will get you to compromise, trust me, the emotions take over.
You are right about the emotional aspect of it. I can’t get rid of this house out of my head. For the past couple of nights, I have been thinking what I can do to this house. How about if I stick to my gun at $750k? Realistically speaking, the chance of the seller agreeing to anywhere less than $800k is zilch to 5%.
In Talbott’s new book he says RE will revert back to 1997 prices in todays dollars, meaning whatever the price was in 1997, mark it up for 9 years of inflation and there is your starting point, give it a try. If he wants to sell bad enough he will at least counter. Good luck.
If you have done the research and feel it’s worth 1.1 M, and have the resources to pay 750K for a home w/o risky lending, sure, why not?
I am not sure anyone has a better crystal ball than you. At least you know the area and did your homework. All of us here is guessing with 0 information about the neighborhood and your finance. Go with what you feel.
“Go with what you fee”????? Isn’t that what got us where we are?
To the prospective buyer: DO NOT buy now if you’re looking for ROI. We’re on the other side of the curve.
Let’s not forget that your $750K purchase would immediately become the most recent comp for the neighborhood. Who would then buy into a neighborhood where prices were declining so severely… and what would that do to prices.
It was a viscous circle on the way up, and will be one again on the way down.
Straight numbers, if you could rent the house for less than $3600/mo then renting is probably a better decision. This presumes that in 10 years you have 0% appreciation and put 20% down and that you are in the 32% bracket and get a 30 yr fixed mortage.
If renting costs less than that, you have to ask yourself if owning a home is worth the difference. That’s not something we can answer for you, but say a difference of $1000/mo or more in housing costs results in extras. Will those make you happier than owning or less happy?
If 750-800k is as high as you want to go and the market was 400k in 2000. I would start out at about 600K thats giving him “roughly” 6% appreciation per for the past 6 yrs. If he gives you any play on the offer by the time you get to your magic number of where you want to buy you’ll be thoroughly disgusted and the chances of it becoming an emotional buy will be slim and none.
IMHO, that house will be $400K again, if not less.
Why? Busts that follow booms overcorrect to the downside, and this has been the mother of all booms. Don’t even get me started on external factors that’ll exacerbate the fall…
(Trendmaker avoids shrinking profit margins by building higher-end homes. The majority of the new construction has been in the entry-level market. ‘That’s where there’s more of a blood bath in the margins,’)
Another example of why the median price of homes that actually sell goes up in the early stages of a bust, as the entry level buyer disappers. Also why you are better off buying a house built in a bad year for building — better construction.
A co-worker has been outbid on 4 houses in Cedar Park TX…a burb outside Austin with horrible traffic, people, and chain restaurants. All 4 were bought by CA investors. These are 1600-1800 sq ft new constructions…they’re now on the rental market for $2000-2700 a month respectively. That shows they have no clue about the housing market in TX. Rents in CP for similar houses shouldn’t set you back more than $1500 at the absolute most…most rents hover around $1000-1200.
Jeez. Can you say clueless???? I think the only places in Austin that can support those kinds of rents are in downtown.
My brother-in-law is a project foreman for Pulte Homes in Austin. He says the other day this CA investor came by and bought an entire street of newly-built or soon-to-be-built homes. Crazy!
let me guess…it was Jeff from this forum. http://www.websitetoolbox.com/tool/post/sdcia/vpost?id=1031635
The Cali idiots are also trying to get outrageous rents in the Dallas suburbs. It ain’t happening, don’t worry about it. $2000 in Cedar Park? LOL!!!!!!!!!!!!!! I don’t think so! Try less than half of that.
Actually, we sold our home in Cedar Park, TX (Nov ‘05) for $50k loss and the rent of 2k+ is about right. Our carrying costs (PITI) were $2,700 per month.
Some places are pretty expensive: see new homes in Cedar Park
No way will they get anything close to 2k.
I have been reading this blog for well over 2 months now and I thought I should stop reading and contribute. My wife and I have been searching for a home in the Phoenix area. After reading all the info on the bubble we decided to sell and then rent and just see what happens to the housing market. After visiting and revisiting several new developments in the West Valley, we are beginning to a trend.
I made a visit to Centex homes in the far West Valley. We asked one of their realtors about incentives and she said anywhere from $30,000 to $70,000 off spec homes!
We paid a visit to Ryland homes three weeks ago and they were offering $15,000 on spec homes. Went back to the same community this past Monday and they are now offering $30,000 on not only specs but also new contract homes. Another developer in Buckeye is offering as much as $20,000. The discounts you have all talked about are now in the works in Phoenix. Things don’t seem much better in Queen Creek. The same Buckeye developer is offering as much $45,000 dollars of their specs. Let me know I can list the URL. Hope this helps!
Good move renting. But don’t get eager when “it seems” that prices can’t go lower. This will take several years.
Wait for the Time Magazine cover that will say something like, “Will Anyone Ever Buy A Home Again?!”
Ah, the west valley is interesting… The pretty new developement, sports arenas, lakes, golf courses, and only ONE clogged freeway to central phoenix serving half a million people. Just be sure you don’t have to drive thru Maryvale, soon to be, if not already, one of the largest slums (50+ square miles) in the United States.
Queen Creek inventory is almost 2400 and rising. Crappy place to live. Give it 18 months and then see what kind of deals you can get.
Up a creek Royally, so at least the name fits
Sign a long lease so you won’t be tempted. In another year or two you can name your price. In the meantime you can draw up a set of plans and some decent specs for some quality construction for you custom designed beauty.
Not a bad idea. I will definitely look into that.
My wife and I have been pondering a question. At what rate will a 30yr fixed mortgage be in year or two? I know that’s a tough one to guage. I just don’t want to wait until prices drop 30-50% and then have a mortgage at 10-16% like in the eighties.
Interest rates may go up. I don’t know how high or how fast but I expect there will be a window of opportunity. On the specs, use embedded anchor bolts, roof ties, get some 1/2″ cd plywood sheating for walls and roof outside, some high grade energy efficient windows, and insulate it like a madman.
Big Papa,
(Disclaimer: I worked in the mortgage biz in the early 90s) In 2007-2008, I would expect 30-year rates in the 7.0% to 8.5% range; a noticeable increase from today (6.375%ish), but not that huge. There will be a lot of pressure on the fed NOT to repeat the rates of the late 70’s, early -80’s.
Where I expect greater action is in the tightening up lending terms. Those rates will be for 20% down, flawless credit, a truck-load of highly audited documentation, and a throughtly inspected and researched property. The hard part will not be so much the loan rate, but getting the loan.
If you can wait out a 30 to 50% price drop, then buy on 20% down, no PMI, and 15-year fixed, you should be way ahead in terms of how much you commit from future paychecks.
Thanks for the info guys. Now we get to sit and wait.
I would wait all real estate in the US will be going down even more, we are only in the very beginnig of the bubble, there is allot more air to be let out before we all see the bottom of the market. As for Houston, Tx. and Texas in general there is very little appreciation like California but with California money pouring into Texas it will surely artifically inflate the market………..then someone again will get left holding the bag……..cannot sell higher or for even the price they paid for the house.
‘Consequently, margins are low, thus driving the need for high volume in the market.’
Herein lies a key reason why those who say “Homebuilders will keep profiting in a weakening market, and thus those homebuilder stocks’ valuations will hold their ground,” will be proven wrong. To keep those profits anywhere near their current levels in a world of weakening demand and increasing costs (i.e., weakening supply), it is necessary for them to build more quickly. But there is already a supply glut out there, and building more rapidly will make it explosively worse. The result will resemble what happens when an SUV driver puts the pedal to the medal as he approaches a brick wall.
Timing a short sale? I expect a good bump up after 1st quarter results, which won’t tell the story of what’s really going on. An opportunity in the making.
Headline said “Speculators drop their fortunes in Houston” - please change to “Speculators dropt their pants in Houston”. LOL
*drop
I have also seen new/under construction houses bought by investors, usually 3 close together my thought was; Are they expecting a bunch of families needing shelter? Like the ones that will soon be foreclosed on?
it is truly amazing how many can not even pay part of their property taxes, then again maybe they did not know how much 3% is.
zipost-
This is an engineered housing bubble, well actually a finance bubble and no property is worth being upside down on, Taj Mahal included. Even nice homes in Ventura County (SO CA)aren’t moving well, if at all. You’ll be upside down and regret the emotional decision. Your property tax bill will be exorbitant, coming down slowly after the value of your property goes south.
Keep in mind the U.S. is seeing a decline in our standard of living, and poor countries don’t have high real estate prices.
We are living in a rental, after selling a 4,000 McMansion. Us smart ones are sold, waiting this out. Its your money, but you should read “Sell Now” by John Talbott (Jan. 2006) before you commit to overpaying, IMHO
In the last “correction” (1990’s) our home went down $250K (Ventura County- 2200 sq ft), and this time that will seem like Petty Cash IMHO.
Truth from a broker! Thanks!
Thanks guys! I too sold in the Summer of 2004 and have stocked away the cash in CDs with the last 6 months earning at a decent rate. I just can’t stand renting as I am watching my 2 babies growing up in a crappy house that I am paying $2000/mo. The carpet is like paper thin and the landlord would not change it. Sometimes I feel like just paying for new flooring myself.
This 2300sf house is actually not in Riverside or San Bernardino. It’s only 20 miles from downtown and sits on top of an acre in the hilltop. I am really tempted and am meeting an agent today at the property. My heart is pounding even while I am typing these words. Never in my life would I consider buying a 3/4 million property. But here I am considering it. I am not looking to invest or anything in that sort. I just want to be a home owner again but just don’t want to get buried too much. I can tolerate a little loss in equity as time will smooth things out again.
In any event, I just don’t think they will take $750k for it.
Good luck…you never know…
One more thing about Houston, as well as the rest of Texas…. Have you seen the foreclosure rate in TX? Even during the boom, foreclosed properties were a dime a dozen. I can’t imagine what it will be like in a couple more years.
I lived in Houston for over 8 years in the West U area. I now live in SD. Everytime my significant other mentions moving back to Houston, it only takes a flicker of past memory (heat, humidity, traffic, man-size roaches, lack of parks and outdoor attractions, etc…) to push me into depression.
“Charlotte Gilpin, a real estate agent, said builders trying to unload their unsold inventory are offering plenty of extras. One company is letting buyers choose between a swimming pool or $15,000 off the home’s price, she said.”
The problem is the sq. ft. people are getting in these manufactured homes. Straight line winds just crippled a high rise here in downtown Indy. You don’t even need a tornado to take out an entire neighborhood…just very, very strong winds. I have been told that these cheap homes by CP Morgan and Beezer will likely be falling apart in 20 years…I guess we shall see.
While I wouldn’t mind the sq. ft., the only way I would buy one of these homes is if I had a basement. To live in one of these pieces of junk on a slap or even a crawl is very risky to me.
“‘They’re just blown away at the square footage and the kinds of houses they can get,’ she said.”
Here in Houston, you can’t have a basement- the water table is too low, but building codes help make sure things stand up to wind. Hurricane bracing is required if you are close to the coast. During hurricanes, with the exception of Galveston, it is falling trees etc., that have done most of the damage to homes.
Another thing that was previously mentioned, are that we have pretty high property taxes here. Houston’s are higher than Austin’s. The tax rates in the Houston area tend to run between 3.5-4.3%, and you can count on a 10% increase in appraisal by the county each year. Then add in homeowners association fees, etc., and I have a hard time seeing how anyone from CA will end up with much of a bargain with the lower appreciation here.