Drinking The Kool-Aid In Texas
The Dallas Morning News reports from Texas. “In the Dallas-Fort Worth area…at the end of February, about 43,000 homes were for sale in the Realtors’ MLS. That’s up only about 2,000 listings from February 2006. North Dallas and the Park Cities, which have so far seemed bullet-proof to the housing downturn, both saw a 28 percent jump in home listings during the first two months of 2008 compared with the same period of 2007.”
“‘There are 150 houses over $1 million in the Park Cities area, and they are not moving as swiftly,’ said longtime Dallas real estate agent Virginia Cook. ‘There are some speculative houses that are $15 million.’”
“It is unclear how many of the more than 19,000 homes foreclosed on in the Dallas-Fort Worth area last year are still on the market. Also, there are almost 10,000 unsold new houses on the market in North Texas. Some analysts have said builder price cuts on these properties have been a significant drag on the pre-owned home market.”
“During the first two months of 2008, median home prices in North Texas fell 2 percent to $138,000, according to the latest statistics from the North Texas Real Estate Information Systems. That’s down from a peak of about $155,000 last August.”
“For all of 2007, total pre-owned home sales were down about 8 percent last year in North Texas, ending a string of record sales totals.”
“‘The bottom part of the market is pretty overbuilt right now,’ said D’Ann Petersen, a business economist with the Federal Reserve Bank of Dallas. ‘So we have seen some pretty heavy discounts on those as builders try to get that inventory down.’”
The Star Telegram. “North Texas new-home sales during the first three months of the year dropped 31 percent from first quarter 2007, according to figures released Thursday.” “The drop in sales has prompted builders to pull back on construction: Builders started 5,207 homes during the quarter, down 35.3 percent from the 8,053 started in the first three months of 2007 and less than half the 12,370 starts in first quarter 2006, according to the report.”
“Construction this year will be well below the record of nearly 50,000 home starts in 2005 and 2006.”
“‘The Texas market in general I would not necessarily say is strong, but relative to other markets, it is in much better shape,’ said Stephen Bedikian, partner and research director at Real IQ.”
The Pegasus News. “Residential foreclosures continued to rise across North Texas this month, with Denton County’s foreclosure rate 40 percent higher than April of last year, according to recent statistics.”
“April foreclosures rose more sharply in Denton County than any of the other 10 North Texas counties surveyed, leading by at least 17 percent, according to Foreclosure Listing Service, Inc.”
“‘A lot of people went into home ownership who shouldn’t have,’ said Bernard Weinstein, director of the center for economic development and research.”
“Weinstein said many people bought homes in 2006 with ‘teaser’ interest rates. Weinstein said 25 percent of all North Texas loans in 2006 involved such a rate and foreclosures will rise even higher in 2009 when homeowners will face an increased interest rate.”
“Real estate agent Brad McKissack said most foreclosures were in areas of new development along the Highway 380 corridor between Aubrey and Frisco. McKissack said his realty has noticed the foreclosure rate in Denton County since September 2007, but the number of foreclosures in Tarrant and Dallas counties remains higher.”
“‘I still think we will see them in abundance over the next two to three months,’ he said.”
The Amarillo Globe News. “Amarillo’s median home prices rose 11 percent, comparing sales in the fourth quarter of 2006 to the same period in 2007, according to National Association of Realtors data.”
“‘An 11 percent change in a quarter, that could just be a volatility issue,’ Amarillo economist Karr Ingham said, referring to Amarillo’s increase.”
“Better to compare longer trends, the economy watchers agreed. And those show Amarillo has seen smaller - but steady - home price gains, they said.”
“Huh? Smaller gains are better?”
“‘From my standpoint, as a matter of interpretation, I would not care to see 10 or 11 percent increases in home prices, year in and year out, for any sustained level of time,’ Ingham said. ‘And the reason is household incomes aren’t going up that rapidly.’”
“‘Prices going up that fast - and believe me they have in many markets - are the reason they’re crashing now. For home buyers, you have an ever-increasing percentage of your household income going toward your housing expenses. That’s clearly not sustainable over a long period of time,’ he said.”
“Lenders have tightened restrictions everywhere in reaction to the subprime crisis, so buyers shopping for a loan should expect more scrutiny. Builders have reacted by starting fewer speculative homes - those not pre-sold - to reduce the inventory they carry, Texas Panhandle Builders Association Executive Director Lew Bradshaw said.”
“‘I think it’s probably just smart business sense,’ he said. ‘The ones that were building 10, 12 specs at a time, they’re doing five or six, which is smart.’”
The Express News. “The national economic downturn has hit city government. While the effects aren’t fully known, the sluggishness that some label a recession will figure prominently in upcoming discussions about the budget year that starts in the fall.”
“While cities that San Antonio measures itself against face severe budget shortfalls and layoffs, the picture locally is sobering but not nearly as bleak, City Manager Sheryl Sculley said.”
“But she acknowledged that the community’s galloping growth of the past few years, as measured by the Federal Reserve Bank’s Business-Cycle Index, has slowed to a crawl in ways that will affect the 2009 budget.”
“Records show new residential building permits came in 53 percent under what the city had projected for the first quarter of 2008. As a result, city officials revised downward by 40 percent the number of new home construction permits it expects to issue for the year.”
“‘It looks like we went from a 100-yard sprint to a 100-yard jog, but at least we are still moving,’ District 10 Councilman John Clamp said. ‘Our rate of growth has decelerated.’”
“‘San Antonio is holding its position as the national and world economies go into the tank,’ said Trinity University economics professor Richard Butler. ‘We don’t live on an island, isolated from all that. But the ground we are on right now is pretty high.’”
The American Statesman. “Austin-area builders continue to cut back on the construction of homes, with first-quarter starts falling to their lowest levels since 2003. Starts for new homes declined 33 percent to 2,271, compared with first quarter of 2007, according to Residential Strategies Inc.”
“The number of new-home closings dropped 24 percent to 3,125. A similar slowdown is occurring in sales of existing homes, which dropped 10 percent to 1,553 in February, compared with the year-ago period.”
“‘Because of what’s happening nationally, we continue to see the deterioration of the market,’ said Mark Sprague, Austin partner for Residential Strategies. Though ‘we’re hearing about the market slowing down dramatically here, we don’t have a clue compared to the rest of the country. We’re still in our third-best year ever. … But it’s definitely off because of the national mortgage meltdown.’”
“Fewer homes are being built in Central Texas also because cash-strapped large-production national home builders are battling high inventories in other markets and are cutting back even in relatively strong areas such as Austin.”
“‘They’ve cut back across the board,’ said Ben Loftsgaarden, who follows economic trends for Angelou Economics.”
“Plans for an upscale, 1,400-home subdivision near Parmer Lane and the Texas 45 North toll road have been called off because of a national pullback by struggling Dallas-based home builder Centex Homes.”
“Centex has canceled its contract to buy 465 acres of the 750-acre Pearson family ranch, where it planned to spend $275 million to build one of the largest master-planned communities in Central Texas. The Pearson Place project was announced in February.”
“‘It was part of a larger strategic review of the company nationally,’ Centex’s director of strategic and operational marketing, Tara Thomason, said of the decision.”
“Centex isn’t the only company pulling back in Central Texas, which began as early as 2006, said Eldon Rude, local director for residential real estate market researcher Metrostudy.”
“‘The largest public builders are continuing to face significant challenges around the country, especially in California, Nevada, Arizona and Florida,’ Rude said. ‘As a result of that, they are looking to all of their divisions all over the country to take part in their move to conserve funds, and so even in some of the healthier markets, like Austin, they are looking to local divisions to buy less land.’”
“A high-profile arts-themed hotel and condominium project will be the first major project for the long-neglected Waller Creek area of downtown, developers announced Wednesday.”
“The 21c Museum Hotel and 21c Museum Residences, originally planned for Third and Brazos streets downtown, will be built on a new, larger site at East Cesar Chavez and Red River streets, along the banks of the creek.”
“‘I’m drinking the Kool-Aid about the whole Waller Creek area,’ said Steve Poe, CEO of the Poe Companies, which is one of the partners in the project. ‘This is the natural progression for the city. People gravitate towards parks and water, and that’s what this is.’”
“The hotel will be followed by a 49-story condominium tower with 295 residential units, and in the future, a 425,00-square-foot tower with offices and shops or more housing, according to the Poe Companies.”
“The condo tower would rank among the tallest being built or planned amid downtown’s residential building boom. A 55-story condo tower, the Austonian, is under construction at Second Street and Congress Avenue. And local developer Tom Stacy plans a 66-story hotel/condominium tower near Sixth and Brazos streets.”
“Austin City Council Sheryl Cole said the 21c project ‘begins to fulfill the promise that Waller Creek will become a world class destination. It is wonderful to already see a major return on our investment.’”
“‘This is like that proverbial place in Central Park in New York City,’ Poe said. ‘That’s what we’re creating.’”
If a borrower has to take out mortgage insurance in the absence of a 20% down payment, how do banks end up losing money when the mortgage doesn’t get paid? Does mortgage insurance cover only part of the loan?
re:mnant - mortgage insurance typically covers the ‘first loss.’ they’ll pay the loss up to 15%, 25%, whatever the policy says. And usually the smaller the down payment the bigger the coverage. A 10% down loan might have PMI for 15%, while a no down loan might have PMI for 30%. So if the PMI is for 20% and the loan loses 30%, the PMI company loses 20% and the owner of the loan loses the next 10%
I would like to point out that the Kool-Aid has long been delivered in public water supply of the Peoples Republic of Travis County, otherwise known as Austin.
I haven’t been to Texas in 25 years, but isn’t comparing some part of Austin, or any part for that matter, to New York City, a bit much??
Austin is more like Marin County. People still think of Texas as the JR Ewing state. Every countywide elected office in Dallas County is held by a Democrat. The elected sheriff of Dallas County is a lesbian Hispanic. The DA is a black civil rights lawyer. Two of the previous 4 mayors were Jewish women and the other two were a black male and very liberal white male. Dallas has the 2nd largest gay population as a % after SanFran. Things have changed, people. Get with the times.
Bleh. Any of this is a suprise?
“‘From my standpoint, as a matter of interpretation, I would not care to see 10 or 11 percent increases in home prices, year in and year out, for any sustained level of time,’ Ingham said. ‘And the reason is household incomes aren’t going up that rapidly.’”
“‘Prices going up that fast - and believe me they have in many markets - are the reason they’re crashing now. For home buyers, you have an ever-increasing percentage of your household income going toward your housing expenses. That’s clearly not sustainable over a long period of time,’ he said.”
How interesting that an Amarillo economist would so succinctly hit the nail on the head.
Got me singing….
Amarillo By Mornin’
Up from San Antone
Everything that I got
Is just what I’ve got on.
I ain’t got a dime,
But what I got is mine.
I ain’t rich, but Lord I’m free.
There’s a Yellow Kool-Aid in Texas which is the only flavor for me,
Lemonade in the form of houses, I watch them drink it up with glee.
We’ll be in the market to buy in Dallas later this summer (mainly because we want out of our particular rental, and are planning to be settled for the long haul). Price range is
Price range is? Don’t tease us.
I bet you he wanted to type “less than something”.
However, to get a < sign, you actually need to type <.
Cheerio!
You’re right - sorry, didn’t realize that would screw up the rest of the post! Anyway, meant to say price range was $170 - 200k ($70-80psf at 2100-2500sf). We have 20% down in that range and want to be very practical. Unfortunately, because everything is still somewhat overpriced here and I’m not willing to add extra costs for commuting farther, that limits us to 1960s or 70s ranchers. I know what the practical thing to do is, but it’s hard to let go of the “dream house” (same size, but newer, better electrical/energy-efficient/engineering/layouts) when those shouldn’t necessarily be priced so high in Dallas!
Whatever.
If I were you, I’d just wait a year.
Even if you’re popping out a sprog, it won’t know sh*t from sh*nola till it is three. When the rules are being changed monthly, and the financial system is cracking under you, the last thing I would be thinking about is a house.
Stability = ability to sleep in peace is key. It’s just a freakin’ house. It can wait. In any case, you don’t know what the “long haul” is. You could be fired tomorrow.
Chill, puppy, chill for at least a year.
In my Austin neighborhood, asking prices are up about 15% BUT the houses are mostly sitting there. A few yeas ago, you could buy a 1200 sq-ft house for about $140K. Then the home flippers bought like mad. The flippers installed laminate floors and real imported simulated granite countertops. Of course, these same flippers ignored the rotting masonite siding and the 10-yr old A/C system. Now, these houses are back on the market for $200K. The only problem is no one is buying.
Interesting. As a tech worker in the SF area, I’ve sort of had my eye on Austin for a number of years but was turned off by what seemed to be happening there, which was the same sort of bubblicious activity. That and prices began to skyrocket. A smaller reason I didn’t consider it was that I wondered how much locals would hate my guts when they found out I was another one of them”Californians” even though I’m actually from TN.
The interesting thing is that my second choice- Nashville- has also gotten bitten by the bubble. Just a few years ago, you could find nice old homes there for 50-75k. Not anymore. The same homes are now 250k, all driven up by what I assume are out of state speculators and East Coasters fleeing the cities.
So now I’m thinking Austin again since the proverbial “low” price seems to now be 150-200k. A stupid question I have for Austin Locals is about how far is Round Rock, Barstrop, or Lubock from Austin? Is it a doable commute or is it a nightmare? Also- I assume that anything near Austin is probably way overpriced? thanks.
“old homes there for 50-75k. Not anymore. The same homes are now 250k”
California bubble doesn’t look quite as bad as Tennessee.
Cinch
you got it! There’s no difference. Since 50k homes climbing to 250k doesn’t sound like much, that’s still a quadrupling of the lower end of the market, which regardless of price qualifies as a bubble.
My sense is that anyplace you can think about that sounds kinda nice has been bitten by the bubblicious bug. Everyone’s thinking the same thing.
Precisely. It’s such a knee-jerk reaction to think:”gosh, we can’t afford here, so let’s move to XYZ!” What I’m hoping is that those who thought that way were in the minority versus those who sold something for a ton of cash elsewhere and simply moved to XYZ because they sold their previous house. People are stupid enough to buy houses from one place to another versus renting for awhile, so I don’t have that dragging behind me.
The other thought I’ve had is to look into certain cities that have… crime problems. My Aunt lives in Memphis, TN, which apparently has one of the highest crime rates in the nation. But she lives in a really cool old neighborhood with old 1920’s Craftsman houses. I think she paid 35k for hers, and even now they’re selling for 100k or less. I’ve been there enough to know that 99% of the crime occurs on one part of the area while many others areas are fine. Locust families usually only want squeaky-clean white bread neighborhoods for their babies. I don’t have any, so I don’t care. So I might look into locust-family-proof cities.
There’s another definition term for ya Dinor! ” Locust Family”
“Everyone’s thinking the same thing” — that does happen with speculation. Interestingly, the “same thing” that everyone SHOULD be thinking is…let’s just rent! Slow sales everywhere probably reflect mainly the difficulty of getting loans, but a continuation of declining prices will bring more people into our school of thought, the “let’s just rent” school.
The funny thing is, if there is a mass migration to the “let’s just rent” school, that’ll be the time to buy.
Lubbock is hundreds of miles from Austin, so you would not be able to commute from there.
Round Rock is pretty much North Austin, but I don’t know many people who live in Round Rock and commute to Austin…ususally it’s the other way around, especially with Dell employees. Round Rock is awfully ugly, and most people in Austin would not choose to live there.
Bastrop is not a good commute, but if you were willing to put up with about 2 to 2.5 hours or so a day in total commuting, then maybe it would work out.
The commute from New Braunfels/Gruene wouldn’t be so easy, but that would be one place you might want to look, especially if you could get a good deal along the river.
Thanks for the info. Sounds like Round Rock is like one of the exurbs in the Bay Area- Stockton. So, if I were to say- move to Austin itself, is it still reasonable to find smaller type non-fancy homes for 150-200k, or are we talking 300k? Taxes there are high, so anything over say-175k gets me a tad worried.
By the way- I commute 3 hours every single day, so if that’s the case with Barstrop, I might look there as well. Also- my “ugliness meter” is tacked a bit lower than many, as for me, a decent home in a decent neighborhood is fine by me.
I live 15 minutes from downtown in NW Austin (well, 15 minutes with my driving in moderate traffic
My neighborhood was built in the mid-70s and you can still find 1500-2000 sq ft houses for around 200k. Prices certainly have gone up here in the past few years, but it appears they’re starting their descent.
I’m very curious to see how things play out in the Austin market, as we certainly have had flippers and equity locusts (from CA, among other places), but at the same point in time, as Neil has mentioned his company doing, other companies are moving offices or operations to the area. If that trend continues, it seems that demand for housing will grow a bit, and these are pretty well-paid jobs. (I actually just got an offer from a CA company expanding into Austin).
J
jetson boy,
If you’re looking for a home priced below $200K within 10 miles of downtown Austin, there may be some options.
If you look at a map of Austin, the city center is bounded by IH-35 on the east, and Mopac on the west….and then Airport Blvd to the north and Ben White Blvd (Hwy 71) to the south. The homes within that zone are going to cost more than $300K in most cases, but if you look just beyond that zone (ie, a half mile to the east of IH-35 or a half mile south of Ben White, etc.) then you may find a decent place for around $200K….let me be clear that I left Austin a little over a year ago and I was never in the market to buy a house, so I didn’t spend much time “window shopping”, but I still believe that these are good rules of thumb to apply when buying a house in Austin.
Round Rock houses probably go for as low as $130K in some cases….especially now that DELL has announced big layoffs….
One more bit of advise: I’d spend at least 6 months living in Austin before actually purchasing a home so you have enough to make an informed decision….
Another point to consider with hondje’s recommendation is that these outlying areas are pretty unbounded. There’s been a ton of overbuilding in round rock and pflugerville and the like, and there’s nothing to stop them from keeping on building as there’s so much empty land. While in the end this will affect the whole austin market, I personally wouldn’t care to be in a neighborhood where I’m directly competing with a builder.
er, by that I mean “directly competing with a builder” when trying to sell.
Thanks everybody for the great advice. I’ve noticed that for the past few years, there’s a lot of satellite tech operations there that seem to be growing in a robust way. I’ve also noticed that there are also quite a few Austin-born tech and design firms developing nicely. To me, it seems like a more stable living situation than Silcon Valley where you can’t keep tech workers around since they have to make so much in order to keep living here. That and I just like the area.Lots of music.
I don’t have any concrete plans yet. As long as my rent stays cheap and my job pays well, we’re going to rent and save for a few more years, then probably head on out of here. The housing market will be dead in the water for at least that long.
And we do plan on renting for at least a year in case we don’t like it or the job market sucks.
Yes, FWIW, Texans do hate Californians. They may or may not tell it to your face, but I would definitely play up that you’re from tennissee, cuz anything with a whif of the left coast will automatically be 2 strikes against you as you’re a foreigner. I’m dead serious. It’s one of those good ol boy things that’s never said aloud. When I live in Austin and worked for a long distance compnay we had a newhire manager that was from california, he was never really accepted and you’re just automatically a california freak that’s not to be trusted. The phrase “I hate Californians” will be thrown around, and expect people to purse their lips like they’ve sucked on a lemon when you tell them where you’re from.
Texans really love Texas, and will let you know for any reason. And tell you why you suck because you’re not one of them. And you never will be.
The interesting thing is most have never been to california or met a californian, its just a cultural distaste for all things west coast.
/rant off
I gotta say, that’s true. We moved to the NW outskirts of San Antonio this past August via the Miami area but we’re from So Cal. I’ve attempted to get involved with my children’s schools and make new friends and I have to say, when these Texas gals learn where I’m from, they’re real nice but they are also a little dismissive and clannish. They aren’t outright rude, they’re too polite for that, but you do feel a little subtle something. I realized they’ll never let me in. I was sad at first because we like all the Texas pride and nationalism and we chose to live here, we picked it. We didn’t end up here as a job relo or anything. Luckily, they are enough newcomers from other places outside of Texas that we can befriend. We really like it here and plan to remain but since I blew it and my kids weren’t born here in the great state of Texas, I realize it may be several generations before we’re taken into the fold, as it were.
JB:
Also considering a move to AUS (also techie, but fleeing the grays and bubble of Seattle). Been travelling to AUS on business/fun for years. Next year, headed with fam for good (me-hopes).
Off topic here, but might want to check out relocation forum @ http://www.city-data/forum/austin/ for answers to all your q’s… helpful Texans there.
I’m not an Austin local, but the area is proverbial elsewhere in Texas for frightful traffic.
Round Rock and Bastrop are for all intents and purposes suburbs of Austin now. Lubbock? it’s about a 6hr drive from Austin. Tough commute.
You want real cheap housing near Austin? Try Killeen or Temple. Both are about an hour’s drive north and right off the main highway. Many homes there for under $100K.
In rush hour traffic on IH-35, it could easily take 2 hours to get to downtown Austin from either Temple or Killeen….IH-35 really has bad traffic, even worse than Hwy 66 here in D.C.
The commute from Lubbock to Austin is a breeze.
Thanks for the “on-site” intel. I have relatives in Las Vegas that bought homes there as the rolling bubble rolled on. They were somehow convinced that they’d be able to “double down” and re-coup their LV losses. AFAIK they are still sitting on them. What a shame, I have a good friend from the Chicagoland area that bought a home there a few years ago and it seems like he’s been very happy in Austin (if you can stand the damn equity locusts!
Hey Ben?
There’s an idea! Can we patent an “Equity Locust Bug Zapper” and have Billy Mays pitch it on infomercials?
“Billy Mays here to tell you about the AMAZING… Equity Locust Bug Zapper! Why just plug this little beauty in as it attracts and ELIMINATES… all species of Equity Locusts!
But wait I’m not done, call now and I’ll DOUBLE the offer!
I think the problem for places like Austin, Raleigh, Charlotte, Atlanta, and so on is that you really have to look at it from the perspective of someone like myself where as of now, homes in my neck of the woods in the Bay Area, SF are pushing 575-600k, which is still better than the 620k they were going for a year ago. Even so, the prices are still fairly out of reach.
On the converse, the fact that I’m still seeing OK houses around the Austin area for 150-200k seems a lot more reasonable. I am not saying that no- these other areas didn’t get the bubble, but from the perspective of someone living in the mother of all bubble cities, I have to admit that somehow, 200k sounds a lot better than 600k.
That’s the problem. As long as places like Austin, which seems to be getting it’s own share of new-age hippiness- which almost always leads to gentrification- are priced so much lower than the large hell-hole cities on the coasts, they are going to remain appealing to people who find they simple can’t swing the prices where they live currently.
I hate to see it myself. My own hometown is also getting swamped with locusts. You’d think that the East Coast would eventually run out of people, but they just keep right on coming, from NJ, NY, MA, and so on. But I’m also thinking for the future of me and my wife, and if Austin keeps improving in the tech sector, I might just start thinking about moving there myself. Again- I know the locals will be thrilled to see one more of us CA bastards.
I’m giving it a few years though. I suspect Austin will see some reductions as well.
Austin’s been a hippy hole for a long time. Same thing going in here in Missoula. And it is nicer than a lot of other places, but I think more pricey than Austin.
Atlanta seems cheap. It’s not. At least not cheap in the areas you would want to live. Not SF prices, but a decent house in a safe area, will be in the $500K. And this is for a 1200 sq ft home. You want something 2500 sq ft or over and it’s $1M.
Now if you want to go to the burbs, you can get a 3000 sq ft home on 1/3 acre for well under $500K. However unless you also work in the burbs you will spend 1/2 your life in your car driving to and from work averaging about 12 MPH.
Huh? There are plenty of beautiful brick houses on big lots in reasonably close-in areas of Atlanta (the NE side of town inside the beltway in DeKalb County comes to mind) for $300-$400K. Half a million for 1200 sq ft? - that sounds like Georgia Tech neighborhood. Not at all typical of Atlanta prices.
I left California last August and moved just south of Round rock. I got a big brick box for $86 a square foot, $10K under the original asking price. You can purchase a home here cheaper then you can rent one. I have been following the housing situation for years but did not hesitate to purchase here. My pay went up 5% and I no longer give 10% to California so for me it’s a relative 15% pay gain and my new home is far less then my old rent. The locals don’t care if you are from California, the high tech company I work for is 25% relocated Californians. Wages here reflect that, leave SF you won’t regret the move.
There are also $100K homes inside the perimeter. I said homes in areas I would want to live.
Manny is correct, but he is referring to areas like Midtown, Morningside, Virginia/Highland and Buckhead, which are in fact Atlanta’s nicest intown neighborhoods. It is also true, however, that you can still get a decent 2000+ sq ft place in Smyrna or the areas mentioned by Paul-in-JAX for less than $400k. The commute from Smynings (Smyrna along the Vinings border) is not bad. Less than 45 minutes rush hour. Closer to 20 minutes non-rush hour.
I guess my other question is how”bad” are areas like Round Rock? I grew up not far from Suburban Knoxville, TN, which is about as urban-sprawly and hideous as you can get. But that doesn’t necessarily bother me as much as most people. I know that people in SF are snotty enough to think that the East Bay and Oakland are undesirable and that those in the East Bay think the same for outlying areas like Hayward and Antioch. But I’ve been to those areas and I’ve never felt like they were all that different with the exception of more shopping malls and less rich people, which is fine by me.
So, if you were to characterize -say- Round Rock, what are we talking about here? Suburban Mcmansion hell, or just a plain-jane outlying burb? thanks in advance.
Oh RR is fine, it’s just kinda low rent white trashy, but not meth lab white trashy. A friend of mine lives there, no gun shots or anything, but you may have a neighbor that thinks its OK to have old tires piled up on the side of his house or something. RR is pretty far from Austin if you ask me. It will be a little trip for you to go from there all the way to see music downtown.
I lived in Austin from 88-95, and at that time the market had sunk(oil bubble burst) due to overbuilding, etc, just like this time. Austin thinks it’s different, but it’s not. It’s just 8 months to a year behind the rest of the nation.
Lots of places that were *NEVER* considered part of the ATX (thats what locals call it) now are thought of as suburbs. Places like Buda. You don’t want to live in Buda.
The areas of new development are like any others, strip malls and no character. And did I mention *far* from things you’d like to do? They’re far. And cookie cutter garbage homes.
They’ll be glad to sell you their house at an inflated price and laugh all teh way to the bank at stupid clownifornians.
Whoever said locals don’t mind you works at a place that’s 75% reloacted californians. The 25% Texans have to pretend to like you, you’re giving them money. Duh. If you think people are happy to see you come here and price them out of the housing market and flash your money around, you’re wrong.
They will *really* not like you when the market turns sour and you’re living next to them. You’re to blame, don’t you know.
I lived in Texas all my life before moving to LA, I know of what I speak.
When they tell you they hate Californians they may say it wiht a smile, but they mean it.
Yeah, you pretty much nailed it….that’s kinda how I see Round Rock as well….it IS pretty far from Austin, maybe it takes 1 hour in bad traffic to get from RR to downtown Austin….but it’s not like Manassass, VA (D.C. exurb area), which is near my office and has more of a ghetto feel to it….it’s just boring, cookie cutter homes, strip shopping malls, and lacking in any really cool things to do.
But, like many on this blog have predicted, I could see a situation in say 5 to 10 years or so where lots of these exurb area like RR do turn in to ghettos…..I mean, poorly constructed homes + no sense of community + bad economy + layoffs (Dell) + bored teenagers = potential ghetto and not some place you should consider “snapping up” a bargain $130K SFH.
they bought house(s) in Austin after LV? You would’ve thought they would’ve learned a lesson.
Oh agreed. You’d think they’d learn. What’s more is I’m sure they probably primed it by using equity from their LV homes to make it happen. In a way… I feel “somewhat” responsible. Since I’m a stock guy and they’ve always felt the need to compete w/ us for some weird reason (I drove a Ford Taurus in the 90’s) they would rather fail fantastically at real estate than invest a dime through me?
It’s o.k I’m used to it.
I posted a link to a photo essay on the demise of Shady Grove RV park in Austin on the blog a couple days ago….they’re going to build some high rise condos there and there are a lot of people posting their reactions on the Statesman website….most are sad to see it go away.
Austin is quickly transmorgrifying in to another Dallas or Houston, and it’s happening despite the fact that there are a lot of people in Austin, including people with political connections like Jim Hightower and Kinky Friedman and Leslie :), who probably don’t like the direction that Austin is heading in.
Austin will lose all of its charm and gain all of the eyesores that you find in 99% of Americas cities…
A friend of mine lives in East Austin, which is notable for older, small wood bungalows on rather large, almost rural lots with large oak trees. The flippers are pushing out the natives, who are typically poor, and one flipper in particular has gained the ire of neighbors by building hideous 2-story McMansions that literally blot out the light. Last year the Austin city council tried to place a moratorium on building permits so that this rampant flipper development could be stopped. Not sure where it stands today.
That’s too bad, shady grove was neat. Actually, that really sucks.
Let me also tell you what East Austin is noteable for. Crime, crack, and hookers walking the street, and public drinking/urinating.
This is a place where the white man fears to tread in the day time, much less after dark. I mean it all depends on the area, but those are pretty good rules to live by. I used to live in east austin in college. A lot of it has gentrified though, like the rest of austin. Lock your doors at night. When the downturn happens, these will become fortresses just like homes in Venice CA during the last downturn.
When’s the last time you were here? That was totally east Austin in 95 but it’s changed very dramatically. Still predominently Mexican although that’s changing but it’s nothing like it was. Maybe up by 12th and Chicon still and east of Pleasant Valley somewhat but most of east Austin (particularly Holly) has gotten much better.
Why does “master planned community” sound so dreary? God save me from those. I much prefer the neighborhoods that fill in slowly over the decades, maybe after prior crashes let inhabitants buy up neighboring lots cheaply…to these godawful, cookie-cutter world-of-tomorrow monstrosities.
To each his own I guess. I much prefer community parks and pools, winding streets, cul-de-sacs, landscaping and architectural guidelines to no amenities, grid-like street layouts, haphazard or no landscaping, beater cars on cinder blocks, overgrown weeds, machine shop in the garage, unregulated type neighborhoods.
But what we are talking about here are centuries-old ranches being covered with cookie-cutter boxes, that nobody really needs. That’s the choice.
one neighborhood suffers from too many busybodies in yer business, antiseptic, sterile, morgue mentality while the other falls down the drain of no one cares to keep up a decent standard of appearance, or predators watching your daily routine to take advantage in the worst hoods.
too bad the mustang-on-blocks, do-yer-own-thing crowd thing can’t all afford a few secluded acres to enjoy themselves, and likewise the manicured lawn crowd. it all goes to people who just want to impose(or have you endure)their lifestyles on their fellow neighbors.
I see both types in my HOA. (If it wasnt for the low prop 13 tax savings & quiet cul de sac, there is no way in hell I would have bothered keeping this mortg-free but extremely neglected fixer)
unless yer wealthy enough to be able to completely choose where you want to live, I suppose we all just have to make the best of it.
When I was growing up, every house we lived in had some little yard area us kids could have where we could “do our thing” without getting scolded by our parents; the place we could dig holes, make forts… My dad used to call it “the jungle”; that place in the back yard between the fence and the hedges where we could do what we wanted.
Those days are over because now the architects use every square ft for something; every area of the yard is “spoken for” and managed.
I think these kinds of yard require store bought toys because they lack interesting natural items that you can make into toys.
Preach it, Spook! When I was a kid, I LOVED digging holes and building forts.
And I loved Kool-Aid!
Yeah, but did you snort it, NAR-style?
‘When I was a kid, I LOVED digging holes and building forts.’
I still do, and I’m a grown-up. I never saw any good reason to stop. Plus, as a grown-up, I can buy alllll the tools I want.
You rock, Olympiagal.
We had a decent size back yard too. But even better was the “park” that was less than a quarter mile away. Nothing but a large, mowed field next to a creek, with woods behind it. About 10 acres or so altogether. As kids, depending on the season we played football or softball, with no adults telling us what to do. We also caught frogs and pollywogs and the occasional crayfish in the creek, and played war and built tree houses in the woods.
Did anyone else play “move-up,” which was baseball/softball when you didn’t have enough players for two teams?
Is “move-up” anything like softball with a “ghost man on first” that ran exactly as fast as you did, so you could force “him” out? My sister and I played that all the time.
We played by a public creek too. We found that you can use a cattail as either a walk-talkie or a light saber, depending on where you break off the stem.
Our version of move-up had 3 hitters, a pitcher and catcher, and as many fielders as you have, up to 7. The easiest outs were force-outs at home. With runners at first and second, if the batter didn’t hit it well, the lead runner would be forced out at home (since there were no more batters). Once out, that player would go to right field, and with each successive out he would “move up” to the other positions in turn, until he got to bat again. With less than 12 players (9 in the field), we’d require the batter to name which side of second base he was going to hit it. A hit to the “wrong” side, or a foul ball, was an out. No balls and strikes; the batter could wait for his “sweet” pitch. Lotsa fun.
We called it “fly-up” but that’s because you’d have catch a pop-up fly. Sheesh we played right in the middle of the street, but it was a dead end.
RE: As kids, depending on the season we played football or softball, with no adults telling us what to do. We also caught frogs and pollywogs and the occasional crayfish in the creek, and played war and built tree houses in the woods.
If their kids did this kinda stuff today the Soccer Moms for Higher Property Taxes would have a hissy fit.
Thinking of all those child molesters and sex offenders lurking in the woods would give them the vapors.
I grew up on 18 Acres. The yard was so big that in the summer, if I was mowing the yard and had to pee, I’d just get off the tractor and pee right there. The neighbors wouldn’t see anyway. We had a dirt track me and all the neighbors rode around on, a creek, and a field we played football in.
Now there’s probably 5-6 Mcmansion developments nearby, all with these pointless postage stamp sized yards. I sort of feel sorry for the kids that grow up there. They probably won’t care anyway. They’ve got Nintendo Wii’s, flatscreen TV’s and all the crappy little malls that are getting built left and right.
“‘San Antonio is holding its position as the national and world economies go into the tank,’ said Trinity University economics professor Richard Butler. ‘We don’t live on an island, isolated from all that. But the ground we are on right now is pretty high.’”
San Antonio is actually very flat and subject to flash floods. It is also very dependent on tourism and the military. If there should be a pull back in either of those two, it would be a big problem.
You know that this is true when you drive into a hollow and there are roadside flood markers measured in feet.
Don’t you just love when people, economists, whatever describe the global economy as being in the tank? Yet somehow fail to quantify exactly how or why our now REIC-Based “economy” is in the tank?
IMO, SA is just as reliant on house construction as anything, so housing can pull down the entire economy as it has in California. They have been building like mad there since the early 90’s.
“‘I’m drinking the Kool-Aid about the whole Waller Creek area,’ said Steve Poe, CEO of the Poe Companies, which is one of the partners in the project.”
And this is how one company’s trip to the PoeHouse began…
“‘This is like that proverbial place in Central Park in New York City,’ Poe said. ‘That’s what we’re creating.’”
Steve Poe does not equal Frederick Law Olmsted.
My parents live in the Austin area. They bought a house in 2000 or 2001, right around New years of 2000 so I don’t remember exactly which year. Anyway, they paid about $300K for it. They sold it in 2007 for $380K. To me that doesn’t scream bubble at all at 4% a year appreciation.
So as far as Texas goes, from my limited knowledge of the place, I would tend to agree with the sentiment that it is different there since there was no bubble and hence there will be no crash.
I was living in Austin when they bought, and my rent was half of what my soon to be bankrupt landlord was paying. They paid bubble prices and the experience since is the result of equity nomads propping up prices in the years since. IMO, Austin will crash harder than any other place in Texas (except the coastal condos) due to overbuilding.
BTW, building a 66 story tower over a flood area is a good indication of the foolishness. I have seen flood rescue boats going down 6 foot of water on better streets downtown. And it wasn’t a particularly unusual downpour.
At the time I was living in Boston and $300K would get you a 500 sq ft run down condo. My rent for a 2 bedroom nothing to write home about apartment was $2100 a month. So to me $300K for a brand new 3500 sq ft house with a huge yard and a pool seemed like the deal of the century. It’s all relative I suppose.
“IMO, Austin will crash harder than any other place in Texas (except the coastal condos) due to overbuilding.”
That’s the conclusion I’ve reached, as well, but it’s nice hearing it come from you. I can’t tell anybody here anything like that without being told I’m crazy.
That’s exactly it Ben! Austinites *LOVE* Austin and think the world revolves around it, hence there will never be any downturn, impossible! Except it happened before in the late 80s. You’d get free microwaves and several months rent free if you’d move into some apartments. Those condos downtown are so out of whack with what anybody can affford there it’s ridic. in ‘95 I was paying $170 a month rent for a room in a house on east 38th street. I think my apartment before that was $300 a month. Before the current bubble, you could get a house on lake Austin for 350,000+ grand, and I’m talking an inceredible house. My friend’s house in RR was 100 grand maybe 5 years ago. Maybe to out of towners its cheap at 150, but not to locals.
Oh! and one of the most telling things to me, is that I signed up with an austin realtor a few years ago to get emails concerning rental property within certain limits. I used to go weeks without an email. Now I get them 6 or 7 times a day with property meeting my (stingy) specs. That tells me where Austin is headed right now more than any headline in the statesman.
They have a saying in Texas you see on bumper stickers. “Welcome to Texas, now go home” Thanks for buying my house for too much money, Clownifornian, now go back to SF or wherever you’re from. All of California may as well be SF to locals. No joke.
“‘I think it’s probably just smart business sense,’ he said. ‘The ones that were building 10, 12 specs at a time, they’re doing five or six, which is smart.’”
That’s, ummmm…’smart’? Where’s my dictionary, because I thought ’smart’ meant something else entirely. Such as, ‘not entirely and consummately stupid’.
Say, speaking of, has anyone read their dictionary, A-Z, besides me? I enjoyed it very much, although the plot was a bit thin in places, and the characters were hard to keep track of.
After I did that I decided to read the Encyclopedia Brittanica, but it was outdated by the time I got to ‘H’. Also, I was using Q-R-S to press flowers, I think it was M and N that were holding down the top of a rat cage lid, and V got burned up in a bonfire by accident, so you can see how I lost enthusiasm with the project.
Whew! Once again, I’m glad I put my drink down before reading Olympiagal’s comment.
olygal
when you got to the “P” section, did you find yerself listed
under “Pip” !?
Pip: one extraordinary of its kind
Merriam Webster Dict.
My mom provided us with a 26-volume Funk & Wagnall’s when we were kids. She bought it used from a thrift store and it was about 15 years old, but that was okay. My little ivory tower. Fond memories!
The main thing I remember from an (already old) Funk & Wagnall’s in the 50’s was the “sex” article, which was highly clinical and therefore actually scary and depressing (I was 10).
You shouldna been readin’ it. Where was your momma?
I must have missed that one. For sex education, I watched Barbara Eden on I Dream of Jeannie. Hubba hubba!
Those that Google Earth. Go to 33d36′34.07″N and 101d55′43.19″W. Talk about cloning.
Kind of looks like part of the motherboard of your computer, that Kemper, Grinnel, Harvard area. Talk about stamped out, cookie cutter, that’s a great example. Or an awful example, I guess. If you live there.
you shoulda’ seen what it looked like from the plane when I flew into Nashville: Same mass-produced Mcmansion developments all over the place.
Just fly into San Jose. Depressing as all out.
come to el paso. th real estate market is still very strong. people are getting richer and richer everyday with their investment in their houses.
I’d rather stay in the US myself. Not to be snarky but a lot of this is immigration of Hispanics from southern CA to Texas. Having grown up during a reverse migration of gang bangers and desperate parents from California and Chicago back to the south I’ll pass. Nothing wrong with the parents but kids that grow up relatively poor in southern california are often seriously messed up.
You got that right
How many days until the bank takes yours, Bunky?
Bunky?!?
Did Sparky get taken out then? Cr@p.
Still posting from the UT-El Paso, I see.
San Antonio suffered from overbuilding more so than rampant appreciation. Homes have been appreciating 8-10% yoy as opposed to 20-30% yoy. As I type this, there are 13.3k properties for sale in Bexar county alone which is SA metro. If you include the outlying counties, the number is closer to 20k. I have never seen it this high, though I have only been watching for the past few years. SA will not escape the REIC meltdown. It will be a product saturation issue more so than an affordability issue.
I will know San Antone has hit bottom when armando’s hoochie gucci wife is on the corner trying to spin a sign while he is yelling at her from his bald-tired hummer.
Yes, but then you’d have to live in El Paso.
RE: Drinking the Kool Aid in Texas…
Burning the fuel oil in the Northeast @ $4.07 per gallon.
Watch for a coming massive exodus from the north country to absorb all those foreclosures in the Lone Star State.
Only one question-Got water?
Oh, that’s $4.07 a gallon too? Heck I’ll just drink fuel oil then…maybe pour some Kool-Aid into the gas tank
they will trade cold-weather fuel oil for hot-weather A/C electricity bills.
Got water?
Hopefully the local lake will be less than last year’s 15 ft above normal full stage.
my clients in Texas (n TIcksis) are the best- they go for broke and spend big
go TEXAS
Ok, a least this guy willingly admits he’s a clueless moron:
“‘I’m drinking the Kool-Aid about the whole Waller Creek area,’ said Steve Poe, CEO of the Poe Companies, which is one of the partners in the project. ‘This is the natural progression for the city. People gravitate towards parks and water, and that’s what this is.’”
Interesting that there’s no housing bubble in:
Downtown Detroit
Downtown Philly
Washington D.C.
East St. Louis
South Central LA
the problem is too many people are going after the 20 “nice” areas. I think it’s soon time for the THX-1138 style society.
Austin - Residents, PLEASE go see THE UNFORESEEN! This is the best Real Estate documentary made! Austin writer, Austin topics, showing right now. The first 1/2 really gets into the last boom and the developers short-term economic thinking (greed).
Link: http://www.originalalamo.com/Show.aspx?id=5240
http://cgi.ebay.com/Spacious-Texas-Hill-Country-home-on-5-acres_W0QQitemZ300208405318QQihZ020QQcategoryZ12605QQtcZphotoQQssPageNameZWDVWQQrdZ1QQcmdZViewItem
3rd to last sentence in Description says…and I quote.
“Prices are only going up.”
recently appraised at 330k etc.
Same location. Home in Westlake, CA. Reduced over 546k to $1,600,000. +
WOW what a deal.