The Gatekeepers Functioned As The Doorman In Texas
The Dallas Morning News reports from Texas. “New-home sales in the Dallas-Fort Worth area continued to dive in the second quarter - down almost a third from a year ago. It was the lowest quarterly home sales total in a decade. And starts of new homes were off about 30 percent from second quarter 2007, according to Metrostudy Inc.”
“The pace of home construction in the D-FW area is less than half what it was at the peak of the market, said Mark Dotzour, an economist with Texas A&M University’s Real Estate Center.”
“Tuesday’s quarterly new-home sales report comes just a day after the latest statistics for the pre-owned housing market showed a 20 percent decline in sales in North Texas in June. Sales of pre-owned homes are down 15 percent and sales of new homes are off 32 percent comparing the first six months of the year with the first half of 2007.”
“Dawn Lyon, her husband and their four children had been in their lakefront Rockwall home for little more than a year when their $150,000 adjustable-rate mortgage reset. Monthly payments of $1,200 jumped to $1,600 in September. At the same time, the family was hit with weak business prospects and children’s medical bills.”
“They stopped making their mortgage payments and, by Christmas, the family was considering bankruptcy.”
“The Lyons contacted Southwest Home, which bought their house for $130,000 in March. Southwest Home arranges short sales. ‘It definitely felt good to get out from under that house, and not have to worry about bankruptcy,’ Ms. Lyon said.”
“Many of Southwest Home’s customers are police officers or postal workers who bought their first home recently and now struggle to make the mortgage payments.”
“‘There are brand-new homes that are being foreclosed on,’ said owner of Southwest Home Solutions, Mike Arnold. ‘You can still smell the paint.’”
The Fort Worth Business Press. “As the fallout from the housing slump continues to mount, mortgage fraud continues to top the list of problems throughout the United States and in Dallas-Fort Worth’s own backyard. Of the top 10 states experiencing mortgage fraud in 2006, the FBI includes Texas as one of the top 10 mortgage fraud ‘hot spots.’”
“‘It’s bad, but it’s going to get worse,’ said Scott Burdette, managing director of an independent organization of appraisal companies based in Fort Worth. ‘A lot of people have been charged with mortgage fraud, but the numbers are going to keep growing for a while.’”
“Gilbert Denizard, a loan officer with Fort Worth’s Fairway Independent Mortgage Corp., said many mortgage fraud schemes were covered up by home appreciation. Over-valued homes appreciated and eventually caught up with the inflated value, he said. But once the housing boom came to a halt, appreciation could no longer make up for an over-valued home.”
“‘Many times, if there’s a mistake in the home’s value, there’s enough equity in the house for another person to come along and bail us out,’ Denizard said. ‘But once things started slowing down, it’s like if you’re driving along on I-30 and someone up ahead taps on their brakes…Before you know it, everything behind them has slowed down. That’s essentially what happened in the housing market.’”
“In the late 1990s, owning a home was made easier through government-sponsored lending programs such as Fannie Mae and Freddie Mac, Burdette said, and the ease contributed to the housing bubble seen throughout the country.”
“‘We used to have willing and able buyers, but in the late ’90s we had willing and enabled buyers,’ Burdette said. ‘The creation of the programs that let so many people own a home lowered the bar just enough and created an environment where this stuff could be done.’”
“Burdette said much of the crime wave originated with appraisers giving inflated appraisals of homes during the housing boom. ‘We were supposed to be the gatekeepers, but we functioned as the doorman instead,’ said Burdette.”
The Kerrville Daily Times. “Many economists remain focused on what they call a U.S. housing bust, or even a crisis. According to Kerrville Realtor Brandon Douglass, the market here is feeling the effects.”
“‘We are an insulated market in some regards because we don’t really have big industry, so we don’t feel the pain of layoffs, etc.,’ Douglass said. ‘But we are feeling the effects from other places. … We are a lagging indicator of how things get in other places.’”
“‘I think the big part of the reason we haven’t had more buyers is, A, the insecurity of the market and, B, the fact that they can’t sell their homes in the other markets,’ he said.”
“From Jan. 1 to June 30, there have been 560 new listings on the market compared with 484 during the same time last year. The number of single-family residences that have sold, however, is down more than 17 percent for the year. Last year, 473 homes sold through June 30, compared with 392 this year.”
“Douglass said that in previous years, his office would see at least one buyer from California or Florida a week. It has now been months since he has seen buyers from those markets.”
“‘There are still a large number of folks that want to buy in our area and cannot do so until they sell their homes in other areas,’ Douglass said. ‘We can’t put our heads in the sand. It’s just the reality of it.’”
The American Statesman. “In more evidence that the national housing troubles are hitting Central Texas, one of every 133 homes in Travis County was posted for foreclosure in the first six months of the year - compared with one in 265 homes in 2001. The same trend prevailed in Williamson County.”
“The largest increase in Travis County postings was among homes valued at $300,000 up to $500,000. Those postings were up 44 percent from a year ago. Postings for homes from $500,000 up to $1 million rose 22 percent. Postings for homes at $1 million or more rose 18 percent.”
“The region’s rising foreclosures…are higher than they were in 2004, when Central Texas was still in the doldrums of the tech bust. They also answer those who say rising foreclosures simply reflect the increased number of homes in the region.”
“George Roddy Sr., president of Foreclosure Listing Service Inc, said, the contention ‘that today’s foreclosure posting rate on a per capita basis is not as bad as it was a decade ago does not fly.’”
“Jeffee Palmer had gotten used to the inconvenience caused by construction on Lavaca Street between 17th and 18th streets, and then she started wondering what happened to it.”
“In addition to the 17th Street closure, a block of the right lane of Lavaca Street has been closed for almost a year. The developers of La Vista on Lavaca, a luxury condominium and office project, took out a permit with the City of Austin on April 20, 2007, to close the block during construction, said Jason Redfern, manager of the Right of Way Management Division in the city’s Watershed Protection and Development Review Department.”
“The developers paid $99,900 to the city to keep the street closed for six months, Redfern said. The permit was to have been renewed for the same fee every six months until construction was completed.’
“The developers renewed their street permit in November 2007 but failed to renew it in April, Redfern said. Palmer said she has not seen anyone working at the site for months.”
“Redfern said that he began making inquiries and that he was told that construction would resume soon. ‘This one is very unusual,’ Redfern said. ‘You normally don’t see construction starting and stopping like this.’”
The Record Star. “Soaring fuel prices, the housing market slow down, and other economic forces have claimed one long-time Robstown business. Access Chevrolet closed its doors June 20. The Access Chevrolet sales office in Calallen also closed June 20.”
“‘Continued changes in the marketplace due to the housing market slow down, high fuel prices and other outside influences have placed severe pressure on retail car dealers,’ said dealership owner Charlie Massey.”
“‘I think housing started the downhill affect,’ Charlie said. ‘Demand is down because they can’t use their homes as (automated teller machines).’”
From KTRK Houston. “Struggling to sell, some homeowners forced to pay more property taxes, while the housing market continues to drop. We found it’s a problem affecting almost half the neighborhoods in Harris County.”
“HCAD started working Saturdays last week to handle all the property tax protests. And with dozens of neighborhoods going through price dips and spotty foreclosures, many people are complaining the tax man is ignoring the market.”
“‘My taxes are very high and the market is down’ said homeowner Jaleh Duran. ‘I came to get help.’”
“‘We hear that argument a lot from homeowners,’ said HCAD Deputy Chief Appraiser Guy Griscom.”
“Tito Guerra’s taxes went up on his Denver Harbor home. According to realtors average sales prices dropped 38% from May 2008 to May 2007, but taxes went up 6 and half percent. ‘I don’t think it’s fair,’ (said) Guerra.”
“The taxes up, prices down problem is especially obvious in areas where home values are less than $150,000 dollars and that is where nearly all of these examples are. ‘The starter home, move up home 85-150 has dropped down considerably,’ said HAR Chairman. ‘I would say 13-15%.’”
‘Douglass said that in previous years, his office would see at least one buyer from California or Florida a week. It has now been months since he has seen buyers from those markets.’
I am pretty sure these people in Florida and California weren’t relocating to Kerrville. It’s more likely they were specuvestors running up prices in anticipation of a big payoff. As far as the Austin condos, I can assure you that if they have stopped construction, the deal is dead. With big bucks in it, it is too expensive to let it stop unless they have no other choice.
Hello Austin condo skeletons!
Anchorage, Portland and many other cities were bid up by California RE speculators. Now that they are taking it in the shorts, I am sure these infestors alone will become a significant source of foreclosures in more distant metro areas as they shuffle assets to cover their losing bets at home.
I am seeing a lot of “high end” condo developments locally that cater to this market, just sitting empty and whose builders are very likely in foreclosure.
NoSingleOne,
That about covers it. Oh and don’t forget Bend, OR Boise and other Rolling Bubble beneficiaries! On a personal note my wife’s cousin in Vegas were chomping at the bit to cash in on the RB. Several homes in Vegas ( but they wanted to d-i-v-e-r-s-i-f-y ) so they bought into FL, Austin and PHX as well!
After years of running a VERY successful elder-care business they are technically busted. I’ve dropped casual hints that at this point it would be a far better thing to cut their losses and move on but last I heard they are still feeding about a dozen alligators.
You can only talk until you’re blue in the face.
Why bother talking? These types never learn.
Just drop by after the big bust with a bottle of I-told-you-so wine.
You know what goes good with that “I told you so” wine?
“and you’re a dolt” cigars!
Oh, just throw in a bottle of fine cognac while you’re at it. Why do things by halves?
“I told-you-so wine” LOL!
Can you order it by the case? ( I think we’re going to need it ) The sad part is even though my wife’s cousin ‘constantly’ gloated about the success they were enjoying, we still don’t take any particular joy in all of this.
I tried to talk to them for years about setting up some sort of self-employed retirement plan and it was always “We’ll think about it” or “We need to check with our tax guy”.
( So basically… “we’re doing better than you and since we have more monthly cash flow than you we must be smarter than you and if we’re smarter than you why would we listen to you?” ) Now they will be wiping hynies and changing bedpans until the year..?
……they wanted to diversify…….”
ROTFLMAO. I can hear it now…….
“Our adviser told us to diversify our investment portfolio, so instead of concentrating on Vegas real estate, we bought real estate in Florida, Cali, and Phoenix.”
“We also invested in Beenie Babies, Longaburger baskets, Countrywide and Bear Stearns”
Several homes in Vegas ( but they wanted to d-i-v-e-r-s-i-f-y ) so they bought into FL, Austin and PHX as well!
LOL! How clever of them!
Serial-Knife-Catchers
betamax,
I know, I know. Please understand though that like a lot of RE Perma-bulls, you never hear about their purchases until after the fact. I don’t know what it is? They’re afraid someone will try to talk them out of “being all they can be”? Talk them out of “reaching their full potential”?
I have no idea. In several cases we didn’t hear about the buys until it was clear they were bad buys. I keep thinking they want to strategically “leak” it back to me to get ideas on how to get out of that situation.
Or perhaps needing some affirmation that it really is o.k to “just walk away” and old DinOR says that’s what the smart money is doing? ( Actually my advice was to set up and fund a SEP or Simple ) but it’s a little late for that now.
I’ll have to ask my coworker who bought a condo in Austin last year how the market is. One of the reasons that he bought there was that the market was still hot. He can afford both of his residences but he’s done a fair amount of buying/selling over the years and is used to making profits on his real estate deals.
Well, he’ll just have to get un-used to making profits on his deals.
Michael,
That’s the whole point. This couple was very used to winning on all of their transactions. After all, they had been for years. So that’s what they know… winning. Now that virtually everything they “own” is under water they have no clue as to what their next move should be?
Given I’m a bear I think we all know where “I” stand. Even assuming their (now) rental properties remain fully rented year round, the neg. cash flow on a declining asset I’m afraid leaves them technically with a net worth of “0″. They have constant cash flow from their patients but I fear all that means is that it’s just a means by which to feed these alligators?
“That’s the whole point. This couple was very used to winning on all of their transactions. After all, they had been for years. So that’s what they know… winning. Now that virtually everything they ‘own’ is under water they have no clue as to what their next move should be?”
*****
This comment struck me because of how it partly describes, in a broader context, some SF Bay locals… those I like to call bubble riders.
To be clear, since I don’t necessarily mean the VC’s in particular, I’m using “bubble riders” to describe some who could be considered “average” Bay Area citizens.
In any case, they are very used to “winning”, as mostly, these are people up to 40 years old who’ve known nothing but bubbles (there’s plenty of boomers in this category, too, but they supposedly have seen a real recession in their employment lifetimes). They work in technology, law, finance or real estate… and perhaps other related fields, and there’s a large segment of them who arrived here in the mid-90’s or later.
They saw the dotcom boom and crash, the equities markets run like crazy and settle down and now they’re seeing their beloved real estate cool down.
I’m wondering myself - what will they find next?
I don’t have an answer for that, but if they do not come up with much - could their life be very different?
If so, I suppose I would welcome the resulting changes in their behaviors.
My sister and BIL have been successfully investing in RE for years. All their properties cash flow from the beginning and it’s a great tax write off for them. While they did believe there was a bubble, they just didn’t believe it would get that bad. They quit buying properties in 02 because there weren’t any good deals. Unfortunately they invested the proceeds from the sale of his mothers home in a REIT. It is no longer paying dividends and they haven’t faced reality there. I feel bad because I had no clue this was coming and I would have sent them links and more info.
I never have understood how a cash flow positive property can be a great tax write off (at least since 1987).
With the money coming in greater than the money going out, where are these tax deductions coming from??
“Tax write off” is the looniest, most mis-used phrase ever. Somehow “tax write off” got associated with “profit” - reality is that tax write offs only decrease your losses - they don’t increase your gains.
For instance if you give $100k to charity - it can be a tax write off and in reality you may only be out $70k - but you’re still out $70k.
For rental properties you can write off expenses, e.g. maintenance, and this can help your bottom line - including making the investment more profitable than it otherwise would be. However what’s neglected is the taxes you have to pay on the income/gains from the property in the first place!
So you don’t buy property (or any investment) because “it’s a great tax write-off” - you buy it because of the income you get from it. The tax write-off is a secondary lesser consideration.
Deterioration of the structure.
I’m sure they are referring to both depreciation deductions - nice non-cash reductions of income and personal expenses that are piled on the rental property books.
So you can have lower taxes and positive cash flow.
About 10 days ago, a friend of mine met an owner of a condo in the 360 tower, they got to chatting at a music club. The 360 was the first condo tower, sold out pre-construction, and had a waiting list of hundreds. When he heard about them, he spent a day speed-dialing to get through, and bought.
The place is open now, and he drove in from home in Houston (almost 4 hours) to spend the weekend and enjoy the entertainment scene. She asked him if he had neighbors that live there all the time, and that he evaded the question. She asked if he was happy that he had bought it and he said yes, but that he is really dubious about all the other tower projects - he thinks they are untenable and that there will be a disaster.
Part of his reason for buying the condo was that “he did not have enough equity in his house in Houston, and he wanted to gain equity.” That confused her enough that she asked me “What is equity anyway?” I explained and she said, “That’s what I thought.” She’s not stupid or naive - she’s read her amortization schedule, she just got thrown off track by the nonsense…
“‘I think the big part of the reason we haven’t had more buyers is, A, the insecurity of the market and, B, the fact that they can’t sell their homes in the other markets,’ he said.”
Why do these shills never address what buyers really care about:
Prices, prices, prices. Prices are ridiculous!
“‘I think housing started the downhill affect,’ Charlie said. ‘Demand is down because they can’t use their homes as (automated teller machines).’”
YOU FIGURED IT OUT, BUDDY. Now the “booming” small business sector is going to feel the pain because a lot of the money used to buy massages, spa treatments, yoga, organic food, etc. was just extracted from homes. American consumers have hit the wall–they can’t get any more money. A second “stimulus” plan is not going to get people back in the old game.
Keep the popcorn popping,
Red Baron
Red Baron, are you Neil? Sorry to ask, however, I’m not able to visit as often as I used to and haven’t kept up on user-name changes.
btw, Ben: 2 articles in the August 2008 issue of Vanity Fair -
one on the Bear Stearns crisis/sale (p. 106—>) and another on the Hamptons (p. 134—>) and the downwarding trend changes in the upscale market ($10M+). Job losses on Wall Street, foreclosure vultures, bottom-feeder talk such as, ‘I know its a distressed market-show me somebody who’s bleeding.’ Another: a Wall Street guy who hadd a broker show 200 properties and who chose 2 or 3 and then made offers of 50 cents on the dollar [lol].
~Misstrial
Red Baron = Bye FL
Just for the record, I am not Neil or Bye FL. I am Red Baron!!!
Keep the popcorn popping,
Red Baron
I still can’t wrap my mind around “Incredulous” and “Incredulous (original)” — especially when hostile takeover incredulous addresses classic incredulous as “original” (hey, original . . . )
There is something very freudian, or surreal, or Hitchcock or something about it, or maybe my mind just needs some distraction . . . what was that movie where one girl moved in as roommate with another girl, and then started stealing her look, personality, life, etc.?
“Single White Female”?
Thanks, Misstrial. When I get back to Austin later today, I’ll make sure I build some VF reading into my evening.
Have fun paying those property taxes Texas.
“Dawn Lyon, her husband and their four children had been in their lakefront Rockwall home for little more than a year when their $150,000 adjustable-rate mortgage reset. Monthly payments of $1,200 jumped to $1,600 in September.”
That is one lousy loan–I mean, at 7% interest on a 30 year fixed it would have been a grand a month. Stupid Dawn Lyon.
Do you think she would have even been given the loan at all if the bank and/or broker wasn’t getting a decent YSP from doling out their toxic waste? I bet it wasn’t even discussed, and she didn’t know enough to ask.
Steve W,
Here’s why I’m sort of not buying into the bogus “My Loan Re-set Ate My Homework” act. If you’re like most Americans you’re probably claiming 1-2 or 3 dependents on your W-2 form. Depending on your situation. By claiming 7 or 9 ( perfectly legal ) you would basically have ZERO withholding, get a bigger check ( X 2 incomes ) cover your damn payment and recoup it on Schedule A!
It’s not exactly rocket science and I know if guys in the service can figure this stuff out so should most Americans. If your Itemized Deductions grows by $4,800 a year it should negate a lot of that tax liability. Not completely in most cases but a lot.
‘Many of Southwest Home’s customers are police officers or postal workers who bought their first home recently and now struggle to make the mortgage payments.’
Recent buyers, foreclosures with fresh paint and these are the folks with the most stable jobs. How do you suppose all the other buyers are holding up?
Ben,
Don’t get me started on the “Hero Trades” ( cops, fireman, EMT’s etc. ) I have left very specific instructions to all our local heros to allow me to continue to burn if on fire, keep cruising if they see me being robbed nor attempt to dislodge any food caught in my throat.
( I can’t “afford” you guys! )
In our little town, pop about 15K, we have 4 fire stations, 100 police, and 4 ambulances. Firemen work 2 days a week, for 24 hours shifts, and the rest of the week they have off. The get paid for being asleep!. I wonder how long this will last when they are short of money? They are already threatening the cut the usual services if they do not get an override, and of course go after those services that will garner the most attention.
The local PTB are cutting the senior citizens social services, and the senior citizens recreation department. You would not believe the screams of pain! What are we going to do with our senior citizens now?
It is all pathetic. There is nothing more disgusting than small town politics.
This poster comes from a family where many of the seniors just keep right on working. Latest case in point is my 82-year-old father who’s going deaf, but he doesn’t let that keep him from going to work.
He didn’t let cancer get in the way either. Yeah, it was a pain in the prostate, but he kept right on working.
And that’s how the Slim Family answers the question of “What are we going to do with our senior citizens now?”
they get paid to be rudely awakened after 3 hours sleep so they can risk their lives saving people from burning to death..
the 24 hour shift is standard practice everywhere, afaik.
i knew a guy who needed some money and took a job working aboard a ship.. some kinda merchant marine thing. He got paid 24/7. But like anything else, risk is commesurate with return.
pinch-a-penny,
Here’s what’s worse, VOLUNTEERS do most of the “work”! Be it facing a raging fire or polishing brass, the regulars on the dole primarily “supervise and train”. Why do the volunteers put up with all that abuse? Well to become regulars of course.
Our small Oregon town “prides” itself in it’s Spirit of Volunteering but when I get feedback like this my get up and go just got up and went. We’re about 12k pop. and we have like a dozen squad cars and a state of the art fire station.
And pretty soon you are going to find out why every small town from Oregon to Maine has invested in state of the art SWAT equipment compliments of DHS. (sorry, tin foil seeping through :). )
Joey: I get rudely awakened at 3:00 AM once in a while (more frequently than our beloved Fire Fighters) and I do not get paid to sleep up to that point. And spare me the running into a burning building part of it, as it generally means that they show up in nice bright red trucks, and pour water from the outside.
House fires in my town are pretty rare, and happen maybe once or twice a year. Might get more now that some FB figures out that they might make money. I still think that there are too many firefighters, police, and ambulances for such a small town, and that they should at least work 40 hours a week, while awake.
The cop/firemen/correctional officer worship is vomit inducing. And it’s all based on fear.
There is a reason that there are LOOOONNNNGGGG waiting lists to get these jobs. The pay is phenomenal, the job security is outstanding and the benefits have no equal in the private sector.
Here in the Empire, the local coppers uniforms have gotten more militaristic looking, over the past few years…
exeter,
True. What I’ve grown to realize is that I’m infinitely more likely to end up destitute from having paid 9% of my lifetime income to the state + property taxes than to be struck by lightning and actually need their “services”.
Half of the time they are “responding” it’s to an incident involving parolees no one cares about anyway as they shivv, stick, stab and sick pitbulls on one another. What a great “value”.
In Colorado,
Excellent point. It says it all more effectively than I could ever describe.
When I was in the service I worked Crash/Fire/Rescue. We got the same pay as everybody else, we worked “one on, one off” or about 360 hours per month. Our “station” was a converted quonset hut with one rattling window air conditioner. We were also expected to grease everything that moved and paint everything that didn’t. Plus our regular military duties.
( There was no line )
Emperor, the cop-groupies love the para-militarization of cops. A second thought, ever wonder why cops and firemen need gargantuan SLOBurbans?
not sure that I agree with the fireman bashing…. I think there are a lot of fatalities percentage wise. Most of us do not risk death at work. Also, most of the firefighters I have met are super community helpers, always assisting others….
compared to the bankers that created the housing bubble while getting paid 250k per year ignoring all risk assessment which is their primary job, firefighters are ok by me.
ever wonder why cops and firemen need gargantuan SLOBurbans?
you can pack in more donuts?
jb,
I think it’s a pretty fair and accurate description. Please don’t duped by the “community involvement”. There are plenty of people that do plenty of volunteer work that will NEVER get a DIME in pension!
Besides, we’re ’supposed’ to be hiring fire-breathing, smoke belching firefighters ( not mascots or cheer leaders ) so please stop with the Santa’s Toy Drive and Pancake Breakfast already!
The 10 most dangerous jobs
Occupation Fatalities per 100,000
Timber cutters 117.8
Fishers 71.1
Pilots and navigators 69.8
Structural metal workers 58.2
Drivers-sales workers 37.9
Roofers 37
Electrical power installers 32.5
Farm occupations 28
Construction laborers 27.7
Truck drivers 25
Source: Bureau of Labor Statistics; survey of occupations with minimum 30 fatalities and 45,000 workers in 2002
pinch-a-penny , i dunno what your town’s specific situation is. As a rule of thumb, if you’ve got too many of something, do try to get rid of some.
As for paying firefighters to stand at the ready, considering the cost as an insurance premium may ease the pain. Nobody needs a fireman till they need one..
My wife used to be a paramedic and later was a flight medic. Of course she knew all the cops and firemen.
Once, I was driving way to fast in a known speed trap. It was one of those small towns on a major state highway where they just love to pull people over. Actually, in this case it was the town I grew up in.
Anyway, I’m hauling ass and see a cop on the side of the road. It’s been years since I lived there, and I don’t know any of the police any more. As we go by, my wife waves at him. He kinda stared, then waved back and never pulled out.
I was a bit puzzled. I asked if she knew him, she said,
“No, but cops have such big egos if I wave at him he’ll think it must be someone who knows him and won’t pull you over.”
I love my wife.
Fishing is a dangerous job? Must be popping a few too many adult beverages out there on the lake!
a couple of albacore fishermen in my family tree.. i dunno if it’s statisticly true, but i was told the number one cause-of the ultimate cause-of-death (drowning) was getting tossed overboard while taking a piss.
And being swept off the deck in high seas, and being dragged to the bottom with the nets…
Nothing fun about it. Seventeen circles of Hell.
That is one lousy loan–I mean, at 7% interest on a 30 year fixed it would have been a grand a month. Stupid Dawn Lyon.
We could be forgetting the escrow items. well maybe - let’s give them the benefit of the doubt here.
Taxes in Rockwall run around 2.75% of appraised value, and if the house is truly lakefront.. i.e. it adjoins the corps of engineers strip of land that circles Lake Ray Hubbard, then the district is valuing just the land at $400k (or more, that figure is from 2 years ago) per acre.
So if their appraisal is at $250k, their tax bill is around $6,500 (assuming homestead exemption), which adds $550 a month to their payment, plus another $150-250 a month for homeowners insurance.
The rule of thumb for Texas is the house monthly payment is 1% of the purchase price(payment/taxes/insurance).
The monthly on a $150k house should have been around $1,500 per month. They must have had an ARM to paying only $1,200.
Actually, the banksters had their ARM. And LEG.
Haven’t been to Kerrville lately but it used to be on my short list of places to buy. Lovely area. Bet it’s way overpriced now.
I take 281 on my way to Kansas, regularly. I think that the land from Lampasas to just north of Mineral Wells is really beautiful and the little towns are pleasant. Each time I make the trip I stop in one of the little towns and drive and walk around and check things out - each one has a distinctive character.
I don’t think that property there has gotten as overpriced as the Hill Country around Fredricksburg. And I see a lot of positive development over the last few years - property improved, scrub cleared, ponds, vegetable gardens (esp. this year), grapevines, orchards, goat and sheep herds (and more cows and horses). Real life, not specuvestor, stuff.
Have you ever thought about that area? It isn’t glamorous. But it’s beautiful productive land with a temperate climate and - best of all - there aren’t any condo towers or Tuscany-on-the-Brazos type developments on the horizon.
As I recall, 183 between Lampasas and Brownwood goes through beautiful country.
Mineral Wells, old spa town, is way cool. A few people are restoring old mansions, although most are crumbling.
There are definitely some creative people in Mineral Wells and surrounding countryside. Somehow, it reminds me of Zilker neighborhood before the RE people started fetishizing everything cool about it.
While I like the land around there, I don’t see much about the economy, etc, that’s so special. This is serious redneck country. They can be good neighbors, etc. But don’t expect a discussion on the art world. Jobs are low pay, and in recent years a pretty bad meth industry has picked up as well. Good luck to those folks.
You’re being more realistic than I am. I get so sick of seeing the condos and McMansions and the devastation around Zilker and the horrible sprawl all the way out to Hamilton Pool. So when I see that someone has planted fruit trees or is raising goats out in those rolling hills, I fantasize a really nice idyllic life for them.
But redneck country is probably not a place I would get along very well socially. (In real life, you can’t just scroll down…)
Do you know what is going on in Mineral Wells with that beautiful old Art Deco Hotel that is now boarded up.
It was the architectural highlight of my visit to that part of Texas earlier this year. I was just stunned that beauty like that had not been cared for.
Now if they ever made that building into some condos - I would be interested.
I heard a rumor that one of the WalMart heirs bought the building - if so - what are they going to do with it?
Just FYI Everyone
http://www.texasalmanac.com/health/mineral-water.html
http://www.texasescapes.com/Preservation/Haunting-Photos-of-the-Baker-Hotel.htm
Thanks dagan68 for the sites, especially the haunting photos of the Baker Hotel. That building does have a powerful impact.
Last time I drove by the hotel in May, it was still deserted. I have a neighbor who has some connections in that area. She might be able to at least find out what the local rumors are.
Long time lurker, yes it is way overpriced. Moved from Houston in 85 during the “will the last person out of Houston turn off the lights” and the FDIC was in charge here. Didn’t buy till 2003 when I could afford to pay cash for my casa off Harper Rd. We didn’t go crazy but 6-8% a yr was the rule and I’m protesting my taxes next week
“‘I think housing started the downhill affect,’ (Car dealership owner)Charlie said. ‘Demand is down because they can’t use their homes as (automated teller machines).’”
Good stuff!
Remember the wait-lists for Honda Odysseys and other cars? A large percentage of that money was HELOC.
I especially recall the waiting lists for the Odyssey.
WTF? Its a minivan!
IIRC in its first year the Odyssey had a tranny problem. When I asked the sales droid at the Honda dealer if that had been addressed he was offended and claimed that was not true.
What? You asked a sales droid if a problem had been addressed? My heavens, what heresy. There are no problems in the sales universe. Only solutions. (Ever notice how many companies are selling solutions these days?)
“Burdette said much of the crime wave originated with appraisers giving inflated appraisals of homes during the housing boom. ‘We were supposed to be the gatekeepers, but we functioned as the doorman instead,’ said Burdette.”
Not very good doormen either. Is there anybody that didn’t get in?
Did this really originate with appraisers? It seems they often were no more than one part of a very corrupt process. They were helpful, but were they essential? Weren’t there others that were more actively pushing this process and others that could have said no?
Don’t you just love the “blame game ?” First it takes a RE sales person that is willing to take a buyer to a house they can’t afford and sell them on the concept that they can’t lose and they know a lender that can get them in . Or ,it takes a sales person, or builder ,or seminar group ,that gathers up “straw buyers ” for investment in real estate with possible cash back fraud or some form of a crooked deal that is to good to pass up . Than it takes the loan company and the real estate agent telling the appraiser that they won’t get the deal unless they hit the appraisal ,(of course there were some appraisers that were in on direct appraisal fraud also ).
Each new fake comp create the comps for the next appraiser.
You have to start out with a arms length transaction ,with a willing and able buyer, for a appraisal comp to really be a valid comp .The biggest reason for the market crashing is the fake mania that was riddled with fraud and unable buyers that went on toxic loans and had no intentions of anything but a short term investment . In a mania
market ,the buyer is operating on short term hype and belief in real estate going up ? You could say you had a brainwashed buyer who has been given faulty or fraudulent advice ,therefore they are not really a able buyer either . You add in that during the mania borrowers were promised that they could just refinance out of their “starter toxic loan”,and the whole market was moving based on the sales people and market makers misrepresenting the facts . Borrowers greed or fear allowed them to believe in this stupid hype that was promoted by the industry and the media . I have never seen so many borrowers willing to commit fraud or lie on loan applications ,based on advice and direct help from the professionals .
One of the jobs of the real estate community is to screen borrowers and only bring them to houses they can afford (otherwise you would be wasting the buyers and the sellers time and you wouldn’t know what to show a borrower ). So, don’t tell me that the real estate people didn’t contribute to the loan fraud ,in spite of the lenders also breaching their duty to prevent fraud, or liar loans, or appraisal fraud . Just because a crooked real estate loan agent is going to put a deal through doesn’t mean that as a real estate agent you have “clean hands” because you didn’t sign the final papers .
Also, I don’t think the public knows how often the loan agents gave kick- backs to real estate agents to steer their borrowers to them .
Add to that how often double escrows by RE agents drove up the price of housing ,and you just had a entirely corrupt market ,run by the so-called professionals that had free rein .
Housing Wizard
EXCELLENT postings!! I’d like to print & post copies aroun d town, especially on the real estate for-sale sign posts in all the yards, in the same lexan box as the info sheets.
now THAT would burst a few blood vessels in the high strung highpressure take no prisoners commish driven scene. and the footage of the enraged realtor ripping the paper to shreds while glaring at passerbys for the guilty party would be priceless !!
1. Fed- Kept rates too low for too long. No regulation.
2. Ratings agencies- Rubber stamped junk MBS as AAA, fraud.
3. Investment Banks- Peddled above junk MBS worldwide, fraud.
4. Time-tested underwriting standards thrown out the window to then bag hefty commissions on toxic loans, fraud.
5. REIC - Shills/fraud/commission chasers.
6. Appraisers- Rubber stampers, fraudsters.
7. Loan Brokers- Fraudsters, commission chasers.
8. FB’s- Specuvestors or MEW masters looking for a fast buck of free money. Mortgage fraud galor.
9. HB’s- Overbuilding of low grade housing, collusion, fraud.
10. Gubmint: Encouraged all of the above to increase the tax haul and line their own pockets in the process. Friends of Angelo.
always good to see this as a reminder
dont worry, these folks made a bundle while your tax $$ will be used to “rescue” them on the downside - yipee
bottomfisherman,
-galor
+galore
(Other than that I agree completely, but don’t tell anyone, I’d hate to be labeled as an “extremist”)
This Crime Wave part caught my eye.
We had a Crime Wave starting in 02-03? Now the crime wave is hitting the beach and watch out people!
Bottomfisherman and the rest . I like your summary because you include the entire chain of fraud, where I was just looking at the front line set-up . Of course the fraud could not of been possible had the whole chain you mentioned been on the up and up .Every possible check and balance system closed their eyes .
Yep, all done on a wink and a nod while the fraudsters raked it in.
Now that most the world has caught on to the U.S. Ponzi scheme it’ll be a long time before they’ll trust the U.S., its junk paper, RE and toilet paper dollars. Lots of foreigners got heavily reamed in all of this and they won’t be forgetting it for a long long time.
“‘There are still a large number of folks that want to buy in our area and cannot do so until they sell their homes in other areas,’ Douglass said. ‘We can’t put our heads in the sand. It’s just the reality of it.’”
Can’t put your heads in the sand because those heads are already firmly lodged somewhere else?
If only there were still buyers at overinflated asking prices elsewhere, there would be buyers at the overinflated asking prices here?
Og say low price bad! High price good! Og!
One last escapee from Rockwall…. I hope.
Inspection on my house is taking place this afternoon. If I make it through the next 3-4 days with no issues raised we should be good to close on the 18th.
If it closes, expect me to throw a virtual party here.
Just got off the phone with the Rockwall Appraisal district this morning. You can’t tell me they are being honest with their appraisals. Two months ago they sent out a new appraisal at $335k. Supposedly it was based on their data for Jan 1, 2008. I file a protest. The appraiser calls me this morning while I’m in the shower and the very first thing she does is say “Based on the comps, I have a value of $279k”. Gee, a $56k, or a 20% discrepancy in their own calculations from the same data. I wonder how *that* happened.
Sounds like a reasonable range. Of course, this assumes the planning department uses Zillow for their appraisal data.
Hi everyone! How were your 4th of Julys? Great, I hope.
Guess what? Yes, that’s right, I’m in Utarr! Right now. I about barfed when I looked out the window of the airplane as we descended into Salt Lake City. Jeeze, the Land of the Saints never met a super ugly subdivision and/or an idiotic traffic plan they didn’t like, so much is clear. I can’t wait until Sweet Baby Jesus comes to town because I bet He tells everyone, ‘That’s not what I meant when I said ‘multiply and replenish the earth’. And then we’ll see some righteous action! I hope He loses His temper and super-sizes Hisself to be about 100 feet tall and then kicks the crap out of downtown, roaring and shouting, like Godzilla. The REAL ‘Godzilla’, see. Except in sandals, with a halo. I’m going to suggest it to Him next time we hang out.
Anyhow, Utarr has been befooked. I had to shut my eyes and pretend I was somewhere else. I did that all the way down south until I reached my mom’s house. I’ve been riding horsies around and around and around and around. Also a mule. A giant mutant mule with stripes here and there like a zebra. Her name is ‘Zeta’, or else ‘That Giant Mutant Mule You Got Out There.’ The top of my head is sunburnt horrible now, as a result. Summer in Utarr, is turns out, is quite hot and sunny. I had forgotten, but I remember now. My boiled head reminds me every time I try to move it.
(Oh, Ben, this isn’t off-topic, because it includes a bit about divinity, and that kind of cancels it out, I believe.)
Olygal,
The correct pronunciation is actually:
Goh-zeera
Cue the Blue Oyster Cult… NOW!
Oh, thanks, DinOR. I always like to learn correct pronunciations. And, as thanks, I’m going to sing ‘Godzilla’, Blue Oyster style, loud enough so you can hear it in Oregon. My uncles had a bunch of their albums and they thought it was funny to teach a little lass in pigtails to bellow ‘Don’t Fear the Reaper’ and so forth. Ah, fond memories.
I gotta fever……..
and the only prescription is MORE COWBELL…..
at least people in TX have some balls- they boom and bust and don’t care- best folks to sell to
some other parts of the country
5% stock drop= emergency/crisis/ need bailout
taxmeupthebooty,
I can think of no higher compliment! Well said Sir. I don’t know that I have anything to “sell” them necessarily but it’s nice to know there are still some folks left that appreciate the core values of what capitalism is supposed to be about.
We should learn from them.
Amen. Spouse is still POed about various bailout plans now after we took a hammering with the early ’80s oil bust. We got rid of it by bringing a check to the closing. Hurt at the time, but a cheap lesson to learn in retrospect. The whining in FL sets a new standard, especially since so much of it was HELOC. What part of “You don’t make money until you sell it at a profit.” is hard to understand? Ahh. The good ol’ days of the 1870 Texas Constitution. No HELOCs. Equity to ride out a downturn.
fran chise,
Especially considering that homes that sat on the market without a single offer in trendy upscale FL neighborhoods “suddenly” rec’d above-asking offers as if there was a “bidding war” in 2006? How neighbors can play musical homes/appraisal fraud and still be a victim is a miracle to me?
txchick has brass 1s?
How many times have we heard in the last 2 years that Texas RE won’t go down because
a) It never went up
b) Austin is the center of the earth
c) Everyone from California wants to live in TX
Now it’s time for the TX RE mobsters to dine on a big plate of steaming $hit……. their own.
Yeah! Austin is the next Manhattan! And they’re running out of land there.
I have a friend who just had to move from SF back to Austin. He bought a house in Austin a couple of years ago and was renting it out. Why did he have to move? Because the landlord of his current SF rental went into foreclosure….
A few years ago, this guy sold his little .com company for about $1M. (Yes, companies are still stupid enough to do this, even in 2006!).
I think the money’s gone now. He gets mad when I talk about it (though he was proud of it a couple of years ago.)
- CA and the Feds took about 50%. (He had a CA address when he made the deal…)
- I’m not sure what the terms of his Austin mortgage are and what his down payment was
- The remaining money, about $450K, he put in the hands of some “financial planner” who told him he could get him 15% a year. I told him to run like hell from someone who makes a claim like that! I think he’s got about $200K left.
ouch,
my wife wants me to get a financial planner but I am scared to death of them…. Is there a good way to get one that is trustworthy (even at lower return potential)
(yes, I am that financially moronic)
Count me as another one who’s scared to death of financial planners. Seen too many who are little more than commission-based sales droids who are selling (uh-oh, here comes that word again) “solutions.” Y’know, “retirement solutions,” “college savings solutions,” “long-term care solutions,” that sort of thing.
So, what do I do with my massive nest egg (ha!) if I’m so scared of financial planners? Well, over the years, I’ve read a lot about planning. And I’ve talked to a lot of people. And I still do these things.
I can’t imagine they can do any better than, say, putting all your money into one of those “Vanguard 20xx” funds…(e.g, the 2020 fund for people planning to retire in 2020 balances the stock/bond ratio accordingly.)…and just leaving it alone!
(Of course, I personally like to own some exchange-traded gold+silver, and have half my money in non-US stock markets.)
c) Everyone from California wants to live in TX
That’s a knee slapper!
If so, why do Texans spend so much time in Colorado?
We were skiing in Taos about 10 years ago over xmas, and there wasn’t a lot of snow, but there was a constant supply of Texans on gurneys, making their last run down the hill, courtesy of the ski patrol.
exeter,
In part b, you left out “and now everybody knows how cool Austin is”
and d) everyone rich and cool and hip (not just Californians) wants to live in Austin, and there are so many of them
If you bring the big pots of steaming $hit and the plates, I will bring the ladles and the forks and napkins. Forget the napkins - let them use toilet paper.
I can probably make good on that Hip.
Hey…. I’ve twice turned down projects in TX. Most recently, when the HR manager of an un-named firm stated “housing is really affordable in the outlying areas of Austin. $275k is the typical price”.
I told him to forget about it. The only good thing about the gig was that it’s with a very old and respected TX/southwest firm that needed permanent guys to replace all the retiring construction management folks. If I thought I’d like to live in the southwest for the next 20 years, I might have pulled the trigger. Couldn’t make that commitment in light of the salary. It was a weak.
Exeter, that’s funny — I moved to Austin in the early 90s after their last real estate bust and former big shots were still walking around with a haunted look in their eye.
For the Austin crowd, I worked at Katz’s Deli for awhile and the famed [and sometimes reviled!] owner Marc Katz told me stories about guys making million dollar deals on bar naps. We had one regular customer, a former high roller, who we basically didn’t charge for coffee because he was broke, fiscally and mentally.
Then there was another mini boom in the 90s, and everyone was a genius again. Once dubya became gov 3 things happened in the capital of Texas — more lobbyists, high dollar restaurants and hookers. They were bussing them in from Dallas. The hookers, but maybe the lobbyists, too. When I left there was a high rise skeleton off I-35, IIRC, which I believe was a cancelled Intel building.
So in the late 90s, you had a tech bust, & a mini real estate bust. Now add that to the late 80s bust, plus the current one — AND NOTHING EVER GOES DOWN IN TEXAS.
Except for the hookers from Dallas.
Assuming that the hookers knew what to do with the high rise, of course.
“former big shots were still walking around with a haunted look in their eye…”
and trying to get hooked up with a substitute teaching gig…
Lots of nicer houses here on the NW side are still being offered 10%-15% over the 2008 assessments. This seems crazy - the property taxes on a 300k house are pushing 8k per year - that is a pretty large tax nut.
D-FW are was over being over developed as it was. How much of the decline can be attributed to market correcting in unclear.
I think that very same thought as I’m flying in and out of DFW. I think about those people down below, who are forced to listen to jets like the one I’m in. And there’s no letup. They’re hearing the noise 24/7/365.
DFW isn’t Vegas, there are no 2am flights….the airport is pretty much closed up between 11pm-6am.
Would someone in Texas please give me a quick opinion on the price situation in Houston? I’m reading article after article that claims Houston never really experienced the recent inflated prices (including one 2005 post by Ben supporting that claim). I’m also reading that Houston homes are sitting on the market without selling and that prices are falling.
Are both things true? Is it possible that Houston might have realistic prices? Or is it still knife catching territory?
Same as Dallas. Inner city - huge bubble - lots of oil money and extremely overpriced. Burbs are a different story.
Thanks for the reply!
This $300k mansion has been making me drool. The price seems amazing, but I don’t have a feel for what is realistic in Houston. I can see that property taxes are quite high, though.
This is a reduced price so it seems that the seller is not having an easy time unloading the property. I’m going to watch it to see what finally happens.
Again, thanks!
Champions, etc. - that’s way north of downtown near Intercontinental Airport. I’d take a crack at that myself depending on the neighborhood.
That does look like a nice home.
If I lived there I might take a run at it.
IMHO, Houston has some of the most god awful
weather on the planet.
I wonder what the monthly A/C bill is?
Mike
Hell,that seems like a nice house for the price .Is the house sitting next to a dump? I guess that house would cost a lot to heat and cool ,but still it seems like it’s in pretty good shape .Hell, I’m tainted by living in California Bubble Town for so many years .
Seems like the difference with Houston is that prices are currently propped up by the oil profits, whereas with other areas prices were propped up by themselves. Thus most areas prices are already coming down, whereas Houston will come down later when (if) oil prices come down (e.g. like what happened in the late 80’s to Houston RE).
Still_waiting wrote, “Would someone in Texas please give me a quick opinion on the price situation in Houston?”
I grew up in Houston and lived there again for a short stint in 2004-2005 and my impression was that there were a couple areas in Houston that offered good value.
I’d recommend the (Houston) Heights area just north of downtown; it’s a nice neighborhood with lots of character (ie, giant live oaks along the streets, older homes from the 1930s, parks and good restaurants, etc.) and I remember asking prices for 1,800 to 2,000 sq ft homes starting at around $240K or so….it’s only about 5 miles to downtown from the Heights and you can take the surface roads and avoid the crazy highways that Houston is famous for.
The Museum district north of Hermann Park and west of Hwy 59 (especially the area around the Holocaust Museum) is also worth checking out and similar to the Heights area in terms of price and quality of life.
Thanks for the advice………..from all of you.