Speculators ‘Makes Themselves At Home’ In San Antonio
My San Antonio reports that speculators are buying into that city. ” Some real estate agents say out-of-state investors, mostly from California, Arizona and Florida, now account for half their clients, while traditional families were their bread and butter up until the beginning of the year. For real estate agent Tina Ross, investors have accounted for 100 percent of her clients since January.”
“‘If they’re seasoned investors, they’re quick,’ said Ross. ‘There’s no emotion involved. They fly in. We go look. They make offers and they’re gone.’”
“Kayvan Kazemeinejad from West Sacramento, Calif., recently sold a California home and saw San Antonio as an undervalued market. Kazemeinejad couldn’t remember the subdivision he just bought a house in (Whisper Hollow) and had to look up the street name (Oak Briar). He has only seen the home once. But he loves it.”
“‘I wish I could move it to California and live in it myself,’ said Kazemeinejad, who also wants a four-plex and another single-family home.”
“San Antonio’s ‘hot market’ hype might make some prospective home buyers feel pressure to hurry up before they get priced out of the market. Randall Allsup, manager for a real estate research firm, said the bottom line for buyers is this: Move quickly. ‘If you find a house today, you’d better make an offer on it or it won’t be there,’ he said.”
“Realtors and home sellers may welcome the added sales from investors, but not everyone in San Antonio is thrilled by the attention. Builders fear neighborhoods full of renters or a slew of investor-owned resales that might compete with their own businesses as they complete subdivisions over the next few years.”
“To prevent such scenarios, builders have instituted caps on what they’ll sell to investors, rules to limit the amount of rental property allowed in a subdivision, and even contracts requiring owner occupancy.”
“‘People are saying they want to buy five or 10 houses for rentals,’ said Rick Kuper. ‘They’re eating up the inventory.’ Since October, (realtor) Aneeta Bhalla has closed 100 sales to out-of-state investors who have sold homes and must reinvest quickly to avoid capital gains taxes.”
“‘Sometimes I go and tell my husband, ‘We should be doing this and buying rental homes,’ Bhalla said. ‘It makes you feel like you’re going to miss the boat.’”
“Not to worry, says James Gaines, economist with Texas A&M. As long as the builders keep producing new homes it will put a constraint on how high prices can go, Gaines said. ‘People shouldn’t worry about price spikes,’ he said.”
‘It makes you feel like you’re going to miss the boat.’
There she is raking in commissions and she feels left out. I think you could pay folks to stand in line and people would start queing up with money in their hands.
another craiglist item:
335000 - TRUMP INTERNATIONAL Condo/Hotel, Direct Ocean View, Must Sell!!!
——————————————————————————–
Reply to: mike@SouthFloridaExperts.com
Date: 2006-04-14, 12:33AM EDT
OWNER VERY MOTIVATED!!! REDUCED OVER $150,000!!! GENERATES APPROX. $1700 NET AFTER EXPENSES /MONTH!!! PRICED FOR QUICK SALE!!! MAGNIFICENT- LUXURIOUS - DIRECT OCEAN VIEW SUITE, FULLY FURNISHED. VERY DESIRABLE
I know I would be very motivated to sell a highly desirable ocean view suite that nets me $1700/mo after expenses. Why? Because money ruins people. And yes, I would drop the price over $150K, because lets face it, this $18,400/yr positive cash flow is ruining me!
Just a guess, but maybe ‘expenses’ doesn’t include mortgage interest :).
“Not to worry, says James Gaines, economist with Texas A&M. As long as the builders keep producing new homes it will put a constraint on how high prices can go, Gaines said. ‘People shouldn’t worry about price spikes,’ he said
What an idiot!
I think you missed his meaning. I think he’s saying not to worry about rising prices and jumping on the bandwagon, because homebuilders will keep building.
I mean, as in, prices won’t stay high because of a blip in demand (speculators). However, they sure have had a big blip in the last 7 years!
‘It makes you feel like you’re going to miss the boat.’
You’re better off, the boat is gonna sink anyway.
I am amazed every day at the moronic financial decisions made by these people. San Antonio. Why not Tupelo, Mississippi or Gatlinburg, Tennessee while you’re at it. Or maybe Gary, Indiana. If it hasn’t been on the cover of Fortune as a bubble destination yet, that’s just because people haven’t “discovered” it.
It’s fitting that the last stronghold for speculators is in San Antonio,Texas.
Do you suppose the floppers are showing up in Alamo rental cars?
I am so tired of these CA “investors”, or roaches as I like to call them creating an Equity Wave that is destroying other areas. It has happened up here in Seattle as well.
If you read that SDCIA board, they know that CA is dead as far as appreciation goes, but they are CONSTANTLY searching for new areas like Boise, Austin, San Antonio, Salt Lake City etc…to throw their borrowed money into.
I can’t wait until a lot of these people get royally screwed like they are now being screwed in Arizona…
I just spoke to my realtor in Arizona yesterday and asked her how the collapse is going. She said that so far prices are staying steady and all the houses she manages as rental properties are full. This is like watching a canoe slowly approaching niagra falls and wondering when it finally goes over.
Is she being truthful? Because if you head on over to CraigsList for a little anecdotal evidence, it tells a different story.
I’m homing in on a rental in Tucson, about to seal the deal. Fantastic place and I can rent it for 3 years at less than half of what I’d pay to buy it. I’ve been scouting around for 5 months now trying to find a good deal on something in one of 3-4 bubble areas that I personally like (Fla and AZ mostly). A couple I thought I had locked in fell through when the owners would not agree to not list for sale while I am occupying the place (that’s a dealbreaker for me) but this one did agree. Unless I really hate the city (which I sincerely doubt will happen), I’ll probably end up buying this place from the owners when the lease is up. Zillow on its value chart had it going up in value from 259K about 3 years ago to as high as 450K last summer and now the “zestimate” is 362K. My goal will be to get it for 250K and I’ll bet I do within the next few years.
Oh, and I found the place on Craigslist. LOL
I am amazed by typing in “reduced” for a Phoenix real estate search on Craigslist. There are about 7 pages of properties.
Deals will abound in that area…I am serious…there will be plenty of very cheaply priced houses offered through bankruptcy fire sales.
are you going to be my neighbor?
I dunno. What part of town are you in?
Really excited about this. I have lived in Dallas 15+ years and hated every minute of it. I love Arizona.
barrio historico
(we exchanged a few emails about a place on S Meyer, remember)
TxChic
I have lived in Phoenix since 1992. I use to travel to Tucson on business several times a month. If you like stuff like concerts and entertainment (football, basketball, Golf) Phoenix is the place to be. I live in the Northwest area of the valley and there is lots to do. Also, much better shopping and dinning than in Tucson.
I like rock climbing and hiking in the backcountry. For that reason, I think Tucson is more what I was looking for. I wanted to get into Flagstaff or Sedona but couldn’t find something where the owners would agree not to list.
It’s funny how people can be so different. I grew up in Tucson, still have family there, and have lived in Dallas for the last 14 years. I love Dallas and cannot stand Tucson, though I am not a fan of rock climbing, hiking, etc. Tucson is much prettier than Dallas if you look up at the mountains, but the city itself is fairly ugly, though it does have its nice areas. Good luck.
I’ve lived in Phoenix for 27+ years. Sadly, I’m ready to leave! The congestion is making life miserable. There’s no end in sight to the ongoing sprawl. We’re overrun with illegals. The state’s economy is totally reliant on real estate and development (scrape, rape and leave the mess to the locals). The infrastructure is severely overburdened. Arizona ranks high in crime, and low in education. Huge areas of beautiful desert is forever scarred by off-roaders and 4-wheelers. The forests will again be closed due to fire dangers. Garbage and litter is everywhere…. a real disaster in the making if and when water becomes an issue.
Hooper;…Are you leaving AZ all together or just moving within ??
For a time, east side of Sierra’s in central CA, then maybe out of the country on a goodwill mission? I’m ready for a 3rd career but need some time to unwind. I spent 20 years as a RE broker/owner, then got into tech/owner. Never had a real job.
Central/East Sierra…Bishop ?
I haven’t had a real job either in over 10 years and don’t want one. I have the same thoughts you do about leaving the country and going on an adventure for the rest of my life. Maybe India, New Zealand, Australia, something like that. One of the myriad of reasons I never wanted to tie myself down to a house I couldn’t sell immediately when I wanted to leave. Scarred for life from watching the 1990s meltdown.
I am thinking of doing same - only in venice, fl. How do you know 3 months after you’ve moved in owner won’t default then what? I’m a little nervous about this.
You guys! Bishop. How’d ya know scdave? Grew up in Ridegecrest. Caught my first trout in the creek many moons ago, love backpacking, skiing.. Chic: Exactly! Also, I also thought to mention to you, better record a Request for Notice of T.S. just in case. Orlandorenter is right. Do a check.
“People are saying they want to buy five or 10 houses for rentals,” said Rick Kuper with Kuper Sotheby’s International Realty. “They’re eating up the inventory.”
Since October, Aneeta Bhalla, of Coldwell Banker, has closed 100 sales to out-of-state investors who have sold homes and must reinvest quickly to avoid capital gains taxes.
…
“Sometimes I go and tell my husband, ‘We should be doing this and buying rental homes,’” Bhalla said. “It makes you feel like you’re going to miss the boat.”
Errrrr, ummmm, is she saying “everyone is converting empty land and houses into a massive number of vacant rentals without regard to rental demand, and sometimes I tell my husband we should be doing the same”?
And people call *me* crazy…
These people are like locusts - moving from area to area, destroying it to feed their insatiable appetities for flipping, and then moving to the next area.
There is nothing wrong with investing (& perhaps even speculating), but there is something wrong when it’s done to things that are considered basic needs of people, like food & housing. It’s OK to speculate on stocks - if I get priced out of a Google stock, my life still goes on. But please don’t price me out of housing - it’s a basic need.
What is strange is the flippers/investors all go to the same place at the same time . There is somebody or something leading this herd to the newest investment area .
This reminds me of some of the telecom execs (Bernie Ebbers most notably) who cashed out big of their company’s stock in the tech bubble and then sank the money into other overvalued telecom and other stocks. Unbelieveable, isn’t it.
Many of these people get their ideas for where to invest from organizations like the Marshall Reddick network. that, together with the CNN Money article a couple of months ago (which lauded several Texan towns as being undervalued). These investment clubs all latch on to the same info, individual investors swarm the area due to the hot tip and voila!
You are correct. I know one real estate “guru” in Dallas who goes to teach a class at the Learning Annex in San Francisco once a month to recruit California investors to join his investment club in Texas.
Look, people can speculate on whatever they want, but in this case I just DON’T GET IT!
Housing is a terrible investment to be on the wrong side of because of it’s inherent illiquidity in a down market. That is why I feel that so many people are going to be financially ruined. You CANNOT just unload a depreciating asset, and the whole time you have it, it costs you money each month.
These people are going to learn a HUGE lesson about how to invest.
Don’t forget the tax policy effect. A local lady made a killing on a sale of a commercial property, only to turn around and pour it into houses for the 1031 exchange.
This is classic monetary inflation. The people who can get hold of the new money benefit most since prices have not yet adjusted to the new volume of cash. Later on as prices rise those who don’t have a connection of some kind with the sources of money get totally left behind. The injected money is not only not evenly spread geographically, it’s also very stratified demographically.
Meanwhile, Dallas/Ft. Worth defaults are at record highs.
I promise I have some pics for you this weekend from DFW. Good ones too. All is not well in Big D (that’s “D” as in “Default”)
hehehe…and this is in a period of low interest rates and unemployment.
WTF happens when the Chinaman and J*ps say, no more US debt purchases-or better yet, the Euro becomes the benchmark currency for oil. Whooowee-it’s gonna get ugly.
In 2004 we had people from LA running up to Bakersfield to buy property in new areas and bidding up costs of homes. Locals laughed because once purchased they put the property up for rent at $1700/mo or more and the houses just sat there unrented and vacant. At that time you could have rented a 2000 plus sq.ft. house in a nice area for $1100 to $1200/mo. I guess after months of eating costs they were able to flip to a greater fool.
This article perfectly encapsulates the dynamics - particularly the psychology - that have gripped the entire country for the past three years. Irrational expectations on the part of speculators, panicky first-time buyers, and swarms of real estate agents becoming speculators themselves for fear of missing the boat.
You’ve hit on a major root cause: real estate agents are True Believers in the industry and accept the view the prices never go down. There’s no better salesperson than a True Believer, particularly when stocks have been hammered.
100 homes = 250K in commisions at least,
why buy whatever you want ?
You know this just seems like your classic “pump & dump” scam… I wonder if all those realtors who are talking up “under valued” cities like San Antonio, Dallas, Houston and else where bought in last year when prices were dirt cheap.
Now they have the homes, give the area a this hype and divert Mr & Mrs Dummas speculator to Texas to buy up the investment property they are now selling at inflated prices…
This is not a rolling boom, more of a rolling scam.
The end result of this rolling boom as we are quickly learning in areas like Florida, Cal, & Arizona is once the last wave of speculators buys in they are left to pay the bill…
They are stuck with homes that are priced too high in a market that just lost 40-50% of the market from speculators and another 10-30% of the market when move up buyers can’t sell their existing homes.
S.A. has never ben expensive.. Bought in 94 for 100K it’s only worth 120 now
Don’t worry folks. Texas is where real estate bubbles go to die. All these San Antonio “investers” are going to start peeing their pants when they see their property tax bills. And when they go to sell they’ll find out the hard way that no one wants “used” houses in Texas. Not when there are new ones being thrown up 2 subdivisions away.
The thing about San Antonio and most other Texas cities is that there are no geographic or jurisdictional boundaries to growth and so there are no brakes of any sort on builders tossing up more and more houses. With the cheap immigrant labor and the ability to build 365 days a year there will never be any shortage of new houses in Texas and therefore, never any sort of shortage to force an appreciation in prices.
In a few years, San Antonio residents will have a whole new batch of housing stock to chose from when these speculators crash and burn.
Yes, you’re right about all of that but there’s no telling these people. They all know better than those of us who were here in the aftermath of the last bubble. Entire subdivisions in foreclosure. People calling on the phone after you went to an open house and begging you to buy, offering everything but their first kid.
How quickly they forget, I heard Texas’s last housing bust was one of the worst crashes in history. The old saying was “last one to leave Texas turn out the lights”. That bust was largely due to oil going dry. The major industry went bust in the 80’s.
But now we have real estate, housing and mortgage industry proping up texas’s economy just like Florida and California.
I think a lot of these “hot markets” are going to get hit with a double whammy. Housing cools and the entire ecomomy created by housing goes bust.
The crash in the late 80’s was indeed bad. With local governments and schools totally dependent on property and sales taxes, down turns have a way of quickly snowballing in Texas.
The housing crash in Collin County, north of Dallas, after the telecom meltodown in 2000, has been something to see as well. Lots of foreclosures and bankruptcies still out there and it’s a very affluent area, or was.
I do not know the San Antonio market, but my understanding is that rents there are much less than in DFW and that prices are only slightly less; i.e., it is much harder to buy rent houses that will cash flow.
A philosophical question:
Let’s say you are planning to buy in a non-bubble area that’s just been “discovered” by the pack of locusts. Do you push your plans ahead slightly before the locusts run everything up?
Example: Reno. It will surely fall… but the people who want to buy now will need to potentially wait a long time (months to years) before values ever drop to what they were pre-speculator infestment… If you knew you were going to buy in Reno before the run-up, would it have been better to buy just as you started hearing about the locusts coming?
So should a San Antonian buy now, hoping to get in before the locusts come, so that s/he doesn’t have to wait a long time for prices to correct?
Just an odd thought.
Clouseau
Inspector;…I suspect the Locusts have already arrived in San Antonio…
We live in San Antonio Ranch outside Helotes. It is disheartening to watch this hill country become cluttered with these half foundation/half houses that sit unsold at prices that San Antonioans certainly can’t pay. So what’s the plan? Are people from CA, AZ going to MOVE here? Or buy these ugly monstrosites and rent them out to the homies? Hey, in this town, they tout jobs that pay $10.35/hr. (Washington Mutual has relocated here) That isn’t going to pay the rent that I imagine the locusts expect to get.
San Antonio is actually a relatively “poor” city and always has been. I’m not understanding what is going on here - except it’s getting ugly around here.
I lived in Cedar Hill, TX for awhile and thought very seriously about buying there. I ended up buying a series of unbuilt forested lots in the hills for 10c on the dollar because they were abandoned by developers after the superconducting supercollider boondoggle died in Congress. That was a truly beautiful area, the hill country of Dallas. Sadly, the KB Homes and D.R. Hortons of the world have gone in there and shaved trees off the hills, destroyed bird habitat for beautiful and endangered birds and build shitboxes as far as the eye can see for that area of truly average income people (I would guess the median income in Cedar Hill was no more than 40K). The lots I bought were sought by developers in the past couple of years at many multiples of what I paid for them but I wouldn’t sell to them. I would prefer that the land and trees be left intact so that the wildlife (which includes things like bobcats! can you believe it!) will have a place to hide. They need it I just want to cry every time I go out there.
I feel your pain. Thank you for holding on to those lots. They are so destroying this area out on Bandera Hwy past Scenic Loop (Floores Store….) It makes my heart sick. They get their architectural ideas from like a Lowe’s book or something? Ugly poorly constructed skyhigh houses. We need some tremors to tweak those one story foundations they’re slapping together on land that simply is not amenable to building.
One good thing about the government land monopoly where I live (Canberra, Australia) is that they established and stuck to a firm policy of “no housing on the ridge lines”.
As a result, when you lift your eyes up and past the immediately adjacent buildings, you get to look at trees rather than buildings on top of the hills.
It’s sad to see all the McMansions that have gone up all along the once-beautiful Front Range of Colorado. I’m told most were bought/built by California equity nomads. The good news story, however, is that a lot of these “Garage Mahals” appraised at upwards of $1 million simply can’t be sold for anything more than 3/4 or less of that figure. The isolated houses make attractive targets for meth-addled burglars and home-invasion crews, and as gas goes up it’s getting a lot more costly to commute to Denver or Colorado Springs.
oh that is sad…last was there over 12 years ago; bet the lovely view is all gone now…:-(
I do not believe that CA investors push up prices in Texas; all they do is buy up more inventory at whatever the market price happens to be. The builders are happy enough here to be able to move their inventory and increase prices 3-5% per year.
“‘Sometimes I go and tell my husband, ‘We should be doing this and buying rental homes,’ Bhalla said. ‘It makes you feel like you’re going to miss the boat.’”
Bubblefucius say:
Panicked woman running to catch Titanic may stumble off pier in her haste and lament her misfortune. Give it a couple of days. Life-saver not always on boat.
Wow, San Antonio has always been the place to buy a new home, because the builders kept prices under control.
Has it changed? I doubt there is more than a rumor that the place is under “valued” with no asking why or what “value” means in that market.
If they’re seasoned investors, they’re quick,’ said Ross. ‘There’s no emotion involved. They fly in. We go look. They make offers and they’re gone.
No research and a half-assed look before investing a small fortune through leverage. These idiots deserve to lose their shirts. They’ll be “seasoned” soon enough.
I didn’t see this mentioned in the article, but Washington Mutual is in the process of moving quite a few jobs from WA, CA, FL, and NY to San Antonio. The brand new swanky WAMU office is already full, ground has been broken for an addition to the campus so more folks will be moved to TX in the next year. A lot of the WAMU employees, especially in management, are ex-Chase employees that were acquired by WAMU in their merger. For moving to San Antonio, they got to keep their existing salaries and received large signing bonuses. So, you have East Coast pay (from ex-Chase management types), plus CA and WA salaries, flooding a small Southwest housing market. Not sure how much of an impact this is having on housing in San Antonio, but it should be taken into consideration as we are talking more than a couple hundred jobs…
The reality we’re seeing here about Washington Mutual in SA is a bit different. Are you a real estate agent or something? We DON’T want this growth - too many problems. Like not enough water…restrictions will kick in in May. Incredible crime rate. Do people know how so very uncomfortably hot AND humid it is here for 6-7 months a year?
Also, this is no Madison WI or Seattle or Santa Clara if you get my drift on that little matter.I don’t think these folks are going to like their transfer here.
“Do people know how so very uncomfortably hot AND humid it is here for 6-7 months a year?”
This Cali girl does! I visit daughter in SA about 4 times a year and it’s hotter than Satan’s tea party there. Way too much heat for a wussy San Diego girl. Airconditioning in Texas is not an option.
And don’t forget, the “NEW AT&T” is headquartered there. Hope to hear about the last Alamo