Austin leads Texas metros in having largest % gain in foreclosures year-to-date (Dallas: sale, real estate market)

[inthecut]

Per a new Austin AmericanSt article:

And at a walloping rate too....56% jump in Austin metro area y to year...wish I was making that up....Dallas clocked in at 20% for comparison.....Austin metro has had over 1000 foreclosures posted each month for the last 9 months....In the first 8 months of this year, there were 10,098 foreclosures in the Austin metro.......

A broker in the area here said the days of "Investors Gone Wild" is long over.....we are seeing a tremendous number of investor-owned properties heading into foreclosure",........the broker predicts this situation will maintain for another 2-3 years....

And per another local agent, speaking of relocation buyers.."Mark Sprague, a local housing industry consultant, said that “nationally we have not hit bottom for home values unfortunately, which in turn affects those moving from other markets to Austin”

So what is going on here? Seems like we are talking about two RE markets in Austin...the one local RE agents are still chatting up, and the one mentioned in the article...

To sum, we have major new housing subdivisions going bankrupt all over Austin, and the fastest growing foreclosure rate in Texas, which has a high state rate as it is......am I missing something, or is the local Austin real estate market doing just fine? Can or would anyone but a RE agent talk up a market like this?

Will the real Real Estate market in Austin please stand up?

[jobert]

What? Are these residential stats only, or overall? That's a little tough to fathom. I've also heard that Austin is facing a near-term housing shortage starting in 2010 with the unending influx of people and virtual halt of housing starts. Our neighborhood has about a 1% foreclosure rate, and sale prices (actually paid) have remained unchanged per sf over the last year even as the CPI sank 2.1% and other areas declined. I will admit this country has problems, but I need to check the link.

[HappyTexan]

When Cali went bust in housing we were still ok. Texas was one of the last states to enter this recession. It has to play out here. While other states may have bottomed out they entered earlier while we were still "ok".

Texas was last or late to the party so it has to work its way through. We are not immune to what is going on in the rest of the world.

[HappyTexan]

Originally Posted by jobert

What? Are these residential stats only, or overall? That's a little tough to fathom. I've also heard that Austin is facing a near-term housing shortage starting in 2010 with the unending influx of people and virtual halt of housing starts. Our neighborhood has about a 1% foreclosure rate, and sale prices (actually paid) have remained unchanged per sf over the last year even as the CPI sank 2.1% and other areas declined. I will admit this country has problems, but I need to check the link.

When you have people coming here in bigger numbers than there are new jobs you can have problems. Add to that some pretty big layoffs and you have an even greater pool of income-less people.

Go back in the posts and you will see many posts where people come here without having a job secured.

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Originally Posted by HappyTexan

When you have people coming here in bigger numbers than there are new jobs you can have problems. Add to that some pretty big layoffs and you have an even greater pool of income-less people.

Go back in the posts and you will see many posts where people come here without having a job secured.

I can go on, but I think we are seeing something new here...before, people were coming to Austin per the quality of life, but now, many are coming out of sheer economic desperation in metros and regions bleeding massively per job loss....water seeks its own level, so people will continue to pour in until its absolutely obvious we have far fewer jobs available than people interested in taking them....I would venture that, just because of that massive influx of new folks, the local unemployment could go up to double digits......

[orbius]

Believe me if the stock market tanks again things in Texas are going to get bad. Theres a reason most states have lower property taxes and a state income tax. Its because in a deep recession or a depression when people are on unemployment and getting a much smaller 'income'. They wont be able to afford their property tax burden in Texas. If you can only pay say 75% of your property tax bill people just stop paying all together.
If the stock market gets hammered again the state of Texas is going to go bankrupt IMO. Unlike income taxes, property taxes are an all or nothing proposition. Either the person pays it all or pays none of it.

[austin-steve]

You cherry picked some quotes from the article, which I read yesterday. I was left with the impression that Austin is fairing very well, in context.

Bottom line, our buyers are still finding it difficult to find "great" deals. As the article stated, most of the bank foreclosures sell for at or slightly below market value. The stupid (beginner) investors who chased "better cash flow" into the wrong areas, thinking they could flip the home in a year or two, are being schooled at present. Most of those homes have dropped in value.

Investors who stuck to the fundamental rules of staying in better areas with mature neighborhoods, good schools and easy commutes are not under water at all. I'd ask the newbie investors who are short selling at $20K below their 2006 purchase price how that "better cash flow" worked out for them. Not well. And not well for the remaining home owners who just wanted a place to own and live.

Steve

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Originally Posted by orbius

Believe me if the stock market tanks again things in Texas are going to get bad. Theres a reason most states have lower property taxes and a state income tax. Its because in a deep recession or a depression when people are on unemployment and getting a much smaller 'income'. They wont be able to afford their property tax burden in Texas. If you can only pay say 75% of your property tax bill people just stop paying all together.
If the stock market gets hammered again the state of Texas is going to go bankrupt IMO. Unlike income taxes, property taxes are an all or nothing proposition. Either the person pays it all or pays none of it.

True..not like you can settle it with the state for a lower sum, like a credit card...either you pay or you do not.....I think the reason that T has no state income tax is simply that it trends libertarian, much like the rest of the sunbelt, and refrains from the big budget items the north and northeast have.....however, when many are in default, there is no back-up system to recoup taxes......no way to get around it..which means T would have to rewrite its constitution...

[Exiled Texan]

As a side note, our church in central Austin is reporting a 50% decline in donations as compared to a year ago. The church is still packed and the intentions include a prayer for the unemployed. I think Austin is delayed a bit, but getting hit.

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Originally Posted by Exiled Texan

As a side note, our church in central Austin is reporting a 50% decline in donations as compared to a year ago. The church is still packed and the intentions include a prayer for the unemployed. I think Austin is delayed a bit, but getting hit.

They have been getting "hit" for a long time, but not as MUCH as the rest of the USA, at least till now...a matter of degree is all.....as time goes on, particularly if swarms of newcomers continue to migrate to Austin, it will be harder and harder to maintain that constant 2.5-3% UNDER the national UR........actually, a mass of relos could easily tip the balance in bringing Austin up to the national level...happened in Las Vegas, Phoenix, and Florida, and the game is played the same over here as well, in that same sunbelt.......