Bad news on the housing and job fronts for Austin/Central Texas (Houston: transplants, for sale)

[TexasHorseLady]

Originally Posted by austin-steve

From the article:



So, let's ask what this "98%" increase means. Doesn't seem that bad to me, as hoffdano pointed out with a quote from the actual article.

Before the 98% increase, how many homes out of 655 were in danger of foreclosing? Would it be 0.5050? (1/1.98) So, if you live in a 655 home subdivision, there is one foreclosed home? And a month ago there was only a half a foreclosure, or a foreclosure every two months instead of one month?

Is that's the bad news we're talking about here?

DANG you, austin-steve, insisting on bringing perspective and math into SUCH a lovely wallow!

[orbius]

Originally Posted by austin-steve

From the article:



So, let's ask what this "98%" increase means. Doesn't seem that bad to me, as hoffdano pointed out with a quote from the actual article.

Before the 98% increase, how many homes out of 655 were in danger of foreclosing? Would it be 0.5050? (1/1.98) So, if you live in a 655 home subdivision, there is one foreclosed home? And a month ago there was only a half a foreclosure, or a foreclosure every two months instead of one month?

Is that's the bad news we're talking about here?

I think its been pointed out that fortunately Austin's numbers are better than many parts of the country. However numbers are kept for a reason and trends do have some merit. Foreclosures are increasing in Austin.

[Exiled Texan]

I do wish there were a more robust factual, unbiased analysis of real estate stats. I think it would help educate BOTH buyers and sellers. The result would make real estate agent's lives easier to clear trades.

[pjoseph2]

Inventory is increasing rapidly. Hardly anything is selling. This during peak season and historically low interest rates.

Guess where the market is headed?

It is true that foreclosures are not an issue in much of the Austin metro. And yes, the economy is doing better here than in much of the country.

But that does not make us immune to the macroeconomic climate.

Am going out on a limb and saying that the housing market is facing severe headwinds.

[austin-steve]

Am going out on a limb and saying that the housing market is facing severe headwinds.

I think you're going out on a limb in two ways...

1) There is no "the market". People use the term "the market" as if it was a singular entity describing all segments. The Real Estate Market is a collection of sub-markets upon which economic and other forces operate at varying levels of impact. This depends on price range, age, location and the product itself.

2) "severe headwinds" I would say is incorrect. Replace that with "sporadic and gusty crosswinds" and I would agree.

Homes are selling in Austin. Some with no trouble at all, others only after big price drops, some not at all. In general I'd rather be a buyer than a seller, but there are plenty of frustrated buyers unable to find what they want. I just put two listings under contract the past two days, so for those sellers, things are ok. I have another that hasn't had a showing in a month.

It's different all over, so arguing about "the market" is like arguing what the national weather is like and trying to convince people that whatever is happening in Boise is what's happening in every other city, just because it's like that in Boise.

Steve

[JayBrown80]

Originally Posted by austin-steve

It's different all over, so arguing about "the market" is like arguing what the national weather is like and trying to convince people that whatever is happening in Boise is what's happening in every other city, just because it's like that in Boise.

Steve

Or to apply your analogy to what the OP is (constantly) saying, it's much like insisting that Boise is experiencing a heat wave like no other simply b/c it is one degree warmer on July 17th this year then it was on July 17th last year. A half a percentage difference over a space of one year is an indicator of nothing.

Then to take it a step further and saying that the one degree difference proves without a shadow of a doubt that EVERY year it will get hotter and hotter until Boise is uninhabitable, that's where I tune out.

[pjoseph2]

Steve, Thanks for your perspective. Considering radically different POVs really makes me think.

Here is the world as i see it. There are a lot of anxious sellers out there. As DOM keeps climbing and their lives get tied up, this could get worse.

But there is a paucity of buyers. From personal experience, it is extremely hard to get a loan these days. We are well-qualified buyers, but the bank wanted to move heaven and earth in order to lend us some money. That included asking for brokerage statements and the type of cars we drive. That is really none of their business.

And need i mention that the government is still trying to keep the bubble inflated (and un-affordable for everyone). They have reached the end of their rope.

Based on this, there will be NO housing recovery. Even if mortgage rates reach 0% (similar to what cars and furniture are available now).

Apologies for the extremely dire news. Housing was a bubble, and it still is.

Now if well paying jobs come back, that would support current values. Hope springs eternal, but is anyone seeing evidence of that?

Best wishes to everyone.

[misterbubble]

Folks, I'm out there looking to buy at 200 plus psft. That market is devastated whether you are talking downtown, Spanish Oaks, Barton Creek or Tarrytown. A good friend just closed on a home in Tarrytown at 2/3 the 2009 county tax value. My offers are on short sales and forclosures (of which there are many and more in the pipeline) and the prices are generally 65% of the 2008 values. Maybe.

I'm also talking to lots of realtors who are all nervous (I don't know why they're not excited for buyers). When you take into account the shadow inventory (REO, Short Sale, and non performing loans) there is well over 12 month's supply. This does not bode well for sellers.

I'm from Southern California. I saw this 2 years ago in San Diego. Reality is just setting in for ya'll here in Austin. Your prices will reset at about a 2004 price.

[pjoseph2]

Mister Bubble, Desirable areas of San Diego county (North County coastal) seem to have turned around quite well. How did that happen?

The neighborhoods in Austin you mention are comparable (in price and desirability) to San Diego's La Jolla and Del Mar. What does San Diego have to offer anyway, other than beaches, sunshine and some superficial people

Back to Austin:
12 months of inventory overhang (including all the shadows) is realistic. Both the government and the banks are doing extend and pretend. It is going to be a buyer's market for a VERY long time.

[Exiled Texan]

Originally Posted by pjoseph2

We are well-qualified buyers, but the bank wanted to move heaven and earth in order to lend us some money. That included asking for brokerage statements and the type of cars we drive. That is really none of their business.

I can attest to this from my recent closing. Our loan amount was about 1.7 times our salary income. They freaked out b/c not every form was perfect from the sale of our prior home (e.g., manual edits at time of closing)....forget the fact the tranaction closed and they had certified statements from our bank showing where all proceeds resided. They also wanted COPIES of all deposited checks for the last 3-4 months. I guess they were looking for gift money, but it was so onerous. They certified all our income, calling respective HR departments (as I'd expect). Did robust appraisals. Much of it was heartening, some silly. I don't know how someone without stable, non-salary income gets a mortgage.

Bubble- NYC settled around late 2004 comps. Makes sense from a mean reversion perspective if you look at NYC's data points. Haven't done the same mean reversion analysis for Austin, but I don't think that is a crazy forecast. I know two people in Austin who decided not to sell their homes b/c they couldn't sell without having to pay the buyer on closing day due to buying in 2006. Homes didn't appraise at 2006 prices anyway.

To Steve's point, blanket statements are difficult. Every property is different. Every neighborhood different. BUT, Austin is showing delayed impact to housing bust. Weird that it is delayed. That, I don't quite understand. I guess recent inflation of Austin home prices was really impacted more than we know by Californians and NYers moving here with pockets of cash. We both know those Claifornians and NYers have A LOT less cash.

The house we bought has lovely bones, great/central secluded street, ginormous pie shaped lot, towering live oaks. Was it the cheapest house we could find? No. Did it sell quickly due to a motivated seller and a unique home, yes. Non bargain priced cookie cutter homes or homes with flaws will/are languish/ing.

I think everyone is correct and reality is somewhere in the middle.