Tip of the Iceberg...

Austin area foreclosures top 15,600 in 2010

By American-Statesman staff | Monday, November 22, 2010, 01:08 PM

Foreclosure postings through the Dec. 7 auction are up 10 percent in the Austin area from a year ago, as stubborn unemployment and a slow-growing economy put financial strain on many homeowners.
Foreclosure Listing Service Inc. said 15,622 properties have been posted in Travis, Williamson, Hays and Bastrop counties this year. That’s the highest number since the Addison company began tracking Austin area postings in 2001.

Austin-area home sales headed for fourth annual drop

LOL Prices are not up. Are you kidding. The averages may be up but that's because more expensive homes have started cutting prices and are pulling the averages up. The reason homes aren't selling is that sellers, on the advice of their agents, are pricing above the market. Come on, 3 months to sell? You got the wrong price on it folks. It'll sell in 2 weeks if you price it right.

- Mr. Bubble

Austin-area home sales headed for fourth annual drop

But experts say market expected to improve starting next year.

By Shonda Novak AMERICAN-STATESMAN STAFF
Published: 9:39 p.m. Thursday, Nov. 18, 2010
Central Texas is on track for the fourth annual decline in existing home sales, although real estate experts are looking for gradual improvement in 2011.
The Austin Board of Realtors reported Thursday that the 1,221 existing home sales in October were down 31 percent from a year earlier, the fifth month in a row that sales have been below the year-earlier figure.
 

Minus 16% per ABOR in the last 2 years

Homes sales decline in June; listings hit record level

My guess is that the median price went up because more expensive properties sold relative to small ones. Sure would hate to be sellin right now...

-Mr. Bubble

Homes sales decline in June; listings hit record level | Austin American Statesman

By Shonda Novak | Tuesday, July 20, 2010, 11:25 AM

Homes sales fell 4 percent last month compared with June 2009’s volume, but the median sales price was up 4 percent, to $208,750, the Austin Board of Realtors reported today.
However, the number of homes on the market swelled to a record 11,749, a 16 percent increase from a year ago, while the number of sales in the closings pipeline fell by 23 percent, to 1,610.


Read the full story by clicking on the title...

Real Listing of Genius Award this Month...

This home in Barton Creek was listed by a realtor for $1 mil 2 years ago. This was back when Zillow would publish Zestimates in Austin. Zillow valued it at 700k or so.

After at least 2 years on the market, it is now listed at 619k. (I still don't think it will sell at that price but it's a lot closer.) So tell me again why Zillow is no good? Tell me again why you realtors don't release sales data to us, the consumers? This seller would have been better off with an algorithm.

2305 Barton Creek Blvd, Austin, TX 78735 MLS# 5152235 - Zillow

-Mr. Bubble

ARED July 15 2010 Video Blog – Pending home sales crash

Even local real estate cheerleader and KLBJ Radio guru John Mcclellan admits pending sales have crashed. Not sure why he thinks lower prices are "bad". They're great for buyers who are looking at buying MUCH more home!

-Mr. Bubble

ARED July 15 2010 Video Blog – Pending home sales crash!

Above is a link to John's blog...

Austin foreclosures up from '09, steady since May - Austin Business Journal

The title should be "Austin Foreclosures Up 98%!". What spin.

-Mr. Bubble

Austin foreclosures up from '09, steady since May - Austin Business Journal

While home foreclosures have jumped dramatically from a year ago in Austin, the numbers remained steady in recent months with about 1,000 homes foreclosed on or in danger of such in June, according to a new report from RealtyTrac Inc.

June statistics

One in every 655 houses foreclosed or was in danger of foreclosing in June, a 98 percent increase from the same month in 2009. While the figure is alarming, it’s only up 6 percent from May. Most real estate experts said foreclosures would start hitting the mark in both commercial and residential real estate starting in late 2009 through most of 2010, and have stressed that overall it’s more important to rely on month-to-month figures because it more accurately reflects market stability.

Click the title for the full story...

Spanish Oaks posted for foreclosure | The Real Deal

I called these jerks to see about viewing property. They sales guy said they had nothing less than a million and that I wasn't qualified to be there since I had only 800k to spend. What an idiot.

-Mr. Bubble

Spanish Oaks posted for foreclosure | The Real Deal- Austin American Statesman

In another high-profile foreclosure, Comerica Bank late Tuesday posted Spanish Oaks, a 911-acre luxury residential and golf course project in Bee Cave, for the Aug. 3 foreclosure auction.

Spanish Oaks’ owners had been talks for some time with Comerica to modify the terms of a $32 million loan to avoid foreclosure. The original loan was $34.4 million, according to the foreclosure filing. The loan negotiations involved the golf course, unsold lots and undeveloped land.

Click on the title for more

Morgage Applications Crash!

Uh oh!

-Mr. Bubble

Housing Industry Gets Wake Up Call After Purchase Apps Fall To 13 Year Low

The Mortgage Bankers Association (MBA) today released its Weekly Mortgage Applications Survey for the week ending May 14, 2010.

Michael Fratantoni, MBA's Vice President of Research and Economics summed up the survey:



"Purchase applications plummeted 27 percent last week and have declined almost 20 percent over the past month, despite relatively low interest rates. The data continue to suggest that the tax credit pulled sales into April at the expense of the remainder of the spring buying season. In fact, this drop occurred even as rates on 30-year fixed-rate mortgages continued to fall, and at 4.83 percent are at their lowest level since November 2009....However, refinance borrowers did react to these lower rates, with refi applications up almost 15 percent, hitting their highest level in nine weeks."

More here...

Thanks to realtor Paul Smith for this info. Paul is an excellent buyer's agent.

Skyrocketing Foreclosures in Austin!

The number of home foreclosures in the Austin area increased 45 percent in April compared to one year ago, according to RealtyTrac Inc., a group that monitors foreclosed properties in the United States.

Link to Article....

Duh! Finally the Government Sees the Bubble

Hmm. I didn't know that your property values keep rising due the the ten percent maximum annual increase rule even when your property didn't actually rise in that year. That helps explain why people thought property hadn't really fallen in Austin in 2008-9. Much of the data was driven by the TCAD values due to the fact that nobody release the MLS data.

- Mr. Bubble

Travis property values face first drop since 2003

5.3 percent projected decline would mean a $6.5 billion hit to tax rolls.

By Laylan Copelin and Shonda Novak
AMERICAN-STATESMAN STAFF

Published: 11:44 p.m. Friday, April 9, 2010
The recession that wiped out thousands of jobs in Central Texas also erased $6.5 billion from the market value of Travis County properties.
The 5.3 percent drop in values from 2009 was the first decline since 2003, according to preliminary figures from the Travis Central Appraisal District.

more...

Beware of Pocket Listings

Pocket listings are quite common in Austin.  I think many sellers are denied maximum market prices for these deals and we are all denied the price information the sale contains. Do yourself a favor, list in the MLS and require your agent to present you with all offers.

- Mr. Bubble

 

Happens Every Day

Reno attorney and real estate investor William Thornton has filed a complaint with the Nevada Real Estate Division against local real estate figures Karen Greathouse and Nancy Fennell of Dickson Realty.

March Austin List Prices from Zillow

Hmm? Interesting trend in Austin list prices... recovery?

- Mr. Bubble

Median List Price

More West Lake Hills Home Value

Median List Price

More Austin Home Values

Fixed-Mortgage Rates Jump - WSJ.com

Fixed-Mortgage Rates Jump - WSJ.com

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Austin Feb Home Prices Down 3% over Feb 2009

 Sure sounds different than what the realtors say doesn't it?

- Mr. Bubble

	Sales	Change from Last Year	Median Price	Change from Last Year	Months' Inventory
Austin	1,276	up 7%	$182,000	down 3%	6.2
Dallas	2,707	down 9%	$149,200	up 1%	6.1
Fort Bend	510	down 7%	$188,700	up 8%	4.8
Fort Worth	538	up 5%	$106,000	down 3%	6.5
Houston	3,615	down 4%	$146,600	up 6%	6.6
Longview-Marshall	116	down 12%	$120,000	up 1%	8.9
Odessa	67	up 26%	$123,100	down 5%	5.8
San Antonio	1,239	up 7%	$140,700	down 1%	7.8
Temple-Belton	94	down 10%	$110,800	down 11%	6.7
Victoria	61	up 33%	$109,200	down 23%	6.6
Texas	13,064	down 2%	$141,100	up 2%	6.9

Attention Barton Creek, Westlake, Tarrytown, Downtown Sellers

The article speaks for itself but there's one thing they miss. The writers say that now is the best time to buy because rates are rising. Then they give this example of how your payment goes up as rates rise. Well, duh, don't you think prices will fall as these rates rise?

- Mr. Bubble

Castles for the Common Man - WSJ.com

Time to Storm the Castle?

At the High End, a Bit More Money Yields Lots More Home; 14 Acres and an Orchard

Daniel Horowitz is ready to bargain.
The 55-year-old trial lawyer is trying to sell a four-bedroom villa with marble imported from Italy, a winery and a fruit orchard on 14 acres in Lafayette, Calif. Mr. Horowitz already chopped the price to $3.2 million from $4 million, the amount he estimates having spent on the land and construction. "We thought it would sell right away," he says. But it hasn't, and he is willing to consider lower offers, he says.

Mansions for Sale

View Slideshow

Three years into the housing bust, steep discounts are emerging in the market for high-end homes, which had been the real-estate industry's last redoubt until now. Despite the budding economic recovery, demand for pricey properties is falling as potential buyers struggle to come up with money for big down payments and find it difficult to qualify for large mortgages. With buyers dropping out and homes languishing on the market, sellers are beginning to capitulate, cutting prices to move their properties.


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What Spin!

 All of you real estate cheerleaders should take note of this. Unemployment in Austin is RISING, rates are going up, foreclosures are increasing, and federal homeowner subsidies are ending.

- Mr. Bubble

Austin job losses moderate in February | Statesman Business Blog

By American-Statesman staff | Thursday, March 25, 2010, 09:19 AM 

The Austin area lost jobs at a 0.6 percent annual rate in February, compared to a 1.3 percent year-over-year drop in January.

The Texas Workforce Commission said the area’s unemployment rate was 7.2 percent, down from 7.6 percent in January but up from 6.6 percent a year earlier.

The steepest losses continue to be in the construction and manufacturing sectors, which combined lost 5,500 jobs between February 2009 and last month.
But the leisure and hospitality sector — such as hotels and restaurants — gained 5,000 jobs over the same period.

Statewide, the Workforce Commission said the unemployment rate was 8.2 percent last month, the level it has held at for four months in a row.


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Housing market's recovery appears at risk- Statesman

Glad to see the Statesman is taking note.

-Mr. Bubble

Housing market's recovery appears at risk

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More Bad News Via One of Austin's Pros

Here KLBJ real estate radio host John McClellan informs about another ominous sign for real estate sellers in 2010. (Great for buyers though!)

- Mr. Bubble

USDA in Jeopardy!

by John McClellan on March 16, 2010

It has recently been announced that the USDA loan program will be out of money by the end of April 2010. In any typical year the USDA loan program has plenty of funds to make loans through the end of the year. Over the last few years as other “0″ down loan programs have disappeared, USDA has stepped up to fill the void and provide affordable “0″ down loans for first time homebuyers across the nation. This increased demand for USDA loans has led to a shortfall the last two years in funds needed to keep this program solvent. Last year the stimulus money was used to bridge the funding gap and business went along as usual. This year however there is no stimulus money left to bridge the funding gap and it looks like that sometime in April we will be out of funds and USDA will stop issuing commitments until their normal refunding takes place (sometime in the late fall).

More here...

A Sober Realtor- Bill Morris

I always like to point out to realtors that they represent both buyers and sellers. They seem to act like they only represent sellers because they are loath to discuss the market down-cycle realistically...hence this blog. Anyway, for buyers, Austin's struggling market is great news and I want you to call honest realtors have have them make offers for you!

I came across Bill's blog post on building permits today and I thought I'd share it with you. He tells it like it is.

- Mr. Bubble

Austin Metro Building Permits

Much of what I have written about the “state of the market” in and around Austin has focused on resale homes.  New construction is obviously an important part of the market, and it’s a great barometer for confidence in the local economy, job growth, investment opportunities, etc.
This chart summarizes residential building permits issued from January 2000 to January 2010:

Austin Area Building Permits

Click the article title to link to Bill's blog...

Case and Point!

Can we please stop pretending that high end real estate has not collapsed in Austin? 


-Mr. Bubble

Spanish Oaks developers seeking new terms from lender
AMERICAN-STATESMAN STAFF
Published: 9:36 p.m. Friday, March 5, 2010

Owners of Spanish Oaks, a 911-acre luxury residential and golf course development in Bee Cave, are in talks with their lenders to revise the terms of a $32 million loan and avert foreclosure.
Daniel Porter, Spanish Oaks' original developer, said that the problem arose when a recent appraisal valued the project at less than the amount required under the terms of the loan from Comerica Bank.
Porter said he couldn't disclose the appraisal amount.

More at the link above...

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So Jobs Dictate Demand for Homes Right?

OK, so everyone in real estate says, Mr. Bubble, our homes haven't declined in value because of all the job growth in Austin....

- Mr. Bubble

Job plunge in January is steepest of recession

Unemployment rate hits 7.6%; worse news may be coming

By Barry Harrell AMERICAN-STATESMAN STAFF
The Austin metro area's unemployment rate rose in January, according to the Texas Workforce Commission, and more bad job news for the state could be on the way.
The five-county Austin-Round Rock metro area had 10,000 fewer jobs in January than it did a year earlier. That was a 1.3 percent drop — the steepest during the recession began in December 2007. A key reason was the layoff of retail workers hired for the winter holidays, as well as continuing cuts in construction and manufacturing, which have been hit hard during the downturn.
The area's unemployment rate was 7.6 percent.
That's a jump from 7 percent unemployment in December and compares with a jobless rate of 6.5 percent in January 2009.

More at the link above


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Buyers Shift More Firmly Into Driver's Seat During January

Buyers Shift More Firmly Into Driver's Seat During January

For the second month in a row, homebuyers across much of the country negotiated bigger discounts off the last listing price of homes than they had the prior month.

Buyers in the United States paid a final sale price of 2.8%, or $5,823, less than the last listing price during January, up from a median discount of 2.7% in December and 2.6% in November. December marked the first time in 11 months that buyers gained back negotiating power; for much of 2009, buyer discounts shrank as real estate markets across the country improved.

More via the link above...

Austin Real Estate Blog: Austin Real Estate Sales Hits the Skids

I agree with this author except for one thing. I don't think buyers will wait for rates to rise and the tax credit to expire to start offering less for real estate in Austin. That information will immediately be reflected in prices offered. In other words, prices have already cratered, that's why sales are scarce over 400k.

- Mr. Bubble

Austin Real Estate Blog: Austin Real Estate Sales Hits the Skids

So to get out of the way the one positive factor this month, compared to last year at this time sales are up, Inventory is down, median and average prices are up. Sounds great right. But there is a huge huge caveat to that. January 2009 was the worst sales month in 10 years. And January 2010 is the second worst month in 10 years. Personally our sales were down in January and I thought we had just had a bad month. I was oddly relieved to see that the whole market was down.

Read the rest of this blog post via the link above...


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$228 sq ft for NEW Condo's Downtown Austin!

Do you sellers currently in the MLS at $400 sq ft hear that?

-Mr. Bubble

Sabine Auction Results! | News | austintowers.net

February 28, 2010 21:22 Filed in: News

Today, more than 200 registered bidders showed up to compete for 31 units in the much anticipated Sabine auction. In the end, 29 of 31 units sold for an average 30.5% discount with a final price per square foot of $228. With strong demand, the developer added four units into the auction: three just days before the sale and the fourth unit during the auction.

More via the link above...


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Into the Abyss

Let's see... high unemployment. Check. Tax increases on the horizon to decrease business incentive. Check. Likelihood of rising interest rates. Check. Destruction of banking, healthcare and auto industries. Check. Interference with normal market forces by halting foreclosures. Check. What a shocking article?

- Mr. Bubble

Sales of existing homes hit lowest level since summer

Though numbers higher than a year ago, downward monthly trend disheartening to economists.

By Dina ElBoghdady THE WASHINGTON POST

The sales of previously owned homes sagged in January for the second month in a row, sliding to their lowest point since summer and renewing concerns about the housing market's potential for a rebound, according to industry statistics released Friday.

Sales of existing houses, townhouses, condominiums and cooperatives fell 7.2 percent to a seasonally adjusted annual rate of 5.05 million in January from December, the National Association of Realtors reported.

More via the link above...

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My Hero

I just love this guy.

- Mr. Bubble

Frustrated Owner Bulldozes Home Ahead Of Foreclosure - Cincinnati News Story - WLWT Cincinnati

MOSCOW, Ohio -- Like many people, Terry Hoskins has had troubles with his bank. But his solution to foreclosure might be unique.Hoskins said he's been in a struggle with RiverHills Bank over his Clermont County home for nearly a decade, a struggle that was coming to an end as the bank began foreclosure proceedings on his $350,000 home.

Austin-area foreclosures rise

 Well, Here they come...

- Mr. Bubble

Austin-area foreclosures rise

Postings for March auction increase despite recent signs of improvement.

AMERICAN-STATESMAN STAFF
Published: 8:45 p.m. Monday, Feb. 15, 2010
Austin-area residential foreclosures have jumped, dimming prospects for a drop after months of year-over-year increases.
Last month, the wave of foreclosures appeared to be subsiding, as postings for the February auction were up just 2 percent from a year earlier. It was the smallest increase in months.

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Double Dip Real Estate Plunge Says Zillow Econ

I know he doesn't mention Texas as a double dipper, but the same forces will be at work in Austin...especially at the high end. Failed HAMP, rising rates, unemployment, and more foreclosures. All US real estate markets are linked, much of the money that would buy expensive Austin homes comes from other areas of the US.

- Mr. Bubble

Mortgage rates poised to jump as Fed cuts funds

Wonder what this will do to home prices? Stay tuned...

-Mr. Bubble



Mortgage rates poised to jump as Fed cuts funds

The Federal Reserve is poised to turn off a major money spigot that has helped sustain the ailing real estate sector, as an extraordinary program under which the Fed has pumped $1.25 trillion into the mortgage market is slated to end March 31.
"Housing has been on government life support, and without it the crash would have been much more severe," said Mark Zandi, chief economist with Moody's Economy.com in Pennsylvania. "This spring and summer as those policy efforts unwind, we most likely will see mortgage rates move higher and more house-price declines."

Click the headline to read the rest....


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Austin Rents Fall 5%

More downward pressure on prices from the weak job market.


-Mr. Bubble

TEXAS MULTIFAMILY OCCUPANCY, RENTS DOWN LAST MONTH

CARROLLTON (ALNsystems.com) – The number of apartments rented statewide dropped 2.4 percent between December 2008 and December 2009, according to the latest figures from ALN. Meanwhile, rents fell by an average of 2.5 percent.
Here's how select cities fared for the year ending December 2009:

Austin
Occupancy stayed roughly the same, while average monthly rent dropped 4.7 percent from $827 to $788.

Texas Unemployment Still Rising

Tell me again why home prices will start rising?

-Mr. Bubble


Texas Economic Review January 2010

The nation's labor market hit bottom in August 2009 but the Texas labor market has not yet hit bottom. The Texas economy lost 277,400 nonfarm jobs from December 2008 to December 2009, an annual job loss of 2.6 percent. Over the same period, the U.S. economy lost more than 4 million jobs or 3 percent of its total nonfarm jobs. The state's seasonally adjusted unemployment rate rose from 5.6 percent in December 2008 to 8.3 percent in December 2009, while the U.S. rate rose from 7.4 percent to 10 percent during the same period.

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Wonder If This Had Anything To Do With The RE Crisis?

Look at the Fed Funds rate since 2000. It sure seems to track the national housing bubble well. Now, I don't want to be Al Gore-like and assume this correlation. I wander what will happen to housing prices when the Fed starts raising rates this year? It is astounding to me that RE prices are this low with mortgage rates so LOW!

Mr. Bubble

More Data for the High-End

Thank you to one real estate agent who puts out this data. I'm not going to name her so all the other agents don't hate on her. But, here's the map of Austin and the land as I suppose the MLS system classifies it. (Remember, I'm not a real estate professional. I'm just a buyer trying to understand how things work)

So the premise for this blog is that the high end areas are suffering from financial devastation to the buyers of these homes. They can't get jumbo loans, their investment porfolios are decimated, their businesses are suffering, and they can't sell their homes in places like California because they are under water.

Months of supply on the market for homes over $800,000:

                 4th Q
Area 1B    14.4
Area 8E    10.5
Area 8W   15.8
Area W     12.6
Area LN    42.9
Area LS     25.0
Area RN    17.1

These DOM numbers did decrease in the 4th quarter but I don't think it's because lots of homes sold in these price ranges. I think it's because homes were taken off the market and rented or are now being marketed as "pocket listings". There's some guy on Craigslist trying to rent out high end homes really cheaply if you have nice furniture and will leave right away if they sell it. I really don't understand these agents. Instead of telling these high end owners to lower prices and sell now, they tell them to move in tenants and wait for the recovery, which may not come soon at the high end.

Anyway, from 1-3 years of supply? Come on! Your prices are in the tank. Lower them and stop carrying this property people.

December home sales down nearly 17 percent - UH OH

This can't be good for high end prices in Austin. Especially with Texas unemployment rising (and expected to continue rising)

This YOY drop is in spite of massive federal intervention to prop up real estate markets. Yikes!  This is consistent with my theory that Texas didn't avoid the recession. It merely lagged the coasts by 18 months. Real estate prices will continue to fall...

-Mr. Bubble



December home sales down nearly 17 percent - Yahoo! Finance

Home sales plunge nearly 17 percent in December after tax credit deadline extended

By Alan Zibel, AP Real Estate Writer , On Monday January 25, 2010, 10:40 am EST

WASHINGTON (AP) -- Sales of previously occupied homes took the largest monthly drop in more than 40 years last month, sinking more dramatically than expected after lawmakers gave buyers additional time to use a tax credit.
The report reflects a sharp drop in demand after buyers stopped scrambling to qualify for a tax credit of up to $8,000 for first-time homeowners. It had been due to expire on Nov. 30. But Congress extended the deadline until April 30 and expanded it with a new $6,500 credit for existing homeowners who move.

...

Property Sold Outside of the MLS - A Bad Thing

So I've been poking around Austin to buy a property for the last few months. First, I'm frustrated by the fact that Austin has this "non-disclosure" rule whereby sales are not reported and available to buyers. Well, at least realtors can get you MLS sales data right?

Well, there are two things wrong with MLS sales data:

1. It's self reported. That means you are depending on realtors to voluntarily report the prices. They have some fairly powerful incentives not to report the right number which makes me suspicious. (In California where I live all sales are recorded under penalty of perjury at the county recorder. So, even if you sell it to your brother the market knows the price)

2. Lots of people are trying to sell real property without listing it in the MLS. This includes builders and the big realtors. This didn't make sense to me until today. The reason they give is that they don't want to disturb their tenants (by getting the highest price available?) with all those pesky buyers coming around.

Of those two, #2 bothers me the most. In fact, some of the condo buildings downtown don't want to put any of their real prices in the MLS and if you do buy one for less than the publicly listed price, they make you sign a gag clause as part of sale.  Now that smacks of market manipulation.

I personally experienced a similar thing with the builders of new homes further out. They will advertise the base price of a home in the MLS and then throw in 100k in upgrades so they don't have to advertise a fully equipped home at the real prices. I'm not sure what they end up putting in the MLS since they aren't advertising a specific home. My guess is nothing.

I also think that they are trying to sell homes in high end areas like Barton Creek as "pocket listings" as well. I've run into several realtors who mention, in hushed tones, that they can show me this or that property which isn't listed and get me a "great deal". This sale, presumably at a lower price, would be hidden from future buyers allowing future sellers to sell to suckers who believe the MLS data. (Go look at see how few sales there are in Barton Creek. That's evidence that sales at 2010's admittedly lower prices are being concealed)

Folks, this a deliberate attempt by the real estate industry to AVOID SETTING NEW COMPS in a falling market. It is an attempt to withhold valuable market information from buyers in order to protect builders and existing homeowners from falling prices. I am convinced of this.

Unfortunately, all of this self serving protectionist behavior serves to decrease investment in Texas real estate.

Chicago firm makes high bid for bankrupt Hill Country Galleria

So, the Hill Country Galleria just sold for $75m. The BANK LOAN WAS  $195m! That is a major bubble in my book. So how can residential property be completely insulated from that kind of decline? Especially out in Lakeway/Bee Caves. Spanish Oaks anyone?

-Mr. Bubble

Chicago firm makes high bid for bankrupt Hill Country Galleria

A Chicago real estate firm was the high bidder in a bankruptcy auction for the Hill Country Galleria in Bee Cave and has put the mall under contract.

REIT Management & Research LLC offered $75 million for the mall, according to Eric Taube, the attorney for Hill Country Galleria LP, the partnership that owns the 2-year-old mall.

The auction was held Jan. 15 at Taube's...

Cool Time Lapse Photography of the new W

Given the falling prices downtown, you have to wonder whether this is a good thing for existing condo owners. By my math, increasing supply lowers prices even further. Better mark your units down and move them now current sellers. This baby is coming online in December...

-Mr. Bubble

The Effects of Incentives

You know what's strange about government incentives like the $8000 tax credit and low mortgage rates due to government purchase of the loans from banks? It seems to me that if you give all the home buyers an extra $8000 that prices of the homes they can buy will go up $8000. And after that incentive expires and buyers don't have the $8000, prices will fall by 8000? By my math that's a wash.

It's the same with low interest rates. If people could borrow less, prices would fall so they wouldn't have to borrow as much. The payment would be the same but the goverment wouldn't have to get involved.

I think I'll just wait till rates rise and the incentive are gone. Then I'll buy at the new lower house prices.

-Mr. Bubble

Housing thaw ahead?

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Federal mortgage insurer to tighten lending standards

Another ominous sign for potential borrowers and sellers...

- Mr. Bubble

Federal mortgage insurer to tighten lending standards

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Foreclosures- 2010 worse than 2009

Here are the stats...

"Foreclosure filings were reported on more than 2.8 million properties in 2009, up 21 percent from the previous year and 120 percent from 2007, according to RealtyTrac. With nearly 10 percent of mortgages now delinquent--which is also a new record--even more homeowners appear headed for foreclosure this year. "A massive supply of delinquent loans continues to loom over the housing market," ..."

Strategic Defaults and the Foreclosure Crisis - Yahoo! Finance

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Treasury Delay on Bank Home-Equity Debt Imperils Housing Pickup - Bloomberg.com

Estimated 3 million US foreclosures in 2010...more than 20% of us mortgages currently under water. I know the theory is that Austin ducked all of this but... markets and wealth are interconnected. People moving to the area have less equity to spend. Banks are weaker and can/will lend less.

- Mr. Bubble

Treasury Delay on Bank Home-Equity Debt Imperils Housing Pickup - Bloomberg.com

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Forclosures, Rising Rates, Weak Jobs, no HAMP

This is some seriously good spin. The Statesman says that the seasonally adjusted rate of foreclosure is accelerating, but only by 2% and that's good news. (This is after a massive government intervetion too.)What it means is that we are getting off into a rate of foreclosure that is higher than last year! As an aside, I think I heard on KLBJ that Austin foreclosures were up 78% YOY at the end of 2009.

What really concerns me is this: the HAFA disclosure. This refers to some HAMP machinations that basically will require banks who took the 8k tax credit to offer easy exits to borrowers who are behind in their payments. THAT will mean lots of short sales and Deed in Lieu's...which will mean lots of banks pushing inventory, especially high end inventory, into the Austin market.

- Mr. Bubble


Foreclosures show signs of easing
Central Texas Business Digest- statesman.com

Austin-area foreclosures show signs of easing

Austin-area foreclosure postings rose just 2 percent for the February auction from a year earlier, the smallest increase in months.

According to Foreclosure Listing Service Inc., 1,286 properties were posted for the Feb. 2 auction, up from 1,261 a year earlier. It was the lowest level in five months.

Postings were up 32 percent in Travis County from a year earlier and up 13 percent in Williamson County. They fell 7 percent in Hays County and 31 percent in Bastrop.

George Roddy Sr., president of Foreclosure Listing Service, said the trend was encouraging, but cautioned that "a change for one month does not establish a new trend. We will just have to wait and see what happens next month."

Let the Debate Begin

First of all, for you commenters below, I know you guys are pros. In fact, I listen to your show. I listen because I think you're smart guys and straight shooters. I do think, however, that I have seen a glimmer of your future though as someone living in SoCal on the coast.

The bubble of which I speak is at your high end. 500k and up. I really can't get those stats yet but I have been out there kickin the tires with Paul.  Let's take downtown for example where you had all those rich Californians buying high end condos. There's tons of inventory over 500k sitting, and sitting, and sitting. I took the list prices from Zillow for downtown here. Now that is a disturbing trend that looks frigheningly like San Diego's condo market. (You can't tell from they chart but the period is from mid 2008 through the end of 2009)

Median List Price

More Austin Home Values

Now, I'd love to have sales prices rather than list prices but I think they make my case either way.

Let's take Lakeway, where I made all of my offers. I'm serious, you can hear crickets around those homes selling for more than 500k. Here are the list prices trends there from mid 2008.

Median List Price / sq. ft.

More Lakeway Home Values

YIKES! That's list prices per square foot. Don't catch a falling knife they say in the stock investing business.

Now finally let's take the area that I really want to be in because I'm a golfer and I can play at Barton Creek. It's hard to tell much from the data below. My guess is that sales are few and far between in this area. I think BC is a lot like Solana Beach, where I live. People are wealthy enough to avoid selling so buyers and sellers are far apart,  therefore there are not many sales. Look how eratic the graph is.

Median List Price

More Barton Creek Home Values

If you pros want to chime in with some better data on I'll gladly post it. What I need is 7 years of data by zip for SALES, not listings,  on a rolling 12 month basis to take out seasonality.

Just for giggles here's Westlake per sq ft. Hmmmm.

Median List Price / sq. ft.

More West Lake Hills Home Values

That 8k from the gubment may be helping the average Austin home buyer, but it ain't doin much for the wealthy home buyer who still can't get a loan done (Appriasals?), whose business is struggling, and whose stock portfolio hasn't recovered.

Inaugural Post- Why I created this blog

Well, I'm actually a Californian who went to UT and grew up in Texas. I recently decided to buy a place in Austin, a place I love dearly. So, the first thing I did was go to my favorite website, zillow.com. For those of you who don't know, Zillow provides lots of great information about individual properties and most importantly, sales data! Zillow actually uses an algorithm to estimate home values. (called a Zestimate) I've used it lots in other states and it provides useful information. I recently sold a place in CA and it was within 2% of the Zestimate...this was in a very volatile period of prices too.

Low-and-behold, there were no Zestimates for Austin. Hmm. It turns out that realtors in Austin hate losing control of the information and won't give it to Zillow. They hide behind this story of protecting client confidentiality. (Though they will give you the information if you ask for it?)

Anyway, I did locate a very helpful realtor, Paul Smith of Prudential, via Zillow and spent the next month looking at dozens of properties. My impression of the market was that, in the 400k plus market, 80% of the listings were above the market price. Many properties have been sitting on the market for over 2 years.

Now why would sellers think they can sell their homes at a 2007 price when we know prices have fallen considerably. Why would realtors take these listings? Are the realtors afraid to tell clients that prices have fallen? Are realtors afraid to establish new comps in some neighborhoods?

You can see here that prices are falling precipitously now. So, the question is, will they fall further?

Here's my theory as I wrote to my realtor today:

"I know you don't agree but I think Austin did have a significant run up in prices from 04-07 that was related to what went on nationally. I also think that, like here, your prices will fall back to the 04 level as the economy continues to stagnate, rates rise, government incentives are withdrawn, and bank foreclosures flood your market. I primarily talking about the 600k and up market."

Oh, by the way, I made an offer to a bank on a property in Lakeway that was a foreclosure. Despite that fact that this house had been on the market for a YEAR, they declined. On another trip I made an offer to a builder (Ryland Homes) that ended 17k apart at the last minute. That was in Lakeway too.

So that's it. This blog will serve to witness my theory and hopefully coax the real estate industry to be more transparent and honest about prices. In the end, price is everything.