Posted on 04/15/2008 10:41:29 AM PDT by dragnet2
Trend is present throughout the Houston area but is proving more prevalent in newer subdivisions outside the Beltway
A growing share of home sales in the Houston area are foreclosures.
And that's putting downward pressure on the sales prices of existing homes, according to a survey of 2007 housing prices conducted by Crawford Realty Advisors in conjunction with the University of Houston's Institute for Regional Forecasting.
Foreclosures accounted for 16.5 percent of home sales last year, with a median sales price of $100,000. That's compared with 9.6 percent in 2006 at nearly the same price.
"This is the first year in a long time the foreclosures are driving the home resales down in value," said Michael Weaster, an agent who specializes in selling foreclosures for banks.
Newer neighborhoods Though the trend is sprinkled throughout the Houston area in pockets, it is most notable in expanding or newer subdivisions outside the Beltway.
Take, for instance, Teal Run in Fresno, which saw more than 100 foreclosures. Of its 180 sales last year, 61.5 percent were foreclosures, helping to push the median sales price per square foot of homes there down 7 percent.
Craig Hayes, who has lived in his current house in Teal Run for six years — 11 total in the neighborhood — has watched his home's value decline by $10,000 as foreclosures mounted.
Hayes, the pastor at a local church, considered selling his house but figured he'd end up selling it at a loss if he moved.
"Even if I wanted to move, I couldn't, because it's not worth it," he said.
Nearby Estates of Teal Run had 47 sales, 73.2 percent of which were foreclosures, pushing the price per square foot of homes sold in the neighborhood down 3.8 percent.
A leading cause of foreclosures in newer neighborhoods, aside from lax lending standards, is a failure to anticipate tax liabilities.
For instance, closing documents sometimes reflect the land value and not the home value. The following year, when the home is put on the tax rolls, tax bills jump and homeowners may not have enough set aside in escrow to make the payments, real estate agents in the area said.
When homeowners can't sell, they also can't buy, noted real estate agent Shad Bogany.
"If you can't sell your house, you can't move out," he said. That likely will lead to a slowdown in the higher-end markets as the number of buyers looking to move up into newer or bigger houses starts to dwindle, he said.
Short sales Sellers aren't just competing with foreclosures and new-home builders.
Though the Houston Association of Realtors doesn't track the number of Houston-area homes that sell for less than what their owners owe to avoid foreclosure, more agents are disclosing such short sales on listings, a spokesman said.
So much so that the association plans to require its agents to disclose short sales starting in June so they can be tracked.
Some investors who bought foreclosures in hopes of fixing them up and selling them for a profit are feeling the pain.
Real estate broker and investor Mario Guzman Jr. had to rent one property because it couldn't sell. He has had another house in the Cypress neighborhood of Lancaster on the market for three months and figures it will take much longer to sell because of foreclosures and short sales.
Of Lancaster's 39 sales last year, 27 percent were foreclosures, which helped push the median sales price per square foot down 5.5 percent.
Yes, unstable neighborhoods have always been a big priority.
Deflating housing bubble: getting poor people and deadbeats back to renting houses.
America has strayed far beyond the basics of Capitalism 101.
LOL, I think is is funny!
I ask my nephew how he managed not to lose any money in the stock market bust. His answer was, when a PHD/CPA starts getting stock purchase tips from taxi cab drivers he thought it was a good bet to put his money in Bank Cd's.
Well with new higher end pickup trucks selling for $50,000 and the median price of some of these homes being 100k, I'd say things are far more out of whack than you realize and goes far beyond the housing market.
BINGO.
You have nailed the X-ring there.
When you look at the amount of consumer debt as well as mortgage debt out there, you see just how absurdly leveraged the consumer is.
This is why when people keep saying that I’m buying into the pessimism of the liberals when I say that the indications are that there is a recession coming, I wish they’d look at the stats on personal/consumer debt out there. There is NO WAY that this level of debt can be sustained, much less that this level of debt can be increased.
Too many people have confused credit with cash. They’re not the same. Credit can be withdrawn - as it is now, all across the economy. Cash has to go somewhere — from one party to another, into one asset class or another... but credit can disappear into thin air with the wave of a wand.
And it is doing just that. And as it does, the power of the American consumer to consume will be severely crimped.
No doubt about it. I find it amazing I'm still getting tons of junk mail urging me to buy everything imaginable. Are they joking?
I don't even look at it anymore let alone read it. I generally just grab one of those postage paid return envelopes, cram it all in there, and put it back in the box. Those things got to weigh half a pound.
“Teal Run?” Not surprising.
A relatively new, but inexpensive, neighborhood in Fort Bend County, Southwest of Houston. Unfortunately, also a high crime area.
Here is a typical news article concerning activities at the local high school:
“Links sought between Mo City shooting, school disturbance”
http://www.chron.com/disp/story.mpl/front/5701823.html
Only problem is, is most landlords saw this coming, with so many being displaced, losing their homes, the landlords have jacked up their rents accordingly. lol
Of course!
At this rate, expect crime rates to rise just about everywhere.
Actually, the article stated this is occurring throughout the Houston area or region.
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