Forbes America’s Best Long-Term Housing Bets
December 17, 2008
Behind the Numbers
Forbes.com evaluated the 40 largest Census-defined metro areas using the last 25 years of data from NAHB. We calculated volatility in supply (new construction) and demand (vacancy rates). Our measure tracks the degree of difference between how specific housing markets expand or contract in relation to the national market. If, for example, a city’s building rate grows by 5%, versus 1% nationally, there’s usually a similar pattern on the way down. That may be good for a flipper in the right place at the right time, but it’s not good for long-term investing. The top 10 cities on our list are those that grew in value, but avoided large swings in times of excess and stress.
No surprise, metro areas in California, like San Diego, Los Angeles and Sacramento–some of the nation’s most noteworthy boom-bust markets–performed poorly by this measure. Folks from all over the country move to California in boom periods, given its diversified industry, which includes everything from oil to entertainment. This is reflected in housing construction rates, which rank near the top in years when the stock market rises and jobs are plenty. Problem is, they take off when the party’s over, leaving mass unsold inventory, something home builders have yet to fully account for even though it’s a pattern dating to the 1980s.
10. Atlanta, Ga.
9. Portland, Ore.
8. Cincinnati, Ohio
7. Philadelphia, Pa.
6. St. Louis, Mo.
5. New York, N.Y.
4. Minneapolis, Minn.
3. San Antonio, Texas
2. Washington, D.C.
1. Seattle, Wash.
Read the entire article written by Matt Woolsey at Forbes.com
San Antonio continues to rank near the top whether it’s for home price appreciation, long term holds or job growth. If your an investor looking to enter a new market or you currently invest in the San Antonio market and need assistance finding properties that meet your needs, contact me today to speak with an investor friendly REALTOR.
Daniel Gaitan, REALTOR®
Trend Setter Realty
(210) 846-5282 Direct
(210) 855-8432 Fax
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San Antonio Real Estate Market Report November 2008
December 15, 2008
San Antonio November 2008 MLS Report |
||
| Sales | Sales Year Ago | % Change Year Ago |
| 1,034 | 1,526 | -32% |
| Average Price | Avg Price Year Ago | % Change Year Ago |
| $178,998 | $178,225 | 0% |
| Median Price | Med Price Year Ago | % Change Year Ago |
| $142,000 | $147,400 | -4% |
| Price Per Sq Ft | Price Per Sq Ft Year Ago | % Change Year Ago |
| $84 | $85 | -2% |
| Days On Market (DOM) | DOM Year Ago | % Change Year Ago |
| 87 | 78 | 12% |
| New Listings | Active Listings | Pending Sales |
| 2,270 | 12,546 | 949 |
| 8.0 Months of Inventory | ||
Source: SABOR
4 Updates For Home Sellers on a Budget
December 13, 2008
Want to sell your home but tight on cash? These quick fixes add the most value for the least money:
1. Paint Your Way to Profits
Painting your home before you put it on the market is one of the cheapest ways to get the highest possible price for your property. But don’t use the same color for the entire house – white walls are dull. Use soft muted colors like pale green or muted beige. They can still be neutral while greatly improving the look and feel of each room. Add white baseboards for additional style.
2. Find a Higher Price Underfoot
If you’ve got hardwood under old carpet, rip up the carpet and refinish the floors. Sanding hardwoods is physically demanding. Make a mistake and you ruin the floor. Hire a pro to sand for $1 to $1.50 a foot and then do your own staining and sealing to save money. When carpet is your only option, buy the best padding. Mid-price carpeting will look and feel fine if the padding below it is thick.
3. Tweak the Front Yard
First impressions make a huge difference. Perspective buyers tend to make up their mind before they even walk into the house. If they don’t like the outside, they’re not going to like the inside. So:
- Trim your shrubs
- Cut your grass
- Place potted flowers at the entryway
- Paint the front door
- Invest in new doorknobs, a mailbox and house numbers
4. Follow the Light
Update old light fixtures in the kitchen, bath and hallways so buyers will see why your home is worth more. Florescent lights and brass are dated. Buyers like brushed nickel, stainless steel or blown-glass style light fixtures. Recessed lighting is also a huge selling point because it brightens up the room and creates a natural-looking light.
You never want to be the last homeowner on the block to remodel. Homebuyers will pass up your property in favor of the one down the street where everything is already updated. Your home will sell slowly and for less money.
If your thinking about selling in today’s market, contact me today to schedule a free Competitive Market Analysis (CMA). Register Below to begin the process:
Sitterle Homes Ranks No. 1 In Total Homebuyer Satisfaction Survey
December 11, 2008
Sitterle Homes ranks No. 1 in total homebuyer satisfaction in the region, according to a new industry survey conducted by AVID Ratings.
San Antonio-based Sitterle not only claimed the top spot in the measure for South Central region, but was ranked among the top 10 percent of builders nationwide in terms of total homebuyer satisfaction.
Specifically, the company earned high marks in the following categories: Overall Product Satisfaction, Home Features, Overall Service Satisfaction, Project Superintendent and Recommend to a Friend.
The ranking reflects Sitterle’s emphasis on building not only quality homes but strong customer relationships, says Jeff Buell, a partner with the local homebuilder.
“We strive every day to build the best homes in San Antonio,” Buell says. “We continually examine our processes to see how to serve our homebuyer better.
“We are encouraged by these results,” Buell continues. “And we will continue doing all that we can to deliver excellent homes and service to our homebuyers.”
Madison, Wis.-based AVID is a customer-loyalty management firm that specializes in the home-building industry. The company provides surveys, employee training and other strategic solutions to more than 400 builders in the U.S. and Canada.
Established in 1964, Sitterle currently has more than 10 communities located throughout the greater San Antonio area. One of its newest neighborhoods is Campanas at Cibolo Canyons — a luxury garden-home community.
Campanas is part of the master-planned development Cibolo Canyons. Located on the far north side of San Antonio, Cibolo Canyons will also be home two new PGA-sanctioned Tournament Players Club golf courses and a new 1,000-room hotel — the JW Marriott San Antonio Hill Country Resort & Spa.
Bold Government Can Solve America’s Housing Crisis
December 9, 2008
Dr. Mark G. Dotzour,
Chief Economist, Real Estate Center at Texas A&M University
College Station, Texas
America’s housing market problem is fairly simple. Somewhere between one and two million vacant homes need tenants.
In some communities, vacant homes are not being cared for, deteriorating the quality of the surrounding neighborhoods. This is causing further price declines, which lead to more foreclosures. The fact is supply is running far ahead of demand. What has to happen for the national housing market to stop falling? We need to decrease supply and increase demand. This can be done in four stages.
First, we must curtail the supply of new homes in the market. Virtually everyone agrees that falling home prices are at the center of the current economic and financial crisis in our country. Why are new homes still being built in cities where prices are collapsing and foreclosures are skyrocketing? Even in places like Detroit and Sacramento where foreclosures are at the highest levels, thousands of new homes are still being built.
In the first nine months of 2008, 2,825 new home building permits have been issued in Sacramento and 1,528 in Detroit. When new homes are built in challenged markets and sold with massive price concessions, prices for all homes in the community trend downward.
Second, we have to slow the supply of homes coming back into the market through foreclosure. To this point, government efforts to do this have not worked. It appears the FDIC plan used to mitigate losses at IndyMac Bank offers a workable solution. FDIC Chair Sheila Bair is emerging as the new thought leader in this arena.
Simply “helping people stay in their homes” has disturbing repercussions. If you are 90 days delinquent in your mortgage and the government reduces the principal amount of your mortgage and lowers your mortgage payments significantly, what incentive do you have to get back on track? Only the stigma of bankruptcy and foreclosure will limit that trend.
If one homeowner in your neighborhood gets lower principal and lower payments, wouldn’t the other five owners on your block want the same thing? And the fact that the government is willing to consider “freezing interest rates on mortgages” and “cramming down principal” is not going unnoticed by bond investors.
Suppose you invested your grandmother’s savings in mortgages that were expected to pay her 2 percent for two years and then 6 percent for the next eight years. One day you read in the newspaper that Congress is considering freezing the interest rate at 2 percent. Then you note that the chairman of the Federal Reserve is encouraging banks to write down principal balances on mortgages. Now grandma will be lucky to get 2 percent for the life of her bond and then $700 in principal back. Will you and grandma want to buy any more of these bonds?
Third, we have to increase demand for houses, and we have to do it quickly. What are we waiting for? How long do American homeowners have to be punished before the government will step in and help stave off a larger catastrophe as house prices continue falling? How can the government do that?
Simple. It needs to give investors an incentive to purchase vacant homes and rent them to tenants. With solid mortgage underwriting standards, investors can buy these homes. There must be adequate down payment so the investor has a big incentive to keep the house. This can be done by lowering the depreciation schedule for investors who buy foreclosed houses to around five to seven years. If we really want to solve the problem quickly, offer these investors zero percent capital gains tax if they hold the properties for more than five years.
Tax policy is frequently used by the federal government to modify behavior in America. A similar tax incentive was given to all businesses after Y2K to buy computers and software because of an acute lack of demand.
By getting these vacant homes into the hands of private American citizen owners, people will have an incentive to keep the lawns mowed and the windows from being boarded up. This will help staunch the decrease in neighborhood values resulting from lack of upkeep.
Fourth, mortgage rates are way too high. Over the past ten years, the 30-year mortgage rate has been priced somewhere around 1.5 percent higher than the ten-year Treasury rate. The ten-year treasury rate has been around 3.7 percent in recent weeks. This means that under normal circumstances everyone in America should be able to get a 30-year mortgage for about 5.2 percent.
Unfortunately, mortgage rates have been much higher than that. Why? In my opinion it’s due to a complete lack of confidence in the financial integrity of Fannie Mae and Freddie Mac.
The government has now nationalized these two institutions. Why not go ahead and make the government guarantee on “FRANNIE” bonds explicit? Just tell the world that, for the foreseeable future, FRANNIE mortgage bonds are guaranteed by the full faith and credit of the U.S. government. This would drop mortgage rates substantially and let all Americans refinance their homes at a very low rate.
On Nov. 20, the ten-year treasury rate dropped to 3 percent. This should create an opportunity for all Americans to refinance with a 30-year mortgage around 4.5 percent. Everyone knows that the federal government “implicitly” was behind FRANNIE bonds. Now that they have been nationalized, make the guarantee explicit.
No matter how complex this situation appears to be, it can be reduced to supply and demand. In the housing market, we’ve got too much supply and inadequate demand. We need public policies that address these fundamental wounds in the U.S. economy. Simply printing money is a temporary bandage that merely delays the inevitable.
Kimball Hill Homes Will Close Its Doors
December 3, 2008
Kimball Hill Homes, a private builder founded in 1969, has become the latest casualty of the housing and credit crisis: the firm will close its doors after finishing the homes currently under construction.
“We deeply regret the necessity of today’s decision, but given the current housing and financial market conditions we are simply unable to conduct normal operations while the Company continues its sale efforts,” said Ken Love, Chief Executive Officer. “We believe it is appropriate to begin the wind-down process now to ensure the smoothest transition possible for our employees, our home buyers, the communities we serve, as well as our creditors.”
The Company said that it continues to have access to more than $35 million from its debtor-in-possession (DIP) financing facility, which along with home sale proceeds will provide more than ample liquidity to fund payments to contractors and trade partners and meet employee obligations throughout the sale and wind-down process.
“We have maintained very strong relationships with our trade partners and suppliers during the bankruptcy and have appreciated their ongoing support, which we anticipate will continue as we complete homes currently under construction,” Mr. Love said. “The quick resolution of our trade partners’ pre-petition claims following the bankruptcy filing was a significant achievement and we will continue to pay our suppliers as work is completed throughout the process.”
“Over the last seven months, our employees have worked tirelessly to sustain our business in an unprecedented economic downturn. I want to thank them for their dedication, loyalty and commitment to Kimball Hill Homes,” concluded Mr. Love. “I am pleased that the Company will provide both severance and outplacement assistance to impacted employees, in accordance with the Company’s standard practices, throughout the sale and wind down period.”
The Company has asked for a hearing on January 13, 2009 to approve the Disclosure Statement accompanying the Plan.
The news indicates just how difficult conditions have become for the nation’s home builders. Kimball Hill, a BUILDER 100 builder which closed 3,246 homes as recently as 2007, filed for Chapter 11 bankruptcy protection earlier this year. But restructuring proved impossible given the current state of the economy and housing market, and now the company plans to either sell the business or its assets.
MBA Reports San Antonio Is One Of The Top Housing Markets In The U.S.
December 2, 2008
Written by Aïssatou Sidimé from the Express-News. You can read the entire article at www.mysa.com.
The Mortgage Bankers Association(MBA) proclaimed San Antonio one of the top markets in the U.S. for home buyers, citing its high employment rate, population growth and better-than-average price appreciation as key factors.
San Antonio’s median home prices continued to perform better than all U.S. regions, dipping 1 percent in October from October last year, versus an 11.3 percent drop nationwide, according to data released Monday by the National Association of Realtors.
San Antonio is in the Southern region, which showed a 5.8 percent decline in median prices during the same period — the best regional performance in the nation.
“With 95 percent employment and people moving in, your glass is more than half full,” said David Kittle, chairman of the Mortgage Bankers Association, which tracks mortgages made by nonbank lenders. “You are the benchmark for the rest of the country in lending and building.”
Kittle also praised Bexar County’s low tax rate, saying it continues to attract businesses that hire new employees who are looking for homes.
Population growth in Texas is expected to remain above 2 percent next year compared with a negative projected growth rate for the United States.
A large chunk of the projected Texas population growth will be in the Denton-San Antonio-Houston triangle, according to Texas A&M University’s Real Estate Center.
The San Antonio housing market also has benefited from historically stable growth that avoided the large run-up in prices in 2005 and 2006, and the subsequent steep price declines some areas in the U.S. are experiencing now.
As a result, increases in Bexar County foreclosure listings are substantially lower than the growth in foreclosures nationwide. Foreclosure auction postings in the county are up 22.7 percent for the year, according to data provided by RexReport.com, which tracks foreclosure postings.
Nationwide, foreclosure activity is up 45 percent, according to RealtyTrac, which tracks foreclosure filings, sales and home repossessions.
“Our foreclosures are up slightly this year but not enough to worry like the rest of the U.S.,” said Michael Moore, outgoing president of the Greater San Antonio Builders Association.
