Mar

27

 I'm not sure where the numbers truly are when it comes to the housing bust of the recent bubble. However, I can tell you it has had a very small affect on this area and our absorption rate is healthy. Homes in the ranges of 1.2 to 4.5 are moving along in a normal pattern of sales. They are projected to jump by 12% and we are on track. One of our projects, 2100 acres of land (956 unimproved), is looking at a fair market value of 158 million. We have 14 buyers who are currently in the running for our property and expect bids to come in shortly.

The sub-prime situation has hit the lower income and mainly ethnic groups in San Antonio. Yet, I do not see a slowdown in midsize to high end homes any time soon. In fact, both West Coast and East Cost monies are flowing in to purchase homes and land.

Of course, I expect somewhat of a bump eventually, due to many sellers not going being able to unload their homes in the up and coming market. I also figure that sellers will not want to write checks, at closing, to buyers, and will sit and ride whatever storm is brewing.

Not only is the bust bringing boom to the home sales market in the South West Region of Texas, many corporations are moving into and around the city of San Antonio for the economic reasons such as inexpensive and abundant land, cheaper labor, and weather.

I came to this region two years ago to capitalize on the next recession, the next long and harsh bear market that will hurt the east and west coasts job market and real estate market, and cause individuals to migrate to less expensive areas. I think my timing was early but I know I am on the proper track.

Nonetheless, the bust is nothing but boom in the southwest region. In fact, the proposed 14-lane highway called, the Texas Trans Corridor is looking to bring in more real estate money. I will find out more in two weeks when we have a lunch with Congressman Gonzales to discuss the NAFTA and commerce.

Craig Mee adds:

Certainly in greater Sydney (Aus), where the housing market broke down earlier than the States, middle to high-priced houses on the coast have had a relatively solid floor bid. The poorer areas (and last into the "bubble") are coping with the worst of it. 


Comments

Name

Email

Website

Speak your mind

2 Comments so far

  1. Yanki Onen on March 27, 2007 7:36 am

    It all comes down to one variable…Affordability! When you look at the recent price action, it doesnt look like any body is anxious to sell and buyers are patient..it is going to be a tug of war…looking at the yield on 10 year bonds believe me money is still cheap but assets are expensive.

  2. Mulholland Drive Street Racer on March 27, 2007 9:01 am

    I have vivid memories of several Los Angeles real-estate cycles. The first, the post vietnam defense/aerospace spending contraction led downturn from 68-71ish. And the mid-70s to early 80s Carter/pre-Volcker Fed/oil shock induced weakness. And the late 80s to early 90s post S&L blow-up.

    Virtually every area I traffic, the Golden triangle of BH, BA and Holmby, Brentwood, Santa Monica, Studio City, Sherman Oaks, Encino, Tarzana, Palisades, Hollywood Hills/Mulholland Drive, Pasadena, Newport Coast, Newport Beac, Corona Del Mar, Chatsworth, Torrance, Compton, Carson, Hawthorn, Canago Park Woodland Hills, I am struck by how few homes are listed gfor sale as evidenced by signs as compared to these other periods. I would go so far as to characterize many of these areas as being sparse with For Sale signs as compared to these past periods. It’s frankly surprising given the ‘head-lines’.

    I was talking with a Swiss friend who is a researcher at Exxon-Mobil and commented that most of these areas of LA may be turning into Southern California versions of Swiss Cantons where homes and lots are removed from supply because no one will sell for the foreseeable future. Perhaps for future generations. Is it the long lasting effect of Prop 13? Is it a demographic thing? (people like the weather and want to stay and have paid off their homes long ago)

    Anyway, the ‘curbside’ appearence of LA is that it never has looked better!

Archives

Resources & Links

Search