tag:blogger.com,1999:blog-7514357.post115673256193569063..comments2024-02-25T08:16:25.546-08:00Comments on Exurban Nation: What Where When?Rob Dawghttp://www.blogger.com/profile/10042154106850545479noreply@blogger.comBlogger39125tag:blogger.com,1999:blog-7514357.post-1157126792995002402006-09-01T09:06:00.000-07:002006-09-01T09:06:00.000-07:00While I can empathize with the desire to pull up t...While I can empathize with the desire to pull up the drawbridge I believe Californicators are a symptom not a disease.Rob Dawghttps://www.blogger.com/profile/10042154106850545479noreply@blogger.comtag:blogger.com,1999:blog-7514357.post-1157120911564308262006-09-01T07:28:00.000-07:002006-09-01T07:28:00.000-07:00Please don't come to Austin.We have enough Califor...Please don't come to Austin.<BR/><BR/>We have enough California transplants.<BR/><BR/>Sincerely<BR/>Austin, TXAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-7514357.post-1157112546377883772006-09-01T05:09:00.000-07:002006-09-01T05:09:00.000-07:00You're assuming that a previously flat market was ...<I>You're assuming that a previously flat market was therefore unaffected by the bubble. </I><BR/><BR/>Exactly! While many factors that go into housing prices are and always will be local the causes of the Housing Pustule are international in scope and have provided a strong and otherwise unsustainable positive price bias. The proverbial rising tide if you will. <BR/><BR/>Like "incessant" I too think Austin will be among the least impacted this time but that may mean "only" 20% declines in price on 40% declines in volume. "Lucky" Austin. At least it won't be compared to Sacramento.Rob Dawghttps://www.blogger.com/profile/10042154106850545479noreply@blogger.comtag:blogger.com,1999:blog-7514357.post-1157044597604967752006-08-31T10:16:00.000-07:002006-08-31T10:16:00.000-07:00BlueEyesAustin said...If you think that a market t...<I>BlueEyesAustin said...If you think that a market that was flat for five years is going to correct at the same level as a market that grew at a bubble rate for those same five years than your analytical framework is fatally flawed.</I><BR/><BR/>You're assuming that a previously flat market was therefore unaffected by the bubble. Consider whether or not prices would have already declined if not for a strong economy, fueled in part by the bubble. What appears to be flat may still be a rise from what would have otherwise occurred.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-7514357.post-1156991714162979702006-08-30T19:35:00.000-07:002006-08-30T19:35:00.000-07:00I agree Buffalo is a dirty trick, and it should on...I agree Buffalo is a dirty trick, and it should only be reserved for places like the SF Bay Area and San Diego, which are currently experiencing job loss/talent flight due to their uneconomic conditions for business. <BR/><BR/>On the other hand, Fort McMurray is just as much of a red herring. Ever been to Viginia City, NV? Read about what happens to boom towns in the middle of nowhere. The stock exchange in Virginia City had greater "worth" than the NYSE. There are lots of examples, easy to find: Aurora, CA... I mean NV, is a fun one. How is Midland, TX doing these days? Heck, some speculators are thinking about Grand Junction, CO as a Uranium mining play in this energy burp.incessant_dinhttps://www.blogger.com/profile/16112787494988405076noreply@blogger.comtag:blogger.com,1999:blog-7514357.post-1156990009161040762006-08-30T19:06:00.000-07:002006-08-30T19:06:00.000-07:00I think Austin truly is a nice city. It has lots ...I think Austin truly is a nice city. It has lots going for it. It's a capital city (along with 50 others), it has a major university (like some 60 other cities/neighborhoods), and it has a lot of high tech (like about a dozen other metropolitan areas). I agree with Robert on the "it's different" red flag going up. <BR/><BR/>I have a fairly mobile skill set, and I am actively researching other parts of the country as candidate work/live possibilities. One thing I do know is that there are <I>a lot</I> of nice places inside our national borders. I prefer them to the rest of the world. Austin is on my watch list now (along with 9 others), thanks to the sincere recommendations from the Austinites.incessant_dinhttps://www.blogger.com/profile/16112787494988405076noreply@blogger.comtag:blogger.com,1999:blog-7514357.post-1156989357665159372006-08-30T18:55:00.000-07:002006-08-30T18:55:00.000-07:00Within the SFR/Duplex/4plex I don't care much. I ...Within the SFR/Duplex/4plex I don't care much. I don't like to stand out such as a 4plex in a bunch of SFRs or vice versa. Also in keeping with my other guides a lot of 4 plexes gets too urban for my tastes. <BR/><BR/>For SFRs; low crime, low taxes, low key. Easy to rent, 3br/1.5ba+. I'm not real concerned about schools beyond what you'll find if the place is safe anyway. Apliances are the cheapest things to provide and widen the customer base and also keep theem longer. If moving involves buying a W/D Refrig/Oven you hesitate. For the same reason utils are not included. Makes the rent look cheaper and makes it easier to keep rents low.Rob Dawghttps://www.blogger.com/profile/10042154106850545479noreply@blogger.comtag:blogger.com,1999:blog-7514357.post-1156984670108974012006-08-30T17:37:00.000-07:002006-08-30T17:37:00.000-07:00Could you please rank & describe your preferences ...Could you please rank & describe your preferences on types of residences (SFR/TH/4P/etc.)?TJandTheBearhttps://www.blogger.com/profile/10735388072841457108noreply@blogger.comtag:blogger.com,1999:blog-7514357.post-1156967607823876852006-08-30T12:53:00.000-07:002006-08-30T12:53:00.000-07:00Places I wish would open up; Coastal California, C...Places I wish would open up; Coastal California, Cape Cod, low density Gulf Florida pennisula, the next Sedona.<BR/><BR/>Those places have been ruined by a combination of greed, neglect, "progress," and mostly their own success. <BR/><BR/>By "open up" I'm hoping for a combination of rational pricing and renewed community commitment to restoring those aspects that made them desireable. Cape Cod is overpriced and congested. Gulf Florida is overpopulated. Don't even get me started on the failings of Central Coast California.Rob Dawghttps://www.blogger.com/profile/10042154106850545479noreply@blogger.comtag:blogger.com,1999:blog-7514357.post-1156966050717131222006-08-30T12:27:00.000-07:002006-08-30T12:27:00.000-07:00Curious as to what you mean by the term "open up" ...Curious as to what you mean by the term "open up" & why Cape Cod. I know the area well & I just don't see investment potential.Bobhttps://www.blogger.com/profile/11106164237354370049noreply@blogger.comtag:blogger.com,1999:blog-7514357.post-1156960423718188032006-08-30T10:53:00.000-07:002006-08-30T10:53:00.000-07:00BlueEyesAustin said...Whatever.No, around here we ...<I>BlueEyesAustin said...<BR/>Whatever.</I><BR/><BR/>No, around here we either care or keep quiet. You wanna "whatever" there's a lot of other excellent blogs. <BR/><BR/><I>If you think that a market that was flat for five years is going to correct at the same level as a market that grew at a bubble rate for those same five years than your analytical framework is fatally flawed.</I><BR/><BR/>Severely flawed at leeast. The Austin market hasn't beeen "flat" for five years just rising slowly. See:<BR/><BR/>http://recenter.tamu.edu/data/hs/hs140b.htm<BR/><BR/><I>If you think I am being a RE cheerleader, you are mistaken</I><BR/><BR/>I only observed that you were repeating#3 on the cheer list. <BR/><BR/><I>I think we will see flat-to-modest declines in the RE market in Austin and in many other areas that were only mildly infected by the coastal RE bubble. </I><BR/><BR/>THAT makes you a cheerleader. This is almost exactly what David Lireah said 2 days ago. <BR/><BR/><I>I've provided data (e.g., median income to median house price ratios) that support this position by showing the RE market here is not divergent from historical norms.</I><BR/><BR/>Yes, you've provided supporting info. That's why your comments are recieving respectful attention. Prices appear to be only moderately diverging from past norms but this in an environment of historically extremely low interest rates. <BR/><BR/><I>In an earlier post you stated regarding the TX RE market: "I'm trying real hard to get smarter fast."</I><BR/><BR/>Indeed, and you've helped. I didn't realize the extent of the cultural differences twixt Austin and San Antonio for one and the extremely unusual 2002-2003 house price trend. Tech bubble fallout? <BR/><BR/><I>So, I and Austinite try to provide you with some data and insights. Your response, however, indicates that you would prefer to simply apply your CA insights. That's not the same as saying "it's special here." It saying that a sensitive analysis takes into account the facts of a particular case.</I><BR/><BR/>How did I "know" there was a strong WaMu and BoA prescence if my model is so very flawed? I'm not applying the same analysis as Ido California. I'm comparing and contrasting to tease out thee truth. Looking at the 2001 data your local exposure to the tech bubble was obvious. Early 90s SoCal was equally vunerable to an aerospace downturn. Austin would have said the strong tech sector was a good thing. SoCal would have said the same about aerospace. Now we have a situation where SoCal is saying low interest rates and an expectation of safe investment are a justifying our current prices. Austin, do you have low interest rates and an expectation of safe real estate investment?Rob Dawghttps://www.blogger.com/profile/10042154106850545479noreply@blogger.comtag:blogger.com,1999:blog-7514357.post-1156957513109343212006-08-30T10:05:00.000-07:002006-08-30T10:05:00.000-07:00Whatever. If you think that a market that was fla...Whatever. If you think that a market that was flat for five years is going to correct at the same level as a market that grew at a bubble rate for those same five years than your analytical framework is fatally flawed.<BR/><BR/>If you think I am being a RE cheerleader, you are mistaken. I think we will see flat-to-modest declines in the RE market in Austin and in many other areas that were only mildly infected by the coastal RE bubble. I've provided data (e.g., median income to median house price ratios) that support this position by showing the RE market here is not divergent from historical norms.<BR/><BR/>In an earlier post you stated regarding the TX RE market: "I'm trying real hard to get smarter fast."<BR/><BR/>So, I and Austinite try to provide you with some data and insights. Your response, however, indicates that you would prefer to simply apply your CA insights. That's not the same as saying "it's special here." It saying that a sensitive analysis takes into account the facts of a particular case.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-7514357.post-1156953753583451032006-08-30T09:02:00.000-07:002006-08-30T09:02:00.000-07:00Hint:This stopped being a productive dialog when y...Hint:<BR/><BR/>This stopped being a productive dialog when you said: "it's difficult for me to see that we will suffer the massive correction that the coasts are in for." <BR/><BR/>The dialog degraded further when you chose to describe the host as "wedded to a systemic, national analysis of the housing market." <BR/><BR/>Truth is that "it's different here" is the #3 real estate pablum being pushed by RE cheerleaders. Right behind "real estate never goes down" and "this time it's different." Newsflash, it's different every time and every place. Austin has some advantages and some disadvantages. There's just no way to honestly say those advantages will provide protection. And one of those advantages; lower prices doesn't mean asmuch when property taxes are double or triple those of California for instance.Rob Dawghttps://www.blogger.com/profile/10042154106850545479noreply@blogger.comtag:blogger.com,1999:blog-7514357.post-1156950906360083352006-08-30T08:15:00.000-07:002006-08-30T08:15:00.000-07:00Sigh. That's not it and you know it. I suggest, ...Sigh. That's not it and you know it. I suggest, strongly, that you evaluate your underlying assumption that as the California real estate market goes, so goes the nation.<BR/><BR/>This is no longer a productive dialog.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-7514357.post-1156917507537701562006-08-29T22:58:00.000-07:002006-08-29T22:58:00.000-07:00BlueEyesAustin,We all get it now. Austin is speci...BlueEyesAustin,<BR/>We all get it now. Austin is special. Sorry for the confusion.Rob Dawghttps://www.blogger.com/profile/10042154106850545479noreply@blogger.comtag:blogger.com,1999:blog-7514357.post-1156913027840197362006-08-29T21:43:00.000-07:002006-08-29T21:43:00.000-07:00Well, Buffalo and that whole region have a declini...Well, Buffalo and that whole region have a declining population. Austin has had a huge population growth over the last five years (200K additional people in the MSA in five years, a 16 percent increase). In addition, median income in the city has grown nicely. In 2005, the Austin median home was $161,300 and the median income was $67,300. That's a 2.4 ratio compared to the 3.6 national ratio.<BR/><BR/>I mean, I understand you're pretty wedded to a systemic, national analysis of the housing market...but fundamentals make a difference as well. Positing Bufallo as a counterexample just isn't credibleAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-7514357.post-1156892045159295922006-08-29T15:54:00.000-07:002006-08-29T15:54:00.000-07:00BlueEyesAustin said...I don't think we'll see real...BlueEyesAustin said...<BR/><I>I don't think we'll see real estate value growth here...but without the run-up it's difficult for me to see that we will suffer the massive correction...</I><BR/><BR/>What about places like Buffalo? Homes selling (not selling) for $11/sf. Since they fell in the "run up" will they rise in the crash? Okay, what's to say the reasonable rises we've seen in Austin isn't a credit pustule masking a general underlying decline?Rob Dawghttps://www.blogger.com/profile/10042154106850545479noreply@blogger.comtag:blogger.com,1999:blog-7514357.post-1156889227240539822006-08-29T15:07:00.000-07:002006-08-29T15:07:00.000-07:00WaMu and BofA have a big presence here. Regionals...WaMu and BofA have a big presence here. Regionals like Frost are important players as well.<BR/><BR/>I don't think we'll see real estate value growth here...but without the run-up it's difficult for me to see that we will suffer the massive correction that the coasts are in for. To the extent those declines are important I think it will have much more to do with the recession they are likely to trigger rather than a direct decline in non-coast reali estate.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-7514357.post-1156870985729608852006-08-29T10:03:00.000-07:002006-08-29T10:03:00.000-07:00Sorry, maybe I copied the wrong comment you made. ...Sorry, maybe I copied the wrong comment you made. How about this one:<BR/><BR/>"I think the market is mostly moving on fundamentals, as ordinary people are not used to the idea of getting rich off their primary residence in TX." <BR/><BR/>Apply my previous comment to this statement of yours.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-7514357.post-1156870761114846402006-08-29T09:59:00.000-07:002006-08-29T09:59:00.000-07:00Austinite,What are the names of the banks in your ...Austinite,<BR/>What are the names of the banks in your area? Any WaMUs or BofAs? When you check mortgage rates do you prohibit the inclusion of Countrywide or Option One? <BR/><BR/>The Housing Pustule is the -result- of an excess of credit puss. Just because Austin does exhibit the ssymptoms doesn't mean it won't follow the greater trends. If this were isolated like SoCal early 90s Austin would be fine. This ain't like 1990.Rob Dawghttps://www.blogger.com/profile/10042154106850545479noreply@blogger.comtag:blogger.com,1999:blog-7514357.post-1156867310527797652006-08-29T09:01:00.000-07:002006-08-29T09:01:00.000-07:00Sure, if we make blanket statements we can say wha...Sure, if we make blanket statements we can say whatever and it will mean...whatever.<BR/>My point is there are still regional markets. There will be places that buck the trend. Just look at Fort McMurray. (That's in Canada, so you'll know where to Google.)Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-7514357.post-1156866347036943192006-08-29T08:45:00.000-07:002006-08-29T08:45:00.000-07:00A few blanket statements.Everyplace is different. ...A few blanket statements.<BR/><BR/>Everyplace is different. You can plop down bindfolded any one of my frequent readers in any major city in the US and have thee city called correctly before the blindfold comes off. You can just tell Worcester from Springfield or Oxnard from Ventura or Tuscon from Phoenix. The good ones can tell you in what part of town they've been dumped. <BR/><BR/>Yeah Austin [insert town name here] has unique advantages. It is urbane [insert attractive characteristic here] and both govt and education [insert strong job(s) segment here] provide for a stable economy. <BR/><BR/>Get it? Everyplace is special. That doesn't mean theey are going to escape an economic event of worldwide scope.Rob Dawghttps://www.blogger.com/profile/10042154106850545479noreply@blogger.comtag:blogger.com,1999:blog-7514357.post-1156865786367990062006-08-29T08:36:00.000-07:002006-08-29T08:36:00.000-07:00All of them cashed out big $$$ and bought $600K+ h...<I>All of them cashed out big $$$ and bought $600K+ homes.</I><BR/><BR/>$600K home is not a rental home in Austin--it is a low-end luxury home. Those are not 1031 buyers, those are primary residence buyers.<BR/><BR/>600K home will run you $12-15,000/yr in property tax.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-7514357.post-1156865208747503372006-08-29T08:26:00.000-07:002006-08-29T08:26:00.000-07:00"It is an oversimplification and inaccurate to say..."It is an oversimplification and inaccurate to say that Austin market is driven by 1031 clowns from CA."<BR/><BR/>I personally know a handful of 'clowns from CA' who moved to Austin in the last 12-18 months. All of them cashed out big $$$ and bought $600K+ homes.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-7514357.post-1156863514008513202006-08-29T07:58:00.000-07:002006-08-29T07:58:00.000-07:00ocrenter, I enjoy your blog immensely, but I don't...ocrenter, <BR/><BR/>I enjoy your blog immensely, but I don't think you know the Austin market.<BR/>It is an oversimplification and inaccurate to say that Austin market is driven by 1031 clowns from CA. Not that there aren't any of those idiots here, but they hardly define the market. It is much broader than that. Speculators are cyclical and are now on a severe down cycle, so that their overall effect on markets will be negative. That is no different in Austin than elsewhere.<BR/><BR/>But there are also secular changes underway providing support to the Austin market, and I think that support is likely to continue for some time.<BR/><BR/>A very important characteristic of the TX markets in general, compared to CA, is high property taxes. Because property taxes are so high here, it is very difficult from a c/f perspective for anybody to run rental properties with leverage. Because of this, there are fewer HIGHLY leveraged speculators than one finds in other markets. The high taxes also keep a lid on primary residence properties. People don't like the taxes, but I think they are good because of their negative pressure on house prices.Anonymousnoreply@blogger.com