21Apr
There seems to be quite a bit movement in raw, but platted, residential properties. Recently,161 lots sold in Burleson, and 96 sold in South Fort Worth. Prices are discounted currently, but I am surprised investors still see this as a viable vehicle.
With 90,000 vacant lots on the market, investors know that they may require several years to see a demand increase. There certainly is a reality locally that subdivisions have gone up incredibly quickly. The market is overbuilt, and foreclosures are providing a glut of vacant structures. Thinking about all those poorly built subdivisions on the periphery of the city calls into question the necessity for further subdivisions. Compound that with incredible growth in the condo/urban market around Fort Worth, and it may only add more time justifying vacant lot investments.
I can’t help but wonder if the Trinity River Vision project will further slow a rebound in subdivided land. Many of these investors are paying a premium for the “paper”; or platting and permits that may already be in place. This isn’t to mention existing infrastructure. Seems to me that the last thing Ft. Worth needs is more poorly built subdivisions in Mansfield. Of course, at the end of the day there will always be a value in land.
17Apr
The collapse of General Growth Properties Inc. won’t be as widely known as Bear or Lehman, but it certainly is a large event. Perhaps the flagship of pending commercial foreclosures. In Fact, their demise effects us locally in Fort Worth as the company owns and operates Hulen Mall.
I had always been under the assumption that Hulen Mall was operated by Simon Properties, apparently that is not the case but I would certainly keep an eye on this firm in the near future. GGP lists assets closing in on $30 billion, with debts around $27 billion. The logical question is whether their asset valuation is based on mark-to-market accounting. If that is the case, then almost certainly their assets are overvalued.
We should expect more of this, and brace for serious commercial defaults. The Fed is taking an interesting approach this time around though. They are acting a bit preemptively by offer investors longer term notes on their commercial vehicles.
16Apr
If you are serious about watching the pulse of the local market, I would suggest attending the upcoming Real Estate Forum. One of the speakers will be Texas A&M Real Estate Center’s Chief Economist, Dr. Mark Dotzour. A&M tends to publish the most in depth analysis of our market, so I tend to listen to what they have to say. Dotzour says he is not looking for a near term rebound on the hard hit areas, but he said he is “kind of hoping the government bailout works”.
I think we are all kind of hoping that it works. In fact, it better work, or we will surely be facing extreme inflation. Agents from the 80’s can tell you that high interest rates are no good for business. The plus side for property owners would be that your debt load in real dollar terms would actually shrink. When any Chief Economist says he is “kind of hoping” a bailout works it just doesn’t look good.
Still the forum will have several other speakers including one from the FW Association of REALTORS, to talk about legislation. John Duca from the Fed in Dallas should have some interesting view points on the economy.
The Forum is tomorrow, April 17th, at the Fort Worth Convention Center in rooms 201A and B. Show gets started at 7 a.m. and will end at 10:30 a.m.
16Apr
The local market is moving residential properties at a fairly decent rate. The slower months have passed us by, and we should begin to see a fairly steep uptick in sales volumes. Refinancing is also setting record volumes, there simply hasn’t been a better time to finance a home in 40 years.
Before I start to sound like a goofy you tube realtor, let me get to my point. There are jobs surrounding these functions. Think for instance about all of the appraisals and inspections that surround sales and refinancing. Surely these people can hardly keep up with their work loads right now.
Inspection and appraisal is not necessarily something I am overly familiar with, but I know an opportunity when I see one. If I was out of a job right, I may be looking down these paths. You don’t have to be the person going out in the field either, banks have in-house real estate appraisers which review the reports coming in for new loans.
I am sure I am leaving out 15 other jobs that probably rocking right now.
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