Real estate and other stuff

I got up last week and saw a beautiful colored light coming through the shutters in my home office. I ventured out back onto the deck in my bathrobe and fluffy slippers to quickly take a few photos. Naturally, the flash came on at first (hey, I'd just gotten up and hadn't had my coffee yet). But after adjusting manually, I got two shots that I really liked out of half a dozen before the light changed.

Trouble is, I can't decide which one I like better. I cropped the first one to frame it better, but that's all.

What do you think? Which one is better? And why?

I came across this photo on the BBC news website this morning. I thought it perfectly expressed my feelings of hope for the new administration's goals and policies.

President Obama has already hit the ground running, according to the BBC. He's moving a lot faster today than I am after celebrating last night!

I've been showing some lender-owned properties lately. Texas weather is notoriously fickle, and it has been cold lately, at least in the morning. I hate walking into a house and having my buyers say, "Wow, it's freezing in here!"

Or they can't see the garage or the size of the walk-in closets and pantry without a flashlight. My bad. I have an arsenal of flashlights in my glove compartment, but the batteries all died in the summer--from the heat!

It's hard to sell a house, even if it's bargain-priced, if the buyers aren't at least comfortable looking at it. So even though I don't have to contend with snow in San Antonio, I thought Heather's post was quite timely!

I had an e-mail this morning from someone wanting me to sign up for a short-sale course for Realtors. In order to convince me, for some reason, she included the following scary article, attributed to the Wall Street Journal and Bloomberg News. The bolding for emphasis is mine.

------------- ... Investors are swooping in and buying and accounting for most of the rise in sales.

"While the purchases are trimming the inventory of unsold properties, most of those bought by speculators will likely return to the market when prices rise again, hampering any recovery", said Nobel laureate economist Joseph Stiglitz and Yale University Professor Robert Shiller in interviews.

"We're creating a shadow inventory of homes that will be right back on the market as soon as the economy and the housing market begin to improve," said Stiglitz, a Columbia University professor of economics. "We could see a double-dip in the housing recession if that happens."

... The repossessed properties offer opportunities for investors, who typically buy homes at auction and rent them out until prices increase and they can sell.

"These speculators are preventing the market from crashing now, and when they get out it could fall again." said Shiller, who helped create the S&P/Case Shiller real estate price indexes

Dario Moscoso of San Diego bought a three-bedroom foreclosed house in San Diego three weeks ago for $490,000, half of what it would have fetched a year ago. He's renting it for $2,500 a month and plans to sell when prices rebound. "We hope to put it back on the market in about a year," Moscoso, 52, said in an interview. "We'll gauge the market and see how it goes."

The "speculative fervor" is returning in the market in part because investors have the edge in buying foreclosures, said Dean Baker, co-director of the Center for Economic and Policy Research. Baker said he considered buying a Washington home at a foreclosure auction last year until he learned the terms of the sale. Winning bidders had to complete the deal within 30 days, half the time of a standard home purchase, or lose their deposits. It was a risk he didn't want to take.

"Regular homebuyers are excluded from the foreclosure market because the rules favor professional investors and that lack of competition is driving down prices," Baker said.

"In past housing recessions, we didn't see as many mortgages under water, so it didn't matter if the focus was on speed and not on maximizing value," Stiglitz said. "Now, the same banks that created the problems by mismanaging their risk are mismanaging the disposal of their assets."

"If you're a first-time buyer with a young family, do you really want to buy a home sight unseen and risk losing your down payment?" Stewart said, minutes before starting a foreclosure auction in Boston. "Investors know how to close a deal quickly and they don't care what it looks like -- they're either going to rent it or flip it." ------------

So lenders and investors are conspiring to ice home buyers out of the market and slow down the housing market recovery?

This seems strange to me, since I work with so many residential investors. They're having trouble getting mortgage programs at a decent interest rate and have to put down at least 20%. There's no FHA or VA program for investors except on VA repos. Last fall, I had one investor--active-duty military--meet all the qualifications for a VA vendee loan, but Ocwen still required 20% down instead of the low down payment advertised. He forfeited his application fee.

I suppose investors could find cash or hard money to buy properties at auction vs. trying to get a mortgage. But how does rehabbing and/or renting a house--improving a neighborhood and offering a home to someone who can't afford to buy--contribute to the downfall of our society? If prices rise again, they would have to rise quite a bit to cover the acquisition and rehab costs. And if the investor has good tenants in the property, why would they want to sell anyway?

Should lenders sell their properties only to home buyers? Should investors be charged a premium for buying residential real estate? And is it true that investors don't even want to look at the properties they bid on?

What do you think?

(This terrific photo of an investor inspecting a Texas house up for auction is by DanielJames.)

San Antonio's housing market should get better in 2009. This prediction is based on reports made at the annual San Antonio Board of Realtors' Housing Forecast on January 6. However, the median home price in San Antonio and Bexar County is expected to stay pretty much the same.

Chief Economist Mark Dotzour of the Texas A&M Real Estate Research Center noted, "In 2008, San Antonio had job growth, cheap mortgages and positive price appreciation but declining volumes. It tells me local economics are not the issue. It's a lack of confidence in our government. And when that is repaired, buyers will start buying again."

For the whole city, the appreciation was 1% and the median sales price was $150,400 for 2008. Plus, home sales declined 18 percent. However,, some neighborhoods actually saw appreciation of 5% during 2008, including:

- Colonies North, a mid-century suburb near the city's Medical Center ripe for updating, as was the one in the photo

- Rogers Ranch, just north of Loop 1604, with both custom and high-end tract homes, some still under construction

- Cordillera Ranch, a horse-friendly neighborhood with 5-acre-and-up homesites, situated between Boerne and Canyon Lake

- Terrell Hills, near Fort Sam Houston and downtown, undergoing remodeling and teardowns to rebuild

More good news is that foreclosures were at 0.6% statewide. Nationally, 1.1% of homes on the market in the third quarter of 2008 were foreclosures.

The San Antonio market, although still a buyer's market, has come closer to balance as new-home inventory has decreased. The strong economy of San Antonio and Texas in-migration has helped, too.

I had to go check on a rental property before the tenants moved in, and afterwards my husband and I headed downtown to see what was open for lunch. My favorite place, the Liberty Bar, was closed. The Pig Stand was open, but since we were already fairly close, we went to see if El Mirador was open. It wasn't.

But I knew that Mi Tierra would be open, since's it open every day. I've been going there since I was a kid--it's a San Antonio institution across from the Mexican Market. We parked in a lot down the street and headed to Produce Row through the back of their sister restaurant, La Margarita.

When we finally got to Mi Tierra, it was the most crowded I'd ever seen it. There were people standing in line to register at the front desk. So rather than go back to the Pig Stand, we went to La Margarita. We had to stand in a slightly shorter line there, but there seemed to be tables available.

Fittingly, La Margarita offers several flavors of margarita. We went to the bar and ordered a couple of mango margaritas, which turned out to be quite strong. As we were waiting outside for our table, and getting in some good people watching time, the sun came out.

When we finally got a table, it was about 75 degrees and we were glad to sit outside in the shade of an umbrella. My husband ordered chile relleno, and I had chalupas compuestas, both of which dishes were delicious. The tostadas and salsa, spicier than most other Mexican restaurants serve, were good, too. The servings were generous, and since by then it was almost 3:00, I probably ate more than I should have!

Feliz Año Nuevo a todos mis amigos en ActiveRain!