- Business uncertainties from Washington policies
- The great credit contraction
- Budget cuts for states, cities and school districts.
One of the things that I came away with is that as a state Texas is weathering fairly good. A few years ago I would have told you that we had not been hit as we really did not have a bubble to burst. That is not the case any longer. He explained it about the best that I have heard. Here in Texas we did not experience a home price bubble we experienced a home sales bubble. The majority of our problems stem from the loans that were given since 2003. He explained that prior to that we had 17 homes sold per 1000 houses. During the no income/no assets loans that increased to 30 home sales per 1000 households. As he explained that was unsustainable and it is what we are dealing with now.
He was honest in that it took us sometime to get in this mess and it will take some time to get out of it. He said in all truthfulness this has been going on for a long time going clear back to LBJ’s administration. We have been living beyond our means for a long time. We will have some pain as we reel in from the excesses.
Future home sales are going to be dependent on job growth, mortgage rates/credit terms and home price affordability. Up to this point the American way has been to buy high and hope for higher. That said he said that NOW is probably the opportunity of a lifetime to a buy a house. Who would have thought we would see interest rates of 4.5% or less. He talked about the interest rates of the 1970’s when 12% was considered a good rate.
In the excerpt below he talks about the characteristics of a recession. The graph that shows the difference in unemployment between those who have a college degree and those who do not is an eye opener. As he said if there was ever an advertisement to get a degree this is it. If you have a son or daughter who is deciding whether they want to go to college this is a clip you might want to show them.
In his closing thoughts he said we will get through this. The other thing we have going here in Texas is a huge influx of people moving to our state. There are many places in our state where the market has stayed relatively flat and in my mind with this economy; flat is good.
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If you are buying or relocating to Spring Texas or Tomball TXand need help from a professional REALTOR®, Marchel can be reached at Marchel@AgentwithResults.com or by phone at 832-721-8332.
If you would like information about Spring-Tomball TX please visit my websites at www.AgentwithResults.com and at www.ResultsRealtytx.com.
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Copyright © 2010 Marchel Peterson, All Rights Reserved. *Characteristics of a Recession - Texas specific!!*
I bought my first house in 1972 and interest rates were sooo high it was scary. Interest rates below 5% still amaze me.
Marchel- Excellent information. I thank God every day to live & work in Texas. We are truly blessed. Re blogging now.
Marchel, loved being able to hear Gary Maler first-hand after reading your blog. Thanks for posting this informative piece.
Howdy and evening to you Marchel
Marchel, you sure this here sure is one mighty fine blog post you have wrote! And sure is mighty refreshing to read and know there are folks saying how thing really are going. The local NHRA puts in the paper that all is roses in Real Estate. The suggest button had been click for the AR staff to Feature your fine blog post.
Have a good one
Dale in New Hampshire
Marchel
Indeed these are tough times we live in and real estate agents are working harder than ever
Marchel,
I got my masters on Business Administration in 2000 on Texas A & M international University at Laredo, TX, great informative blog !, take care
NORMA, We bought a house in 1972 also and I remember getting 12% and that was considered a REALLY good rate as that was bond money. I thought about including that in my post but decided not to give away my age LOL.
MELISSA, I love living in TEXAS! We are blessed!!
MARY KAY, This is the second time I have heard Gary Maler and I love his calling it what it is. This was not a touchy feely speech but he did tell it like it is.
DALE, Thank you and thank you for suggesting my post.
TOM, We as real estate agents are working harder than ever. I also think those in the mortgage industry are working harder than ever!!
RAY, Our son just got accepted to Texas A&M's Ocean engineering program. He is an Iraqi Vet and so excited about being accepted to the program. He has went the last year to our local community college. He is going to be commuting from here but we have found him a room so he will stay there through the week and then back here to his girlfriend over the weekend.
Marcel, Great informative post and applicable far outside of Texas boundaries. The story sound familiar!
Marchel - The contraction of credit is the most amazing - businesses are failing because of this and people are losing jobs, yet Obama says nothing - does nothing but attack big business
Marchel,
Some of your post sounds so familiar because it's a lot like the conversation around here. We did not have a bubble so it didn't "pop". That doesn't take away from the fact that we sure are dealing with the economic situation here now though.
Home sales have SLOOOOWED down. We keep dealing with credit approval situations and more foreclosures are looming..
It will take a while, I'm sure. it's not a quick fix and the more that this administration tried to quick fix it, the more it adds to the problem...
Congratulations this post is now featured in the Silent Majority Group of Active Rain.
Gary Maler came and spoke to our Board this year too. Said about the same things and recently we have been given good news about Texas. Things are going to continue to grow here with the influx of people from other states and businesses moving here and bringing in more jobs. I saw where SYSCO is bringing in 600 jobs to Schertz just north of San Antonio it was announced last week and there are others too.
It all comes down to jobs. If folks don't have a job they don't spend, they don't buy and cost the state money in many ways. It trickles down. Everything and everybody is staying put with a wait and see attitude. Companies are doing the same.
Government needs to get spending under control.
Like you said, it is all about jobs...and I don't mean Steve.
Follow the job market and you will see stablilty in the housing market. Texas is growing, so is TN, but not Michigan. We were the first one in when Ford began restructing in 2001. Looking back as hard as it was they saw the right thing to do and didn't require a Government bail out.
Gordon here for Cherise... Just read an article where Washington is considering how to give the qualified homeowners whose mortgages are higher than the value of their home. They might consider a flat 4% interest rate to absorb the primary mortgage and the HeLOC or second mortgage. This would help pick up the pace out of the cul-de-sac of this turn down. g
Very interesting. Thanks for that regional specific info. Although we didn't have a bubble burst here in Houston, we surely have seen prices drop and drop in the past 9 months or so. It seems to be because of the credit crunch. They have jobs. They have a chunk to put down. They just can't qualify for a loan just yet.
It is interesting to read all the reports coming out from our AR members in various states. Overall, I think there are a lot of similarities. I think almost everyone agrees this will be a slow recovery... and jobs are a key part of this.
Hi Marchel, I would have to say I agree that your last statement " Flat is Good". And hopefully this spin down in unemployment and the contraction of financing will not take us to a double dip recession ( or worse). If the congress changes enough faces, it could hold us for only a while. Something has to happen if things are to improve. No one has a clue on how to fix all this beyond all the spending that has already created so much debt. If anything, I expect that business will be looked at to try and grow us out of the quagmire. And there is no certainly that even that can work. I would also have to agree that an education is a better defense against losing employment. A very good post Marchel!
I remember when my s-i-l in TX had a 16% loan! Yikes! I also remember that we left TX thinking the economy was bad, until we got elsewhere...and realized no matter how bad we THOUGHT it was, TX was faring better. We left again, only to return once more. The last time we left it was because we had increased our value to companies in Colorado by getting more education and experience so we were better able to weather the storms. TX has continued to have a better economy through all of these past 20 years, but we have weathered Colorado's economy for the sake of the mtns.
Marchel - When I read through that blog, I almost think it could be specific to most any state in the union. So much of what goes on in our states is affected by the policies and maneuvers of Washington. Great piece!
Marchel
Sadly it is somewaht worse in San Diego, at least in some micro-markets. Distressed sales are keeping prices pretty flat. Inventory is moving, but it will be a while. Great time to buy, but so many are cash poor right now.