- Land Sales Slipped 44% in The Woodlands and Bridgeland Year-Over-Year in 2015, Reports Howard Hughes Corp. [Realty News Report]
- Houston Baptist University Announces Tenants for $3.9M Retail Development The Pillars at HBU [HBJ; previously on Swamplot]
- River Oaks District Opening First of 8 New Restaurants on March 15, Starting with Toulouse Cafe and Bar [Houston Chronicle]
- Cabo San Lucas Apartments Near Hobby Airport Offering Tenants Free Health Screenings Amid Oil Bust [Houston Chronicle]
- TxDOT Wants To Know How You Would Fix the US 59-610 Loop Interchange [Houston Public Media]
- ‘Art Blocks’ Temporary Installations Counter ‘Cold Business-like Space’ in Main Street Square Downtown [Houstonia; previously on Swamplot]
- Evelyn’s Park Conservancy Holding Contest To Name Restaurant in the Bellaire Park [Culturemap]
Photo of McKee Street Bridge: Russell Hancock via Swamplot Flickr Pool
Headlines
Double decker the 59/610 Interchange. !!
Interesting numbers from Hughes Corp, but not surprising. The real estate industry’s continued story of “low inventory” is a pile of scat. Builders know the market is weak, so they will curtail construction activity by choice to maintain margins. Many are already in debt up to their eyeballs, so piling up spec inventory would be a recipe for disaster.
It is rather surprising (or should I say alarming) that mortgage companies are opening up the old back of tricks again to sustain a real estate market functioning on the fringes. If you thought this time was different, be advised…It’s not.
Ladies and gentlemen may I present the latest iteration of the interest-only mortgage. You know, because nothing says clueless and irresponsible like taking on a large pile of debt for a house you can’t afford.
http://aaronlayman.com/2016/03/grand-delusion-returns-to-the-housing-market-with-sofis-interest-only-mortgage/
#59-610Exchange
Commuter rail from Sugarland to Downtown
I’m not sure what you mean by the “low inventory” comment. Builders saw the weakening of the market and backed off as quick as possible. This kept the inventory from flying through the ceiling. We are still seeing inventory climb at a concerning rate, but since inventory was so incredibly low to begin with we’re still ok. For now. If you’re saying that what’s happening in the Woodlands and Bridgeland should be taken to be representative of the entire market I have to cry foul. Ccertain sectors of the Houston housing market are going to share a very unequal part of the burden from the energy crunch, that should be patently obvious. Houston’s a big town, you don’t just get to cherry pick a few data points and extrapolate. That’s no more honest than saying that the increase in sales for homes valued between 150-250 represents a strengthening housing market in Houston.
I might be in the minority here but I just don’t think the traffic at 610/59 is that bad. Of course it’s heavy at rush hour and peak times but overall I think there are better areas where TXDOT can spend money. Mainly commuter heavy rail from the suburbs and alternative transportation options. The only think I’d change is when traveling on 59S and trying to go to 610 there are two lanes that go south and one lane going north….either add a north lane or change one of the south lanes to north.
@MrEction:
No, I am certainly not suggesting that the drop in land sales is reflective of every Houston submarket. What I’m saying is that the real estate industry continues to use the excuse of low inventory for stagnant sales when they have actually helped to depress inventory. It’s a counterfactual argument that is misleading to consumers. Industry pundits are suggesting that poor weather, labor shortages and the like are causes for the low inventory, but that is total rubbish. If low inventory is really a problem, every builder should put up a dozen spec homes and test all of that “pent-up demand”.
I was talking to a builder sales rep about some new spec inventory yesterday, and it was obvious that this particular builder was still trying to push prices that are about 10 percent too high. For someone from out of state or from a different country, the prices might look reasonable. For those who have followed this latest cycle of asset reflation, it is pure comedy. It’s like NAR’s affordability index which somehow almost always finds homes to be affordable. Take a look at this graph and try not to laugh…
https://research.stlouisfed.org/fred2/series/COMPHAI
So, is the HBU a tax free entity, a “Hey we are a tax free entity dedicated to providing a Christian education to students while owning commercial property that we lease out for a profit?” kinda place?
Aaron: Your “easy money mortgage” comments make me chuckle. I’ve owned my home for 12 years. I owe about 1/2 what it’s worth. My original mortgage was 5.875% 30 year. I can’t refinance. Why? Because I don’t qualify for a ‘new’ loan. Yup. A loan on a house I already own, have a loan on, make payments on (100% on time), and would end up paying less for.
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Reason being is our federal government overloads, trying to “protect” borrowers, made it illegal for lenders to use any income verification OTHER than tax returns. So for many self employed, who have legit deductions or can record large losses over time, or take income via draws or refinancing, their returns won’t paint a picture of what they really make (which is why are tax system is so flawed. Even a flat tax won’t fix it since it’s still a flat tax on ‘income’, which for many is hard to define. A consumption tax would be easier. But whatever).
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I know why the govt did this. And the bank confirmed it. “Just use less write offs for a few years to boost your income, then we can do the loan”. I say “But doing that will cause me to be worse off financially. How would that make it better for you to do the loan?”. As if taking less write offs than I’m able to, to “boost” my reported income, actually means I make more money? Actually I’d end up with less after tax. I mean, does this guy really work at a bank?
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It’s obvious to me that the government made this change to help force people to report income that they otherwise would not legally need to report — by telling lenders “You’re not ALLOWED to lend to them otherwise”. And since these lenders are not even lenders anymore — they’re just loan originators — they have to do loans based on what the market will buy. And that’s vanilla conforming loans that can be sliced and diced.
How to fix 610-59 exchange:
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First, I assume they mean the one on the southwest side.
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The obvious solution is a giant roundabout. When I say giant, I mean so big they will have to bulldoze the new Chronicle building and Best Buy. The center would be occupied by a fountain fashioned out of the relocated Astrodome.
Ah ok. Yeah if people are actually arguing that recent decreases in sales numbers are caused by low inventory that’s clearly false since inventory levels have been climbing as sales decrease. As for the affordability index I’m not sure how that’s defined, so it’s hard to judge. Looking at the shifts from 2010 to today look somewhat reasonable but I can’t interpret it at a longer scale.
@Cody,
You make an interesting point. It is a shame that you can’t refinance. The sad truth is that the war on cash is only accelerating, and the government’s official position is that only borrowers can commit mortgage fraud. That is a patent absurdity. Professor William K. Black has shown quite clearly that the folks running America’s largest banks put the “liar” in liar’s loans. Of course now that the banks have been bailed out and made whole, they are being selective about originating new business when it suits their interests.
I would also remind readers that the Fed is slated to pay out more than $11 billion in free money to member banks this year for sitting on all those excess reserves created by the Federal Reserve. (i.e doing nothing)
You can’t refinance your mortgage, but America’s banks continue to get a free handout courtesy of U.S. taxpayers. Isn’t capitalism grand!
http://www.nakedcapitalism.com/2016/03/hoisted-from-comments-banks-supporting-war-on-cash.html
@MrEction
I can explain that affordability index on a longer scale…It’s WORTHLESS!
Just consider the fact that homes were still deemed “affordable” leading right into the last housing collapse, even during the summer of 2006. Houses were somehow still “affordable” when we were in the throws of some of the worst mortgage fraud the world has ever seen. Utterly comical.
https://research.stlouisfed.org/fred2/series/COMPHAI
The article says that The Woodlands dropped by 58% and Bridgelands dropped by 18%. I could easily grok the Bridgelands performance as being a proxy for both an erosion of demand on the part of consumers and of builder confidence; but the case with The Woodlands is so obviously different because it is mostly built-out and the inventory that remains is skewed toward very expensive lots that are sold to the general public and custom-builders one-at-time or in very small increments. With or without a local recession, The Woodlands was going to slow down very quickly.
@ Cody: If I had been able to get a ‘new’ mortgage some years back then I’d probably still live in the United States. Like yourself, I’d had a history of small business ownership, and even though my business was sold, the debts were paid in full, and I could come up with a 50% downpayment, I got a similar speech from the mortgage broker…and she suggested that I ought to sign up for more credit cards, then go and buy some consumer electronics and go on vacation. I did so grudgingly and never came back. It wasn’t just a rejection of serfdom, there were other reasons; but if I had had a mortgage payment on what was a really good buy then I’d have stayed on the manor estate.
@ Aaron Layman: I think that you’re confusing corporatism for capitalism.
That ridiculous reverse curve where the 69NB-to-610NB ramp separates from the 69NB-to-610SB ramp is… ridiculous. Usually I’d expect something like that to get fixed in PS&E, but the trend lately seems to be that deficiencies in the preliminary design get carried all the way through to construction. Something for the boy racers to look forward to I suppose.