Austin homes in negative equity territory
Sunday, August 24, 2008
Here in happy-go-lucky Austin, where music blares from every venue, Tex-Mex and BBQ are served 24/7 and Shiner flows faster than our drought-starved regional waters, things apparently aren't so rosy on the home front.
In today's edition, the New York Times looks at Merced, Calif., the most foreclosure-ridden town in the United States. But what caught my eye, aside from the idiot moves made by lenders, buyers and even municipalities, was the map that detailed other areas where a sizable portion of homes are worth less than what buyers paid.
Right smack dab there in the middle of the Times' map, in the middle of the Lone Star State, was a tinted section that is Central Texas, aka Austin and its environs.
Not that it matters so much to me and the hubby personally right now since we're not one of the negative equity contributors.
For us and the vast majority of owners, a home's value really isn't a factor until you get your annual tax bill or get ready to sell.
We'll get another tax bill (actually two, our county and our school district) in a few months. And we'll grouse over how much it is and how it's being poorly spent. But at least the levies are tax deductible.
And we're not moving any time soon, despite my annoyance at neighbors and their messy, noisy dogs. That's what good fences are for, the construction of which is a home improvement project that could add to your home's basis and reduce any potential capital gains bill when you sell.
True, the percentage of Central Texas homeowners with mortgages greater than their homes' values is relatively small. But it still is disconcerting to see evidence that your locale has way too many folks in over their heads house-wise. That's not good for anybody.
You can read the story about Merced here. Once there you'll find the link to the full negative home equity map.
Well, the map has Austin the the 0-10% category. Can't get much better than that. Many of those same investors that ruined Merced also bought homes in Austin outskirts like Hutto, Manor, Buda, Kyle.
The outskirt newer area of Austin, the starter home neighborhoods are mainly where you'll find people with zero equity. The newer the home and lower the price range, the more likely to have no equity. This was not at all the case in the older established areas of Austin.
Posted by: Steve | Thursday, September 04, 2008 at 07:37 PM
Interesting...I would like to have access to some of the data that goes into that chart. I don't find this news very surprising. Also, the news could get worse of a lot of homeowners. It really seems like home prices, at least in certain price ranges, are due to take a big hit.
I know of several large homes outside 360 or out by Steiner Ranch where the owner has pulled it off the market after it languished for more than 6 months and have rented it out instead. But because the owners have a large balloon note coming due in 18 months in one case, they have their back up against the wall in order to be able to sell it. Also I there seem to be a lot of vacant houses sitting on the market for several months. One would think that eventually those are going to have to come down significantly in price in order to sell.
On the other hand I purchased a house in central Austin that I moved into in March and according to Zillow it's worth $75k more than it was at the time of purchase and about $50k more than Zillow estimated at that time. I'm knocking on wood right now so I don't jink myself.
Posted by: RAM | Monday, August 25, 2008 at 08:57 AM
A lot of these studies only chart major metropolitan areas - thus the parts that are "white" aren't necessarily free and clear; they may just not have been included.
Posted by: M1EK | Monday, August 25, 2008 at 08:25 AM
I saw a similar map a couple of months ago and had a similar reaction. There's a few big foreclosure centers - mainly in California and Florida - and then pockets of negative equity/foreclosure scattered around the USA.
Posted by: Big Winner | Sunday, August 24, 2008 at 02:36 PM