Texas Real Estate Market Gets a Kick of the Spurs
The rise in Texas home sales comes for the first time since the expiration of the home buyer tax credit. Three cheers, that's not the only good news: looking at January numbers, Texas home inventory is down, says the Federal Reserve. Back in December, it would have taken eight months to sell off all the inventory in the state. In January, that time frame fell to 7.7 percent. Experts say 6 months is a normal market and it looks like Texas real estate is inching closer and closer to normal.
As for foreclosures, it almost seems like they've taken a vacation in some Texas markets. Foreclosure filings in Dallas/Fort Worth were down 16 percent for April -- foreclosure filings have to be posted a month ahead, so April's numbers are now out. For the first few months of 2011, Dallas foreclosure filings are 4 percent lower than this time, last year. And that is significant because last year we were still euphoric on the first time home buyer's credit.
The vacation fizzles in mid-Texas: Austin foreclosure filings were up 3 percent over the past year.
George Roddy, CEO of Foreclosure Listing Service, a company that publishes foreclosure data in North Texas and Austin, says this was the lowest percentage gain in Austin's foreclosure cycle since 2008.
Considering the surges of past years -- a whopping 49 percent from 2008 to 2009, 32 percent from 2009 to 2010, 3 percent is a drop in the bucket.
"The 3 percent gain over the past year," says Roddy, "does not seem bad at all."
Foreclosure filings were also down 20 percent in Collin County, north of Dallas in what is considered the "telecommunications corridor", and an area hit hard by foreclosures.
But Roddy says don't break out the champagne just yet: There are still a high number of troubled loans across the state, and fallout from the foreclosure crisis is going to take a log time to wade through.
"Until a significant number of workers are absorbed back into the workforce," says Roddy, " we won't see foreclosure postings decline."
Despite that North Texas foreclosure posting decline, 2011 saw a sharp increase in the percentage of residential postings in an upside-down position. In fact, the percentage of foreclosure postings on upside-down homes jumped 29 percent. That's not good because a year ago April, only 21 percent of Dallas area home were upside down.
You know what that means: The original mortgage amount exceeds the current value of the property. So the homeowner can not sell the home for what is owed on the mortgage and often, neither can the bank left toting the note.
Over the last year, as residential posting levels eased somewhat, both the volume and percentage of homes posted in an upside-down situation got worse. CoreLogic recently estimated that 12 percent of Dallas homeowners owe more than their mortgages are worth. That is about half the nationwide rates of negative equity, and can be attributed to Texas law which limits how much a homeowner can borrow against their home on HELOCS: home equity lines of credit.
So maybe what happens in Texas stays in Texas.
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