What's up with Texas real estate?

[73ss454]

I just noticed that 7 out of the 10 most undervalued areas are in Texas. I've never been to Texas, maybe REW or others can shed some light why it's so undervalued.

[audreyh1]

Maybe people who live there remember the great real estate crash of the 1980s?

Audrey

[Texas Proud]

You have to go back a couple of decades.. back to the 70s and 80s...

The recession of the late 70s early 80s did not hit Texas as the rest of the country as we were 'big oil".. and finance... but, the savings and loan debacle hit Texas very very hard... RE droped 50% in many locations... some neighborhoods had 70% of their houses repoed...

It has been recovering ever since.. but even without that.. we have sprawl... I live in "Houston"... but in the north outside of the city... my Mom lives in the SW of Houston... and my sister lives in the SE... My mom is 45 miles from me.. my sister is 22 from her... and there are houses all along the way.. it is also CHEAP to build houses with the cheap labor.. so.. there you go..

[Leonidas]

Quote:

Originally Posted by 73ss454 I just noticed that 7 out of the 10 most undervalued areas are in Texas. I've never been to Texas, maybe REW or others can shed some light why it's so undervalued.

Simple answer - there is an abundant supply of land, prices were depressed for years and there is plenty of cheap labor.

The cities are huge – Houston is 600+ square miles and Dallas is about 400 – with equally large SMSAs (approx. 10,000 and 9,000 square miles respectively). But the population density is comparatively light and vast areas of ranch and pastureland surround each city. There’s plenty of room to grow, and both cities/SMSAs have expanded (as have San Antonio, Austin and El Paso).

A contributing factor, as TP and Audrey pointed out, is that Texas RE had the crap kicked out of it in the early 80's when oil became incredibly cheap at about the same time as the savings and loan fiasco blew up and unraveled inflated prices. It has taken a long time to recover from that.

Cheap labor is still readily available thanks to illegal aliens working in the construction industry.

[REWahoo]

What everyone else has already said.

Supply and demand play a big role in the price of everything, including real estate. In my particular area (San Antonio), the economy and therefore the population is booming. But due to the availability of land and the unprecedented growth of new subdivisions, the supply of housing is pretty much keeping pace. For example:

Eight years ago we moved to a low density rural subdivision outside San Antonio. On our drive into "the city", it was 15 miles until we reached the first high density development. Today we reach the first one after traveling six miles, and there are six more between that one and what used to be the closest to us. And that's just what fronts the highway. Behind them are more than a dozen other new developments, including a Dell Webb Geezer Farm (apologies to all my fellow geezers out there). According to the local news, there are more than 15,000 new homes planned for this area over the next eight years.

I'm sure it will come as no surprise that the leisurely drive to the city on a two lane road is becoming a traffic nightmare.

73ss, now you know why real estate is undervalued and why I strongly discourage anyone else from moving here. Have I mentioned the rattlesnakes, scorpions, ...

[jj]

I agree with what everyone else has said.*

In addition, I believe that high property taxes provide a brake to higher prices.* With +/- 3% to pay on top of the mortgage cost that makes property pretty expensive in TX.

[73ss454]

Well thanks guys, I guess I should be glad I'm going to Florida. At least I hope I am.

[REWahoo]

Quote:

Originally Posted by 73ss454 Well thanks guys, I guess I should be glad I'm going to Florida. At least I hope I am.

Since you have family there, I'm betting it will work out great for you.

[Caroline]

These replies kinda make one wonder about the term "undervalued."

I had always thought that the value of anything was what someone else was willing to pay for it at that moment.

But then, financial article writers are much smarter than I am...

[Mr._johngalt]

Quote:

Originally Posted by Caroline * But then, financial article writers are much smarter than I am...

Don't be too sure. I used to think Bob Brinker was a world class
idiot. Then I discovered Suze Orman, and now I have read
some of Dave Ramsey's stuff. I don't think any of these folks
know "jack". I am quite serious about this. Why, there is more good stuff right here than in all of their books/seminars/columns
combined. EOR

JG

[larry]

Quote:

Originally Posted by REWahoo! 73ss, now you know why real estate is undervalued and why I strongly discourage anyone else from moving here. Have I mentioned the rattlesnakes, scorpions, ...

Don't forget those west Texas killer roadrunners. Or even being hunted by wild boar near Imperial, TX!

[Mr._johngalt]

Quote:

Originally Posted by larry Don't forget those west Texas killer roadrunners. * Or even being hunted by wild boar near Imperial, TX!

You forgot fire ants.

JG

[Mwsinron]

I have a cousin who just purchased a 3400 sqft house outside of Alvin Tx. 210k in a developement on a 10sqft lot. Brand spanking new. Taxes will run him over 6000 a year but that is a really cheap price compared to a California house

[REWahoo]

Quote:

Originally Posted by Mwsinron I have a cousin who just purchased a 3400 sqft house outside of Alvin Tx. 210k in a developement on 10sqft lot a. Brand spanking new. Taxes will run him over 6000 a year but that is a really cheap price compared to a California house

Must be a high rise...

[Mr._johngalt]

Quote:

Originally Posted by REWahoo! Must be a high rise...

Cute!

JG