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• List Price:  72%
• Location:  69%
• Neighborhood:  55%
• Floor Plan:  37%
• Square Footage:  28%
• Schools:  22%

"Recent Study Shows Home Buyers Important Factors" was brought to you by the outstanding agents at Register Real Estate Advisors.

"Spring, Texas Housing Market Update" was brought to you by the outstanding agents at Register Real Estate Advisors.

According to the Austin American-Statesman, state budget writers had expected property values to drop 1 percent last year.

Property values affect how much funding schools receive, and although Joe Wisnoski of Moak Casey & Associates, a school financing consulting firm, said the increase will likely make “very, very little difference in the bottom line of school districts,” others say it could still be a positive sign for Texas.

“We’re certainly above the trend line across the board, but it’s still early,” said Dale Craymer, president of the business-backed Texas Taxpayers and Research Association. “If current trends hold, we will be in relatively good shape.”

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Area homebuilders started 18,417 new homes in 2011, a 2 percent decline from the 2010 total. But the 4,387 homes started in fourth quarter 2011 represent a 24 percent increase over last year’s tax credit-depressed quarterly starts count. Just over 4,890 new homes were closed last quarter, 388 more than the year before.

At the end of 2011, the city’s new home market had an inventory of fewer than 10,000 homes, a first since 1997. A 10 percent decline in new home closings in 2011 caused new home inventory to rise from 5.9 last year to 6.4 months.

But the city’s job growth should mean more work for builders this year.

“Based on the job growth of the last 12 months, the tight housing supply and the building confidence of the Houston market should lead to an increase in new home starts through the end of 2012,” said David Jarvis, director of Metrostudy’s Houston division.

Metrostudy said the city’s unemployment rate dropped to 7.6 percent in fourth quarter 2011, a full percentage point less than the previous quarter’s reading. Employment also grew by 3.3 percent annually.

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The state created 15.4 percent of total jobs created in the United States
from October 2010 to October 2011.

Texas gained 232,500 nonfarm jobs during the period, an annual growth rate
of 2.2 percent compared with 1.2 percent for the United States. The state’s
private sector added 287,900 jobs, an annual growth rate of 3.4 percent
compared with 1.7 percent for the nation’s private sector.

The state’s seasonally adjusted unemployment rate increased to 8.4 percent
in October 2011 from 8.2 percent a year earlier. The nation’s rate
decreased from 9.7 to 9.0 percent.

All Texas industries except the information industry and the state’s
government sector had more jobs in October 2011 than in October 2010. The
state’s mining and logging industry ranked first in job creation, followed by
the professional and business services industry, and the leisure and
hospitality industry.

All Texas metro areas except Abilene, Wichita Falls, Texarkana and College
Station-Bryan had more jobs in October 2011 than in October 2010. Victoria
ranked first in job creation followed by Laredo, Corpus Christi, Odessa and
Lubbock.

The state’s actual unemployment rate in October 2011 was 8 percent. Midland
had the lowest unemployment rate followed by Amarillo, Odessa, Lubbock and
College Station-Bryan.

"Private Sector Job Growth Offsets Government Losses" was brought to you by the outstanding agents at Register Real Estate Advisors.

If you’d like to help with relief efforts, but you don’t know where to start, State Comptroller Susan Combs recommends beginning with the
following organizations:

• American Red Cross of Central Texas.
• The Texas Forest Service, which has established an emergency assistance
  fund to help overextended volunteer fire departments. According to
  the agency, Texas has more than 60,000 active firefighters, and more than
  half of them are volunteers.
• The Texas Wildfire Relief Fund,
  which supplies Texas firefighters with equipment, water, food and
  fuel.

Combs also suggests checking with your local media outlets, religious organizations, and city and county officials to find out how you can help in
your area.

"Texas Wildfire Relief: How You Can Help" was brought to you by the outstanding agents at Register Real Estate Advisors.

COLLEGE STATION, Tex. (Real Estate Center) — When it comes to responsibility for warning guests about dangerous indigenous animals and insects, Texas statutory law generally protects landowners from claims resulting from injuries received from naturally occurring hazards.

“Appellate decisions focus on a term called ferae naturae or ‘free in nature,’” says attorney Judon Fambrough with the Real Estate Center at Texas A&M University. “Basically, if the critter is free in nature and in its natural habitat, there is no duty to warn of its presence.”

The precedent was set in a 1963 case involving a minor who fell from a billboard when stung by wasps. The parents sued the company responsible for maintaining the billboard for failing to warn people or make the area safe. The court ruled the ferae naturae doctrine barred the plaintiff’s negligence claim.

In general, said the court, the law does not require an owner or possessor of land to anticipate the presence of or guard invitees against the harm from wild animals. That does not apply if the owner or possessor has reduced the wild animals to possession, harbors them or has introduced non-indigenous wild animals onto the premises.

The court went further by ruling on issues of interest to most Texas landowners.

“Artificial conditions, such as farm ponds, frequently become the abode of poisonous snakes, and stinging insects are common in hunting lodges and summer homes, but no cases have been found where a duty of ordinary care (negligence) has been imposed on the owner or possessor of such premises,” the ruling stated.

A 1973 federal district court ruling also supported the landowner. An independent logging contractor sued a paper company for failing to warn him of the presence of Lyme disease on the property where he worked. The logger contracted the disease after being bitten by ticks on the defendant’s land.

The federal court ruled that although the defendant owed the plaintiff the duty to warn of hidden dangers or defects, the duty did not include a warning of the presence of indigenous wild animals, such as ticks.

As a Texas Supreme Court judge put it, “The owner may assume that the recreational user needs no warning to appreciate the dangers of natural conditions, such as a sheer cliff, a rushing river or even a concealed rattlesnake.”

Taking note that 97 percent of Texas is privately owned, the Texas legislature sought to encourage landowners to open their gates to the public. The so-called Recreational Guest Statute was the result.

The law greatly diminishes landowners’ liability when their property is used for recreational purposes and shields them when guests are injured by the landowner’s “ordinary negligence.”

Ordinary negligence is defined as failure to act as a reasonable person would have acted in the same or similar circumstances, said Fambrough. As a general rule, landowners avoid ordinary negligence by warning or making the premises safe from all dangerous conditions they are aware of or that a reasonable inspection would reveal.

For more on Texas landowner liability, see Fambrough’s article, “Welcome (But Watch Out)” in the July issue of Tierra Grande magazine published by the Center, the nation’s largest publicly funded real estate research entity.

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“The recovery is happening,” said Rosen. “It just isn’t as strong as we’d like and housing is the weak link.”

The gross domestic product is likely to grow a subpar 2.4% this year compared to 4.0% “if housing were running on all four cylinders,” he said, and growth is likely to hit 3.0% for 2012, still below the 4% to 5% range that is typical for the early stages of an upturn.

A source of nagging concern for consumers, the job market has a long way to go, he said, with only about 2 million private-sector jobs gained following a loss of 8.8 million during the recession.

Job creation, which slowed down this spring, should be back on track in the fall, he said, and monthly gains this year should average between 175,000 and 200,000, roughly twice the pace of 2010. That would move the unemployment rate down to 8.9% by the end of this year and 8.1% at the close of 2012.

Unfortunately, the construction industry, which accounted for one-fourth of the nation’s job losses in a recession that was three times worse than any that preceded it, won’t be staging a comeback this year, he predicted.

If the economy bounces back in this year’s third and fourth quarters, as he expects, Rosen said that 10-year Treasuries should start moving back toward 4%, from about 3% currently, and subsequently rise into the 4%-5% range and higher.

The Federal Reserve should now be pushing its federal funds interest rate up to 2.5%, from close to zero, he said, noting that the central bank’s current stance is “not helping investors and savers,” who are receiving next to no interest, and is underestimating inflation.

Tight Mortgage Lending Standards

At this stage, Rosen said, single-family housing is struggling to recover because of overly tight credit conditions, and housing ought to be leading the economy forward. But “that’s not happening, as if no one in Washington cares anymore.”

(In a July 7 Washington Post news story on a town hall meeting via Twitter the previous day, President Obama was quoted as saying, “The continuing decline in the housing market is something that hasn’t bottomed out as quickly as we expected,” later adding that his Administration’s efforts to help struggling home owners were “not enough.”)

“There is a very big anti-homeownership bias coming out of Washington and we are going to have to fight for everything we have,” Rosen said.

Tight credit standards are housing’s biggest problem today. As the result of tight mortgage requirements, 30% to 40% of people who want to buy a home can’t, he said.

At the peak of the housing boom, when excessively easy credit prevailed and “anybody who could fog a mirror could get 100% financing” is the time when the banks should have been tightening. Now, at the bottom of the market, is when conditions should be loosened.

“It makes no sense whatsoever,” he said. In Washington, banking regulators “are not doing the right thing.”

He cited Lew Ranieri, the “godfather” of mortgage finance, and others who believe mortgage lending has become overly restrictive and who are “trying to get the ear of somebody, but there’s nobody to listen.”

Ordinarily, first-timers would be accounting for 50% of home sales, but “that’s down now because it’s harder to qualify,” Rosen said.

“The low-end consumer is not feeling very good,” he said, but there is “some light at the high-end of the housing market.”

In California — where San Francisco and the Silicon Valley are very strong, San Diego is slowly getting better, Orange County is suddenly somewhat better, Los Angeles is lagging and the Inland Empire and Sacramento are the weakest performers — homes are at their most affordable level in 20 years, he said.

“If you have 20% down and a high FICO score, now is the time to lock in financing, the cost of which will be going up over the next two years,” he said, raising the concern that mortgage rates could be ascending just as the housing recovery is shifting into high gear.

In the meantime, builders should be building 1.1 million single-family homes a year (compared to a yearly pace of 419,000 starts in May) and demographics ought to be supporting rising levels of demand, with 45 million echo boomers waiting in the wings to enter the job and housing markets over the next decade and 20% of the population nearing retirement.

New Policies Needed

Immigration is also an important part of the housing demand equation, and it could be buttressed by “stapling a green card to every foreign graduate” of a U.S. university. “We are giving up 1% of GDP a year because we are making it so hard for people [immigrants] to get here,” he said.

Attention also needs to be given to selling off the 1.6-million unit overhang of houses. “We need to clean them up and get rid of them, and get this done. But government doesn’t know how to do it,” Rosen said.

“I don’t see a big upturn until we get policy changes in Washington, maybe in 2013. In the meantime, they’re going to scapegoat the industry.”

Among the things that need to be done to put housing back on its feet, Rosen said that credit standards should be eased at Fannie Mae, Freddie Mac and the Federal Housing Administration.

Housing also needs to raise its profile. “If we solve the housing problem, we will really help the economy and job creation,” he said.

To solve the foreclosure “hangover,” Washington needs to pursue “a forceful foreclosure abatement policy working with the top 20 banks,” and that effort should be overseen by a “buck stops here” housing czar who can get the job done.

Arizona Coming Back Slowly

In addition to offering some encouraging news about improving economic conditions on the West Coast, Rosen observed that there are states beginning to do well — such as Texas, Alaska and North Dakota — and even areas whose economies have sunk to the bottom of the heap as the result of badly overheated housing markets during the boom are showing signs of progress.

From beleaguered Arizona, Elliott Pollack, CEO of Elliott D. Pollack & Company, said that that state’s recovery got underway at the start of this year, far behind the U.S. overall, and still has some serious mending to do to recapture lost population and jobs, “so it won’t be until 2013, ’14 or ’15 before things get good again.”

Foreclosures in the state are beginning to recede, he said, but remain very high and half of the home mortgages in Arizona are underwater. For the time being, “there are too many vacant homes and not enough household formations,” Pollack said.

The average price of a new Arizona home is far above the price of re-sales, which are dominated by foreclosures and short sales. Newly constructed homes are 170% more expensive, compared to 130% during normal times.

However, by 2015, re-sale home prices will be 50% higher than today, he predicted. “When the market clears, you’re going to start making money.”

“When the balloon re-inflates, this will all be a bad memory,” Pollack said, with Phoenix going from 6,000 new housing units a year back to 30,000 to 40,000. The boom “is out there somewhere,” he said.

John Silva, managing director and chief economist for Wells Fargo Securities, said that due diligence is in order because the fundamentals that drive the economy are changing. Manufacturers who have strong growth abroad have been grabbing hold of global economic growth to achieve solid profits, but small businesses are still languishing.

In the housing market, which “has been building bigger and bigger homes for smaller and smaller families,” demand is now veering in new directions, to smaller homes closer to the city.

“Commercial real estate is coming back in many areas,” he added.

Silva questioned the absence of a strong dollar policy in the U.S. “The dollar has been going downhill for seven or eight years,” he complained, generating stronger exports but also raising prices for U.S. consumers.

“We import more than we export in the U.S.,” he said, “so we are paying more for a weaker dollar.”

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