Roger Martin and Life in the Loop

 

Aug. 31, 2010

Hurricanes - the Effect on Houston's Housing Market

Hurricanes and the Effect on the Houston EconomyWe Houstonians will always be proud of our response following the twin disasters of Hurricanes Katrina and Rita. We rose to the challenge as a caring community and not as the impersonal mega-metropolis that our size might indicate.

Houston’s housing market easily absorbed the 240,000 people who were displaced by the storms.  An intriguing article on Forbes.com attributes out ability to house theses evacuees to our lack of zoning.

Marc Scribner said, “Thanks to the city’s liberal land-use policies, Houston enjoys lower real estate prices, increased availability of affordable housing, lower population concentration and more opportunities for entrepreneurs.  If not for these conditions, displaced Gulf Coast residents would have faced even tougher–and likely more deadly–challenges following the disaster.

“Zoning laws had put up artificial roadblocks to the construction of affordable rental units during the preceding decades in communities along the Gulf Coast.  This made homelessness even worse for low- to moderate-income residents after Katrina and Rita made landfall.

“In Louisiana and Mississippi, emergency temporary housing was zoned out of many of the worst-hit areas…”

He concludes, “A laissez-fair attitude toward land use is justified not only economically, but on humanitarian grounds as well.”

To read the full article, click here.

This is an interesting notion…. that Houston's lack of zoning lead to plenty of affordable housing choices, giving Houston the ability to house people displaced by the recent hurricanes.  And that influx of residents, in turn, gave Houston's housing market a boost.

Way to go Houston!

Roger Martin

Aug. 1, 2010

First Time Home Buyer Credit - Effect on Houston's Housing Market

First Time Home Buyer Credit
First Time Home Buyer Credit

 

The federal First Time Home Buyer credit program has just expired.  We real estate professionals saw an increase in sales from this program.  But was the effect of this program temporary or long-term?

A report from the Federal Reserve Bank of Dallas discusses the effects of the First Time Home Buyer credit program on Houston's housing market...

August 2010

"... Both new- and existing-home sales in Houston took a predictable dive with the expiration of the first-time-homebuyers’ tax credit.  The incentive pulled the usual strong summer sales figures forward into the spring, and its expiration left year-over-year sales of new homes down 35 percent in July and existing home sales down 25 percent. Builders anticipated the sales decline, leaving permitting of single-family homes quite weak and closely controlling inventories of spec homes..."

So in effect, the First Time Home Buyer credit program "borrowed" sales from future months.  These closings were accelerated to meet the program's deadline.  But the feeding frenzy dropped off when the program expired.  Was there a long-term effect on Houston's housing market?  I am doubtful.  When looking for long-range effects on the Houston housing market, I place more importance on the fundamental health of the Houston economy.  Houston's abiltiy to create jobs will have a larger and more lasting effect on our housing market than any temporary buyers assistance program.

Roger Martin

 

June 25, 2010

New Rec Center Pool for City of West University Place

State-of-the-art lap pool in West UniversityThe City of West University Place has just re-opened its two newest sports facilities – and boy, are they terrific!

This photo shows the new Recreaction Center pool.  The Rec Center, as it is known locally, is located at 4210 Bellaire Blvd.  The City purchased this property form the Southwest Family YMCA, which had occupied the site from 1947 to 2001.  Following renovations, the building and pool were re-opened by the City in 2004.  Unfortunately, damage from Hurricane Ike made the building unsafe, and the City was forced to tear it down.  That's the bad news.  The good news is that a municipal bond election in 2007 funded the redevelopment and expansion of the current Rec Center, which just opened in 2010.

The addition of a second neighborhood pool means that play-swimmers now concentrate at Colonial Park Pool.  The Rec Center's eight-lane, twenty-five-yard pool is reserved for adult lap swimmers, classes, and swim teams.  It is heated and covered year-round.  Large garage-like doors enclose the pool, and the doors are opened whenever the weather permits.  A glassed-in observation room allows visitors to watch the classes and swim meets.

Membership information and class schedules can be found on the City’s website at www.westu.org.  Or just call the Rec Center at 713-662-7420.

Roger Martin

June 25, 2010

West University’s New Colonial Park Concession Stand

Concession Stand at Colonial Park, West University PlaceIn 2010, the City of West University Place completed major renovations to two of its sports facilities.  This photo shows the newly-built concession stand at Colonial Park Pool (4130 Byron St.)

The concession stand at Colonial Park is run by the Edloe Street Café and Deli, which has long been a favorite “watering hole” in downtown West U.  Now, the most popular and kid-friendly menu items are available poolside as well.

Burgers, sandwiches, hot dogs and tacos are all on the menu, but what makes this concession stand unique is the delicious salads.  I especially recommend the Berry Salad, a light combination of greens, blue cheese, spiced pecans, pulled chicken and fresh strawberries, topped by a balsamic vinegar dressing.

And no trip to Colonial Park Pool is complete without a Cherry Icee!

Roger Martin

June 25, 2010

West University Place - New Colonial Park Pool

Colonial Park Pool has been re-designed for water-playOur local kids are all raving about the new neighborhood pool complex for West University Place.  Colonial Park Pool, located at 4130 Byron, has been newly-renovated in 2010 as a water-play feature!

When this was the only pool in West University Place all the lap swimmers, swim teams, swim classes, and free-swimmers were forced to compete for space in this one facility.  Not so any more!  The lap swimmers have all moved over to the new West University Place Recreaction Center at 4120 Bellaire Blvd.  This pool has been re-designed as our own enormous waterpark.

The pool is divided into several different areas, each with a different purpose.  A sun-bathing area with in-water lounge chairs separates the shallow end from the deeper water areas.  The shallow end includes a large climbing structure with several small slides and a bunch of water cannons.

Of course one of the deep-end activity areas is your classic diving board.  But in addition to the diving board, there is also a water slide and a climbing wall (shown above).  Another pool is dedicated especially to water sports (water polo or volley ball or basket ball or what have you).  The balls are supplied by the City.  There is also a lily-pad “bridge”.

The much-beloved shady and grassy areas have been preserved for picnicking, including the enormous deck under the live oaks.  Colonial Park also features a giant playground, a pavilion, and two lighted tennis courts.

And the concession stand – well, that’s another great story!

For pool hours and fees, visit the City of West University Place website at www.westu.org.  I can't think of a better way to beat the heat!

Roger Martin

June 18, 2010

Houston - Best Cities for Young Professionals

Houston named best city for young professionalsHouston has just been named one of America's best cities for young professionals, according to Forbes.com....

June 17, 2010

University valedictorians, overachievers and would-be entrepreneurs across the country graduated this month into a bleak economic landscape.  Faced with 9.5% national unemployment, even the most ambitious young people are thinking carefully about how to find their best shot at success.

Our advice? Consider moving to Houston, Texas, Washington, D.C., or Minneapolis, Minn. These three cities to Forbes' fourth-annual list of best cities for young professionals--places where ambitious college grads can get a strong start on a high-powered career."

Francesca Levy, www.Forbes.com

Yes, Houston is a job-creating engine, and it just keeps on.  To read the full article, click here.

May 29, 2010

Houston - a Model 21st Century City

Houston - a model 21st century cityAccording to Forbes.com, Houston is a model 21st century city...

June 7, 2010

Innovation, job growth and immigration put Houston ahead of New York and Boston

Do cities have a future? Pessimists point to industrial-era holdovers like Detroit and Cleveland. Urban boosters point to dense, expensive cities like New York, Boston and San Francisco. Yet if you want to see successful 21st-century urbanism, hop on down to Houston and Texas, the Lone Star State.

You won't be alone: Last year Houston added 141,000 residents, more than any region in the U.S. save the city's similarly sprawling rival, Dallas-Fort Worth. Over the past decade Houston's population has grown by 24%--five times the rate of San Francisco, Boston and New York. In that time it has attracted 244,000 new residents from other parts of the U.S. while older cities experienced high rates of out-migration. It is even catching up on foreign immigration, enjoying a rate comparable with New York's and roughly 50% higher than that of Boston or Chicago.

So what does Houston have that these other cities lack? Opportunity. Between 2000 and 2009 Houston's employment grew by 260,000. Greater New York City--with nearly three times the population of Houston--has added only 96,000 jobs. The Chicago area has lost 258,000 jobs. San Francisco 217,000, Los Angeles 168,000 and Boston 100,004.

Politicians in big cities talk about jobs, but by keeping taxes fees and regulatory barriers high they discourage the creation of jobs, at least in the private sector. A business in San Francisco or Los Angeles never knows what bizarre new cost will be imposed by city hall. In New York or Boston you can thrive as a nonprofit executive, high-end consultant or financier, but if you are the owner of a business that wants to grow you're out of luck.

Houston, however, has kept the cost of goverment low while investing in ports, airports, roads, transit and schools. A person or business moving there gets an immediate raise through lower taxes and cheaper real estate. Houston just works better at nurturing jobs.

It's not just smug coastal places getting smoked by Texas. Since the collapse of the housing bubble Houston has outperformed Sunbelt counterparts like Phoenix, Las Vegas and Los Angeles. A big factor has been that manufacturing, professional services, international trade and technology industries have been the primary drivers of the city's economic growth--rather than construction and speculation. Ironically, this has increased home values. Since 2007 prices of homes in Houston have ticked slightly higher, while those in Las Vegas, Phoenix, Los Angeles and the Bay Area each are down by more than 35%.

Some traditional urbanists will concede these facts but then try to shift the focus to 'qualitative' factors: the best-educated residents, the highest salaries, the most expensive real estate. Although it also attracts a large number of low-skill migrants, Houston has considerably expanded its white-collar workforce. According to the Praxis Strtegy Group, Houston's ranks of college-educated residents grew 13% between 2005 and 2008. That's about on par with 'creative class' capital Portland, Oregon and well more than twice the rate for New Your, San Francisco or Los Angeles.

But Houston's biggest advantage cannot be reduced to numbers. Ultimately it is ambition, not style, that sets Houston apart. Texas urbanites are busy constructing new subrban town centers, reviving inner-city neighborhoods and expanding museums, recreational areas and other amenities. In contrast with recession-battered places like Phoenix, Houston remains remarkably open to migrants from the rest of America and abroad.

Houston, perhaps more than any city in the advanced industrial world, epitomizes the Rene Descartes idea-applied to the 17th-century entrepreneurial hotbed of Amsterdam--of a great city offering 'an inventory of the possible' to longtime residents and newcomes alike. This, more than anything, promises to give Houstonities the future.

Joel Kotkin, Forbes.com

May 27, 2010

Code Red – Protection for West University Place

Code Red is a valuable free service, protecting West University Residents

I have spoken before about the wonderful Code Red service that the City of West University Place offers free to all its residents.  Basically, this service is an electronic emergency warning system.  The advantage is that each household gets to choose what notification option is best for that family – with modern-day technology options including home phones, cell phones and email accounts.

The Code Red system worked beautifully during the last hurricane, when the city manager delivered regular progress updates on the disaster cleanup.

Today, we saw another use of the Code Red warning system.  A driver fled on foot after a routine traffic stop by the West U Police.  His passenger, who remained with the vehicle, was arrested on a federal weapons trafficking warrant.  West U Police activated the Code Red warning system, describing the fugitive and asking residents to stay indoors.  An alert resident recognized the fugitive’s description and called the police, who arrested the man on a warrant from Louisiana.

To subscribe to this very valuable safety service, to www.westu.org, and click on the Code Red button as shown above.

And while we're at it, this would be a good time for me to brag about the response rates of our great West U Police Department!

Roger Martin

May 26, 2010

Houston Economy - Good News and Bad News

Dr. Barton Smith discussed the good news and bad news for the Houston economy.For many years, I have been a fan of the foremost expert on the Houston economy, Dr. Barton Smith from the Institute for Region Forecasting of the University of Houston (www.uh.edu/irf).  This week, I was privileged to get a sneak preview of his upcoming symposium.

As the old joke goes, there is some good news and some bad news.  Here are my notes from the lecture….

  • Good News – A recovery is definitely underway!
  • Good News – Of the two big bullets which flattened the rest of the country, the Houston economy was hit by one (the stock market collapse) and mostly missed the other (the housing crunch).
  • Good News – National housing prices have dropped back to affordable rates (see the chart above).
  • Good News – The Houston economy did not suffer from the over-inflated home values of the rest of the country; hence, our housing correction has been shorter and less difficult.
  • Good News – House prices in Houston are essentially flat to a year ago.  As far as I'm concerned, stable is good!
  • Good News – Houston’s recover was predicted to lag behind the rest of the country.  Instead, we are recovering right along with them.
  • Good News – Houston housing starts have dropped to 60% their 2006-07, thereby helping to reduce excess inventory and stabilize prices.  The housing industry’s response was much faster this time than during the housing crunch of the 80’s.
  • Good News – The conventional wisdom has the US becoming a service economy.  Actually, manufacturing employment is leading the jobs recovery.
  • Good News – The dollar is down, and US export markets abroad are expanding.

For the Bad News....

  • Bad News– The apartment market remains overbuilt.  Katrina survivors soaked up a significant portion of the rental market, but this should have been recognized as a short term event.
  • Bad News– Commercial real estate values have dropped significantly, with negative impact on sales and financing.
  • Bad News – Prime mortgage defaults are climbing and have not yet peaked, unlike subprime mortgage defaults, which have begun to taper off.
  • Bad News – The Federal Reserve still needs to liquidate one trillion dollars of mortgage backed securities, which were purchased to prop up the credit markets during the financial crisis.  How's the market gonna like THAT?
  • Bad News – State and local governments are hurting badly and facing huge budget shortfalls.  A very painful correction is expected at this level.
  • Bad News – Federal government deficits have doubled relative to the past decade, and are predicted to remain at that level through at least 2016.  Deficits at this level may not be sustainable for the national economy.

Dr. Smith concluded by saying that “every recession has a purpose that must be fulfilled before an economic rebound can permanently take hold.”  By this yardstick, the Houston economy - and the national one - still have hard work ahead.

Dr. Smith himself is retiring this year.  I wish him well, but must say that his steady hand and sensible analysis will be sorely missed!

Roger Martin

May 19, 2010

Owner Financing - New Rules for Small Landlords

Owner Financing - New Rules for Small LandlordsThe rules for owner financing have just changed. Mortgage fraud was one of the contributing factors in the recent financial crisis.  In 2008, Congress passed the SAFE Act, hoping to clean up the mortgage mess by requiring lenders to be licensed (like Realtors).  This new law has had unintended consequences for those of us who are small “rent house ranchers”.

It used to be possible to sell a rental unit by owner-financing the property, as long as the owner did no more than five such transactions each year.  The result was often a financial win/win for both buyer and seller.

Unfortunately, this is no longer possible.  According to the new legislation, an unlicensed owner may only self-finance a property

  • if it is his homestead, or
  • if he is selling it to a family member.

For more details, call me (832-483-2636) and I will send you a full copy of the May 2010 article in Texas Realtor magazine.

Roger Martin