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Housing bust coming.

28,647 Views | 147 Replies | Last: 3 yr ago by NWE
agneck
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When oil gets cheap in Texas you have people lose their jobs and lose their houses. Lenders will repossess then after a while they'll sell them cheap. Sometimes auctions have occurred. Save your money it's coming. They'll be lots of commercial properties get repoed too. Way over lended on that. N
PlanoAg98
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AG
Good. I'm tired of my home/land value constantly being increased by the county. I don't plan on moving until I retire (~ 20 years) so keep those taxes low for a while.
aggie appraiser
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I wouldn't be surprised if it happens before the oil bust with the way the government is handling this virus situation.

hopeandrealchange
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PlanoAg98 said:

Good. I'm tired of my home/land value constantly being increased by the county. I don't plan on moving until I retire (~ 20 years) so keep those taxes low for a while.


It is not a tax problem. It is a spending problem. Our local leaders are going to continue to spend like drunken sailors. When your valuation goes down your tax rate will go up.
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TxAG#2011
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Austin/DFW aren't reliant on oil at all
HoustonAg2014
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AG
agneck said:

When oil gets cheap in Texas you have people lose their jobs and lose their houses. Lenders will repossess then after a while they'll sell them cheap. Sometimes auctions have occurred. Save your money it's coming. They'll be lots of commercial properties get repoed too. Way over lended on that. N
I 1000% agree. In Houston, we are about to have a once in a lifetime event where morgage rates are low and housing prices are low as people get laid off (which is terrible to think about).

It's coming and people are about to be able to get their forever home on the cheap here in the next year...
SteveBott
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AG
If they have a job
aggiepaintrain
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AG
Aggiesincebirth said:

agneck said:

When oil gets cheap in Texas you have people lose their jobs and lose their houses. Lenders will repossess then after a while they'll sell them cheap. Sometimes auctions have occurred. Save your money it's coming. They'll be lots of commercial properties get repoed too. Way over lended on that. N
I 1000% agree. In Houston, we are about to have a once in a lifetime event where morgage rates are low and housing prices are low as people get laid off (which is terrible to think about).

It's coming and people are about to be able to get their forever home on the cheap here in the next year...


Might want to check mortgage rates again
FJB
jja79
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AG
Rates aren't that low.
PlanoAg98
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AG
Regardless, I think this epidemic will put a lot more houses on the market resulting in a lot less new build. Thus everyone in the new home construction industry will see a dip in their job market.
jlAG97
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Can't buy forever homes if you won't be able to get out of your current one without absorbing huge losses
HoustonAg2014
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AG
SteveBott said:

If they have a job


Very true. I have a job where I am not worried about being laid off and I am currently renting.

Also didn't realize rates had gone back up. Thanks for sharing to whoever mentioned that. I am sure they will go back down. From what I understand a lot of mortgage companies are overwhelmed and raised rates to slow volume but I am still learning a lot about this kind of stuff.
jja79
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AG
You might save enough on the forever home to make the discount on the current home palatable.

I have a client who was to have closed on an $800K purchase last Monday. They panicked and backed out. Our loan documents and money were at the title company. The seller of that home was downsizing and obviously didn't close on his purchase. Today he called me and applied for a loan with us to purchase his buyer's house. He realized he really didn't want to put an $800K house back on the market in Cypress with oil at this level. People are doing things differently in response to all this.
SteveBott
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AG
JJ touches on a very good point. It does not matter if we are a low or a high. The equation still applies. You make a surplus on one side of the transaction and pay the market back on the other. Hard to double dip in residential.
Ragoo
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AG
Houston isn't as much of an O&G town as many seem to think.
SteveBott
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Oil is About 11% of the economy in Houston but not sure if that is just paychecks or includes ancillary jobs. Down from 23% in 1985. Still significant especially the west side
CaptnCarl
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Where do you get the 11% number?

Oil is a huge revenue generator for all of Texas, so the ripple affect will touch all areas including insurance, real estate, retail, hospitality and restaurants, entertainment, non profit donations, etc.

Energy is the driving economy in Texas, so you're naive to say ___ city wont be affected by an oil downturn. Yes, many businesses aren't in O&G, but their customers are.
SteveBott
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First of all I never said oil is not an important factor. Second I pointed out that I don't know if 11% was direct paycheck or or included ancillary jobs. I got the info off wiki
CaptnCarl
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Thanks Steve. I wasn't directly my post solely at you, rather some of the posters above that have the sentiment of _____ City in Texas aren't reliant on oil at all.

I think the GDP of Texas would reflect that the Texas economy is heavily dependent on oil, but I don't have those figures. I'm open to having my mind changed!
Ragoo
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CaptnCarl said:

Where do you get the 11% number?

Oil is a huge revenue generator for all of Texas, so the ripple affect will touch all areas including insurance, real estate, retail, hospitality and restaurants, entertainment, non profit donations, etc.

Energy is the driving economy in Texas, so you're naive to say ___ city wont be affected by an oil downturn. Yes, many businesses aren't in O&G, but their customers are.
you must not have been around in '14. Oil busted and the economy kept humming.
CaptnCarl
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I was actually living in Houston. I would not compare the downturn in '14 to the one we are facing today.
SteveBott
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AG
I lived through 13 a barrel in 83-85. See through skyscrapers.
Ragoo
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SteveBott said:

Oil is About 11% of the economy in Houston but not sure if that is just paychecks or includes ancillary jobs. Down from 23% in 1985. Still significant especially the west side
if oil see a reduction in 30%. 30% of 11% is not very much, big picture.
Ragoo
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AG
CaptnCarl said:

I was actually living in Houston. I would not compare the downturn in '14 to the one we are facing today.
id call '14 worse. All of south Texas went from boom to ghost town over night.
SteveBott
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AG
Good friend and client in the oil patch said 38 a barrel was the bottom before producing shuts down. We are at 22 as of Friday
Ragoo
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AG
SteveBott said:

Good friend and client in the oil patch said 38 a barrel was the bottom before producing shuts down. We are at 22 as of Friday
production won't stop. Production is revenue. Drilling might slow or stop because that is capital investment.
HoustonAg2014
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The ones saying oil isn't still a huge part of the Houston economy are dead wrong. A LOT of commercial real estate development problems have been postponed or halted completely the Monday after oil took a nose dive.

The ones mentioning insurance, real estate, ect all taking a hit from Houston's real estate downturn are spot on. Houston's oil market will impact everything from the oil majors all the way to the dry cleaning services. Make no mistake, the longer we stay down here the worse it gets. Also this is wayyyyy worse than 2014. On an inflation basis, this is the lowest we have ever seen oil and the goal this time is to crush the US oil market. Trump and our people will have to work some magic to try to turn this around somehow.
Diggity
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AG
Some folks have their head in the sand
Agnzona
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I was in Texas Real Estate in the mid 80s..it was brutal.
BQ05
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AG
I'm hard on a house with two weeks left to close. It's a significant purchase and our "forever home". My current house is set to close the week after and they buyers for now are all in.....lm locked in at 3.5 and as of last week I thought this is great.... now having some serious second thoughts..... I will be out earnest money, place to live etc. if I walk.

Not sure what to do.
Diggity
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Where?
BQ05
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AG
Sienna
BQ05
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Also.... I ordered my appraisal on the purchase home week before last and it has not been done..... I asked my realtor why and he said "appraisers are being weird" right now.

Called my lender yesterday to ask him and no response.

Not sure what to make of that.
Diggity
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AG
Hard to say a ton without knowing the details but if this is really going to be your home for the next 7+ years, I would say go for it. You locked in at a great rate and prices may drop a bit, but if that's the place you want to be, make the move.
 
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