Aaron Layman's Katy Texas Real Estate Forum

A Little Gas Pump Humor

 

  
 
 

John Stewart Discusses Goldman & The Wall Street Money Machine With William Cohan

While Goldman and other Wall Street firms have been made whole for crashing the economy, government regulators are asking these same firms to help them write the rules for fixing the economy.  Gold reached a record high today at $1566.  This week McDonalds hired 62,000 part-time workers after taking over a million applications.  Not to worry, excluding food and energy prices, the FED says inflation is under control.

Here William Cohan, author of "Money & Power: How Goldman Sachs Came to Rule the World", discusses the "lubricant" Wall Street has applied to the American public to keep the casino open.

The Daily Show - Exclusive - William Cohan Extended Interview Pt. 2
Tags: Daily Show Full Episodes,Political Humor & Satire Blog,The Daily Show on Facebook

New Realities for Texas Real Estate Markets

In the latest issue of Tierre Grande, research economist James Gaines offers an informative look at the state of Texas real estate markets.

"Texas has been and will continue to be one of the most housing-affordable states in the country. Housing affordability and new job formation are key to the state’s future growth. One measure of affordability is the ratio of median home price to median household income. As 2009 American Community Survey data reveal, Texas ranks as the sixth most affordable state in the union.

Nationally, slack job growth coupled with tighter mortgage underwriting means overall demand
for homeownership will be constrained while the inventory of properties for sale continues to climb.
Disequilibrium of this type inevitably means prices will fall.

For Texas, the main problem on the demand side will be more restrictive lending requirements as the
state continues to add jobs. Fortunately, the state’s supply of unsold properties is not as high or as widespread as in other states. Some areas may experience price increases as the year progresses."

 

Houston Area Posts Solid Job Growth In March Adding 51,800 Jobs

BLS data show that the Houston-Sugarland-Baytown metro area added 51,800 jobs during the month of March.  That was the second highest gain in total jobs for the top 100 metro areas.  The nonfarm employment increase amounts to a 2.1% year-over-year increase.

Arbitrage Equals Continued Back-Door Bailout Of Failed Banks

In light of yesterday's FED press briefing and today's disappointing numbers on initial unemployment claims, here's a more introspective assessment of what's really happening with U.S. monetary policy.  This is how bankers make money for doing nothing and stick taxpayers with the bill.  Courtesy of Ritholtz...

Consider:

• Q1 2008: JPMorgan Chase had an average of $1.2 billion in outstanding Fed loans with a 2.1% interest rate while it held $2.2 billion in U.S. government securities with an average yield of 4.6%.

• Q4 2008, JPMorgan Chase had an average of $10.1 billion in outstanding Fed loans with a 0.6 % interest rate while it held $10.3 billion in U.S. government securities with an average yield of 1.7%.

• Q1 2009, JPMorgan Chase had an average of $29.2 billion in outstanding Fed loans with a 0.3% interest rate and held $34.6 billion in U.S. government securities with an average yield of 2.1%.

• Q2 2009, JPMorgan Chase had an average of $7.6 billion in outstanding Fed loans with an interest rate of 0.25% interest. Meanwhile, it held $34.6 billion in U.S. government securities with an average yield of 2.3%.

• Q1 2008, Citigroup received over $5.2 billion in Fed loans with a 3.3% interest rate and held $7.9 billion in U.S. Treasury Securities with an average yield of 4.4%.

• Q4 2008, Citigroup received $15.8 billion in Fed loans through the Fed’s Primary Dealer Credit Facility with a 1.2% interest rate; $11.6 billion in Term Auction Facility loans with a 1.1% interest rate; and $4.9 billion in Commercial Paper Funding Facility loans with a 2.7% interest rate. It simultaneously held $24 billion in U.S. government securities with an average yield of 3.1%.

• Q1 2009, Citigroup received over $12.1 billion in Fed loans with an interest rate of 0.5% while holding $14.3 billion in U.S. government securities with an average yield of 3.9%.

• Q2 2009, Citigroup received over $23 billion in Fed loans with an interest rate of 0.5% while holding $24.3 billion in U.S. government securities with an average yield of 2.3%.

• Q3 2009, Bank of America had an average of $2.9 billion in outstanding Fed loans with an interest rate of 0.25% while purchasing $23.5 billion in Treasury Securities with an average yield of 3.2%.

Sources: Federal Reserve, US Senate

U.S. Homeownership Rate At 66.4% For Q1 2011

Courtesy of Calculated Risk, the homeownership rate in the U.S. decreased slightly in Q1 2011, dropping from 66.5% to 66.4%.  The homeowner vacancy rate decreased to 2.6% but is still above recent historical norms.

Extreme Skier Outjumps Avalanche

Amazing video footage of skier outjumping avalanche...

Avalon at Seven Meadows Signs New Contract With Arrow Community Management

The board of Avalon at Seven Meadows has signed a new contract with Arrow Community Management.  PMG's contract was terminated effective May 1st.

Update:  Arrow has apparently shut down.  While the Avalon board looks for a new management company. correspondence can be directed to KatyAvalon@gmail.com.

Economic Insights, Post S&P Downgrade

Several excellent reads this week...

From Jesse's Cafe Americain...

Modern Monetary Baloney, Fundamental Values, and the Unaddressed Requirment for Reform

"Although a fiat currency might give Americans the euphoric feeling of independent and limitless wealth on command, it just does not work that way. The US has been gifted a deep and resilient economy and culture, bought over many years by blood and sweat and sacrifice.

It will take a monumental effort to bring it down, but I think the crony capitalists and oligarchs are up for the job if the people allow it, through complicity and sheer mean-spirited foolishness, but most likely apathy.  The problem with this sort of large, complex system is that it collapses so slowly and in stages that the participants don't seem to notice it happening, until some weight reaches a critical point, and the bough breaks, and the heavy burdens of the past all come down in a rush that none can withstand, or probably even understand, until they are standing in ruins."

From William Black's New Economic Perspectives...

Speaker Wright and Secretary Geinther's Shared Hate for Prosecuting Criminal Contributors

"I set forth this history because of the disclosures in Gretchen Morgenson and Louise Story’s April 14 article in the New York Times “In Financial Crisis, No Prosecutions of Top Figures.”

Morgenson and Story’s reporting revealed that Timothy Geithner discouraged criminal investigations of suspected accounting control frauds. I was asked to comment on this “elite felons go free” policy by Kai Ryssdal, Marketplace’s business journalist.

Ryssdal: What about the argument, though, that the financial system is so fragile still, and these cases so complicated, that we can't really tear things apart with substantive investigations and prosecutions because it will all fall apart again?

Black: Yeah, that's an excellent point. We should leave felons in charge of our largest financial institutions as a means of achieving financial stability."

From Charles Hugh Smith's Of Two Minds...

The Fundamental Injustice That is Poisoning the Nation

"If a society cannot rouse itself to cleanse the fundamental injustice at the heart of its institutions, then it is effectively choosing self-destruction.

So far, the U.S. is pursuing the Roman Imperial model with an institutional zeal unmatched since Rome's fall.

Embedded institutional injustice has a price, a price which rises with every passing day of propaganda and prevarication. Some day the bill will come due and a terrible price paid in full. For those in power, the only concern is that it not be today or tomorrow."

 

 

Katy Texas & West Houston Real Estate Market - March 2011

Home sales were flat for the month of March in Katy's residential relocation market (area 36), while sales of starter homes north of I-10 dropped by some 21 percent.  Price per square foot was down just slightly in both areas compared to last year.  Sales of luxury homes saw good activity during the month, although buyers have shown some reluctance to buy into the highest price segments.

Meanwhile, leasing activity of single family residences in area 36 nearly doubled from March of last year.  The trend for increased rental activity looks to continue as mortgage markets remain challenging.  Owners of existing homes have also shown a preference to lease and sit the market out rather than sell at a reduced price.

The FED's new rules on loan officer compensation will likely deal another blow to an already struggling mortgage market and keep some of those would-be first time home buyers out of the market.  That could pose some challenges for sellers in the lower price ranges.  As one of my friends in the mortgage sector noted yesterday, he's already seen a jump in rates across the industry because of the new rules which went into effect this month.  Large banks, most of whom received a huge bailout, are now pocketing the yield spread premiums which many loan originators were previously able to pass on to customers as discounts.

Houston Area Single-Family Homes Update

March sales of single-family homes in Houston totaled 4,647, down 4.4 percent from March 2010. This follows a 2.5 percent decline in February and 8.2 percent jump in January, which was the first increase in seven months. When compared to March of 2009, a year in which there were no unusual real estate market influences such as Hurricane Ike in 2008 and the home buyer tax credit in 2010, single-family home sales were up 6.6 percent.

Broken out by segment, March sales of homes priced below $80,000 climbed 25.6 percent; sales of homes in the $80,000-$150,000 range dropped 11.5 percent; sales of homes between $150,000 and $250,000 declined 16.7 percent; sales of homes ranging from $250,000-$500,000 ticked up 3.1 percent; and sales of homes that make up the luxury market—priced from $500,000 and up—rose 7.6 percent.

CATEGORIES	MARCH 2010	MARCH 2011	PERCENT CHANGE
Total property sales	5,800	5,509	-5.0%
Total dollar volume	$1,164,162,238	$1,137,192,820	-2.3%
Total active listings	49,030	51,091	4.2%
Total pending sales	4,242	4,190	-1.2%
Single-family home sales	4,861	4,647	-4.4%
Single-family average sales price	$210,642	$217,597	3.3%
Single-family median sales price	$153,500	$150,900	-1.7%
Months inventory*	6.7	7.6	13.2%

* Months inventory estimates the number of months it will take to deplete current active inventory based on the prior 12 months sales activity. This figure is representative of the single-family homes market.